John Lothian Newsletter: Exchanges, Brokers Back Nickel-And-Dime Pricing in Some Stocks; UK official warns on Mifid over-reach; Denmark Reveals Mark-to-Market Trap Amid No-Return Risks

Jun 21, 2012

Some exchanges and brokers have suggested that setting more broad pricing for lower-liquidity stocks may improve trading conditions; no word on whether quarter- and eighth-dollar quotes would be included in that model. A UK Treasury official warns that upcoming trading regulations would create other, undesirable kinds of trade barriers between eurozone countries.  Denmark serves as an object lesson in how mark-to-market accounting fails to handle volatile circumstances.  In today’s First Read, John Lothian discusses yesterday’s trip to Washington for the CFTC’s regulatory session; and you’ll find two MarketsWiki.tv interviews: one with Phil Flynn of The Price Futures Group regarding the natural gas and carbon markets; and the other with James Gellert of Rapid Ratings International on issues regarding credit rating regulation.

First Read

TAC 2.0
Yesterday was my first meeting in Washington, DC as a member of the CFTC’s Technology Advisory Committee, or TAC 2.0 as it is called. The meeting featured reports from working committees on aspects of high frequency trading, or HFT, as well as presentations about SEFs. The first task from Working Group #1 was to define what HFT is.

The working or provisional definition of HFT from Working Group number #1 was:

High frequency trading is a form of automated trading that employs:

(a) algorithms for decision making, order initiation, generation, routing, or execution, for each individual transaction without human direction;

(b) low-latency technology that is designed to minimize response times, including proximity and co-location services;

(c)  high-speed connections to markets for order entry; and

(d) high message rate (orders, quotes or cancellations).

Other working groups had more granular assignments, some which depended somewhat on the definition of Working Group #1. Working Group #3, which featured representatives from the CME, ICE, NFA and others gave a report that says all the information the regulators need to analyze HFT and other forms of trading is already available.

One of the questions that was raised was what is the problem with HFT we are trying to solve. There is a belief in some corners that these efforts will lead to, at a minimum, some form of registration of participants using HFT, which from the broadness of the definition at this stage might be nearly all significant market players.

Let me just state my opinion that any player can be disruptive to the markets. Stuff happens and you can’t outlaw stuff happening. We have rocket scientists who do all kinds of tests on their rocket designs, but we still have had some stuff happen with rockets and shuttles. Anyone using a HFT strategy or with that capability can have stuff happen regardless of registration or testing.

Heck, NASDAQ OMX just proved this point from an exchange standpoint. They did all kinds of pre-IPO testing getting ready for the Facebook offering. But stuff still happens.

The second part of the meeting featured five presentations from organizations interested in the Swap Execution Facility, or SEFs, space. CME led off with a description of their SEF aggregation technology, CME Direct, which they want to license to firms registered as SEFs.

ICE gave a short presentation featuring their current technology and how it has SEF features built right in.  

UBS also presented their SEF liquidity aggregation strategy.  Bloomberg gave a very granular presentation on how their technology works. ICAP gave an interesting presentation on what they are and how they make their money. It was a long, but effective way of getting around to how they would fit in the SEF space.

While I know more about SEFs than I did before the presentations, I am not sure I am confident how all of this is going to work. We are just going to have to wait and see.

One issue I did bring up was the question of settlement prices for identical standardized OTC derivatives that are traded on different SEFs and cleared at different clearing houses. If you trade a swap and clear it at ICE and trade another and clear it at CME, you could have different settlement prices because of different models or price discovery dynamics at the different execution facilities. That means the pays and collects would not be the same for all.  

I am told this problem exists today, OK I can see that, but it is strange from a futures clearing model. Firms with offsetting positions at different clearing houses might have to pay more for a position at one than they would be collecting from another. It is just a little market inefficiency because of the structure.

I asked the CME representatives whether CME Direct had any intellectual property issues, either patents the CME might have applied for or conflicts with other patented technology. They said they were unaware of any. Having lived through the Wagner patent and the TT patent stories, and how similar some of the OTC trading screens looked, I had to ask the question.

Other things I learned on my trip to Washington:

  • It is good to wear a seersucker suit in Washington, DC on days when it is 101 degrees. (I did.)
  • It is hard to explain why you are wearing a seersucker suit and sporting a summer beard (my Ethiopian cab driver was baffled).

~John J. Lothian

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Cricket and Futures For Kids

Ffastfill is hosting a charity cricket match next Wednesday for Futures For Kids, featuring two teams made up of industry professionals – the English versus the Barbarians. Each team is trying to raise some pounds to support the cause. Barbarians, which is anyone who isn’t English I presume, have raised £1,775 and the English have raised £2,320 so far. JLN’s Jim Kharouf and Patrick Lothian will be playing for the Barbarians and taking their first swings of the bat and trying to look good in all white. To support the game and Futures For Kids, please make a donation here.
Thank you.
Jim Kharouf

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A Bump at Speed Trading Hearing
BY SCOTT PATTERSON, JACOB BUNGE AND JENNY STRASBURG – WSJ
Conflict erupted among some of Wall Street’s heaviest hitters over a proposed definition of high-frequency trading, showing rifts that divide big investment firms from the high-octane companies that specialize in the electronic trading. The dispute, at a government-sponsored hearing Wednesday, underlines the bitter debate over the role played by high-frequency trading in modern-day markets. It also shows the challenges regulators face in trying to police a rapidly evolving securities industry.
http://jlne.ws/L7svkH

**JK – Let’s slow down and think rationally.

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NYSE CEO: Public Has Lost Trust in Market Functions
By Jacob Bunge – Dow Jones
The top executive of the New York Stock Exchange told lawmakers Wednesday that investors have lost faith in a financial marketplace that has evolved to prize speed and complexity over long-term investing.
http://jlne.ws/L7svkL

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CME resumes charity grants halted after MF Global failure
Reuters via Yahoo! News
CME Group Inc, the biggest operator of U.S. futures exchanges, has resumed making grants from its main charitable foundation after a seven-month halt triggered by the failure of giant futures brokerage MF Global Holdings Inc.
http://jlne.ws/L7sxJm

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Exchanges must adapt to the times
By Peter Randall – Financial Times
Let us apply the wisdom of Woody Allen to the European exchange industry as its leaders meet in Istanbul for the annual Federation of European Securities Exchanges meeting. “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly.”
http://jlne.ws/L7svkS

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DARK POOLS: Despite The Scary Title, This Is A Good History Of High Speed Trading
Eric Falkenstein – Business Insider
Scott Patterson’s new book Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System suggests a Rolling Stone type expose of vampire squids sucking the vital fluids out of widows and orphans. In contrast, most of the book was about the development of electronic exchanges from 1990 through 2007, especially focused on the firms Archapelego and Island.
http://jlne.ws/L7svkT

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Electronic Trading Offerings Must Evolve To Survive, Reveals Greyspark’s Annual E-Commerce Report
A new report from GreySpark Partners, the capital markets consultancy, has revealed how the electronic trading space has developed, and how it will continue to develop, in the future. Over 90 different firms participated in the annual survey, which benchmarks the progress of market electronification and highlights the growing importance of electronic trading on the new state of the financial markets.
http://jlne.ws/L7sxJu

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Dubai Mercantile Exchange Appoints CEO
DME the Middle East’s leading energy futures exchange and home to the emerging benchmark for crude oil pricing for the East of Suez markets, has today announced the appointment of former BNP Paribas Head of Marketing for Commodity Futures APAC, Christopher Fix, as Chief Executive Officer.
http://jlne.ws/L7svBg

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The Stupidity of the Robin Hood Tax Reaches America
Tim Worstall – Forbes
I was astonished to see that the Robin Hood Tax is now launching a campaign in the United States. We’ve been discussing this in the UK for several years now and I thought everyone was aware that the tax does absolutely none of the things claimed for it. And does many other undesirable things as well.
http://jlne.ws/L7sxZN

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Markets Live: Thumbs down for the Twist
Sydney Morning Herald
Australian shares fell sharply today as global investors were disappointed by the size of the US Federal Reserve’s next round of stimulus – ‘Operation Twist’ – and worried about economic data from China.
http://jlne.ws/L7svRC

“Operation Twist”?! It is imperative for the U.S. Fed to understand that their economy may not be Hollywood blockbuster. Don’t they ever get tired of coming up with all these silly names.  Well, there’s a story behind it which dates back to the early 1960s. This explanation comes courtesy of MarketsWiki:

MarketsWiki.tv

Phil Flynn of The Price Futures Group Discusses the Outlook for Natural Gas & Carbon Markets
MarketsWiki.tv
Phil Flynn has followed the energy markets for more than two decades and recently joined The Price Futures Group as a senior market analyst. He spoke with JLN Environmental/Energy editor Jim Kharouf about the outlook for natural gas, shale gas and Canada’s oil sands. Flynn also gave his thoughts on the future of the carbon market and the US energy mix.
http://jlne.ws/LCfDZF

James Gellert of Rapid Ratings International Discusses MF Global & Credit Ratings Regulation
MarketsWiki.tv
James Gellert is Chairman and CEO of Rapid Ratings International, a financial services company that uses a proprietary quantitative system to rate the financial health of corporations and financial institutions. The company’s user-based compensation model offers an alternative to the “company pays” model used by NRSROs such as Standard & Poor’s, Moody’s and Fitch. Gellert spoke with John Lothian News Editor-at-Large Doug Ashburn about Rapid Ratings’ “user-pays” model, its early warning on MF Global, and credit ratings regulation under Dodd-Frank.
http://jlne.ws/KlhjB8

JLN Options

A Wager on Market Optimism
Options traders are betting that stocks will rally and the market’s fear gauge will continue falling in the wake of Federal Reserve action.
Steven M. Sears, Barron’s
Traders are using options to bet the market’s fears will continue to subside in the wake of an expected Federal Reserve move designed to stimulate the weakened U.S. economy.
Investors are preparing for the Chicago Board Options Exchange’s Volatility Index, or VIX, to extend a 26% decline since last Wednesday that has pushed the fear gauge into levels associated with extreme bullish optimism about stock prices.
http://jlne.ws/MM6E2X

Tracking the Fall in VIX Futures (VXZ, TVIX, VXX)
Bill Luby, ETF Daily News
The last four days have seen a dramatic decline in all things related to the VIX. The cash/spot VIX is down 26% from last Wednesday’s close as I write this and the VIX futures have followed the VIX down to varying degrees. The graphic below shows the changes in all the VIX contracts during the last four days – a period during which the entire VIX futures term structure has fallen sharply.
http://jlne.ws/PubqGa

ETFs May Soon Track Interest-Rate Volatility Index
Tom Lydon, ETF Trends
The Chicago Board Options Exchange is set to launch an interest rate-based volatility index. The so-called SRVX Index is intended to give investors a transparent measure of interest rate swap volatility. Investors can expect focused exchange traded funds to launch that will track this.
http://jlne.ws/KxLUQR

MarketsWiki

MarketsWiki Page of the Day
Paul O’Donnell
http://jlne.ws/KzfvcL

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MarketsWiki Recent Updates

People

Steve Kosanovich; James H. Gellert; Paul O’Donnell; Thomas J. Cashman; Phil Flynn

Companies, Organizations and Groups

Chicago Mercantile Exchange; Kansas City Board of Trade; Rapid Ratings International; Fitch

Products

KCBT Hard Red Winter Wheat futures; MGEX-CBOT Wheat Spread Options

Miscellaneous

2008 financial crisis; Credit Rating Agency; Nationally Recognized Statistical Rating Organization

Statistics

25,147,645 pages viewed, 6,907 articles, 143,237 edits
MarketsWiki Statistics

Lead Stories

Exchanges, Brokers Back Nickel-And-Dime Pricing in Some Stocks
By Jacob Bunge – Dow Jones
Smaller and lesser-known companies could benefit from being nickel-and-dimed, at least on stock markets. Allowing thinly traded stocks to rise or fall in broader increments–five or ten cents versus the current penny, for instance–could help those securities draw more investors and make their shares easier to trade, according to exchange and brokerage executives.
http://jlne.ws/L7sxZS

UK official warns on Mifid over-reach
By Philip Stafford in Istanbul – Financial Times
A key UK government official will warn that proposals for incoming new regulation of European markets risk shutting off the region’s businesses from the world’s fastest-growing economies.
http://jlne.ws/L7sxZY

Denmark Reveals Mark-to-Market Trap Amid No-Return Risks
Bloomberg
As the European Union tells its life insurers to adopt mark-to-market rules starting in 2014, it should look north to see how the model can backfire. A decade after Denmark’s pension funds and life insurers became Europe’s first to use daily market values for matching assets and liabilities, the country is diluting the model. The government now says mark-to-market needs adjustments to work in times of volatility.
http://jlne.ws/L7sy02

Nasdaq OMX Postpones Date of Facebook Trade Loss Submissions
By Jacob Bunge – Dow Jones
Nasdaq OMX Group Inc. (NDAQ) has pushed back the date by which brokers and traders that lost money in the stock-market debut of Facebook Inc. (FB) must submit requests for the exchange group to make up some losses.
http://jlne.ws/L7sy03

Regulators Back Off Tougher Curbs on Oil
BY CAROLYN CUI – WSJ
Europe and Syria took center stage at the Group of 20 meeting in Los Cabos, Mexico, this week. But in the oil industry, all eyes were on a report that signaled regulators are backing away from efforts to ratchet up scrutiny of the $2 trillion-a-year market.
http://jlne.ws/L7sygi

Federal Reserve sees lower economic growth, higher unemployment and lower inflation for 2012
AP
The Federal Reserve has sharply lowered its outlook for U.S. economic growth and thinks the unemployment rate won’t fall much further this year.
http://jlne.ws/L7svRR

Spain full-blown bailout ‘all but inevitable’
AFP via Yahoo! News
A full-blown bailout for Spain is all but inevitable as it has lost control of its debt crisis, analysts say, despite Madrid’s insistence that it does not need rescuing.
http://jlne.ws/L7sygy

Bailout fund should buy euro debt
By Michael Steen and Ralph Atkins in Frankfurt – Financial Times
A top European Central Bank policy maker has publicly backed the rapid use of the eurozone’s bailout fund to buy distressed sovereign bonds on the open market, saying such action could ease the “very severe strain” being felt by Spain and Italy.
http://jlne.ws/L7sygz

Transcript: FT interview with Benoît Cœuré
By Ralph Atkins and Michael Steen in Frankfurt – Financial Times
Financial Times interview with Benoît Cœuré, European Central Bank executive board member. Ralph Atkins and Michael Steen spoke with Mr Cœuré on Wednesday June 20, 2012, in Frankfurt
http://jlne.ws/L7sywM

Regulatory

SEC Builds Money Fund Case
BY ANDREW ACKERMAN AND KIRSTEN GRIND – WSJ
Money market mutual funds have been rescued from financial trouble by their parent companies more than 300 times since the 1970s, about 100 more than previously reported, according to a new Securities and Exchange Commission study. The study, which isn’t being released to the public, appears to bolster SEC Chairman Mary Schapiro’s contention that the $2.6 trillion industry needs stronger regulation.
http://jlne.ws/L7sywP

SEC Adopts Rule Requiring Listing Standards for Compensation Committees and Compensation Advisers
The Securities and Exchange Commission has approved a rule that directs national securities exchanges to adopt listing standards for public company boards of directors and compensation advisers.
http://jlne.ws/L7sywV

SEC rejects Huntington’s request to convert fund to ETF
Reuters via Yahoo! Finance
Mutual fund companies and financial advisers that had hopes of converting their funds into actively managed exchange-traded funds have had their hopes dashed. After two years of review, the U.S. Securities and Exchange Commission has denied a request by Huntington Asset Advisors, the asset management arm of Huntington Bancshares Inc, to fold an existing mutual fund into a new actively managed ETF.
http://jlne.ws/L7sywW

Concern over US exchange self regulation
By Arash Massoudi in New York – Financial Times
Credit Suisse has called on US legislators to strip stock exchanges of their self-regulatory status and make them accountable to legal action for errors, such as the glitch-ridden Facebook public offering, taking place on their systems. The bank took its stance as executives from top exchanges and market-making firms testified on market structure issues in front of select members of the US House of Representatives on Wednesday.
http://jlne.ws/L7sw8i

SEC Chief Accountant James Kroeker To Leave The Commission
The Securities and Exchange Commission today announced that Chief Accountant James L. Kroeker will leave the SEC in July to enter the private sector.
http://jlne.ws/L7sw8q

Statement Before The Technology Advisory Committee Meeting 2.0 – CFTC Chairman Gary Gensler
http://jlne.ws/L7syNl

CFTC Technology Advisory Committee: Opening Statement By Commissioner Scott D. O’Malia Before The Technology Advisory Committee Meeting 2.0, Washington, DC
http://jlne.ws/L7syNo

“What A Concept” – Opening Statement Of CFTC Commissioner Bart Chilton Before The CFTC Technology Advisory Committee Meeting
http://jlne.ws/L7syNp

Statement Of Market Structure Principles – Prepared Remarks Of Direct Edge CEO William O’Brien To Be Delivered June 20, 2012 Before The Committee Of Financial Services Subcommittee On Capital Markets And Government Sponsored Enterprises, United States House Od Representatives At A Hearing Titled
http://jlne.ws/L7syNt

ESMA Launches A Consultation On Possible Delegated Acts Concerning The Prospectus Directive
http://jlne.ws/L7swoN

Canadian Securities Regulators seek comments on OTC central counterparty derivatives clearing framework
http://jlne.ws/L7syNA

AMF launches a consultation on the transposition of the AIFM Directive
http://jlne.ws/L7swoS

Exchanges & Trading Facilities

CME confirms it will launch steel scrap contract
Reuters
The CME Group said it plans to launch a U.S. steel scrap contract to expand its offering of ferrous derivatives contracts, as the Chicago exchange aims to cash in on growing interest in price risk management in the sector.
http://jlne.ws/L7sz3S

London Commodity Brokers To Launch S Africa Commodity Auction Exchange
Dow Jones
U.K.-based brokerage house London Commodity Brokers said Wednesday it’s planning to launch in two weeks’ time an online auction exchange platform to buy and sell strategic South African commodities on a spot basis.
http://jlne.ws/L7sz3T

ICE Loses Bid: A Boon for Investors?
Zacks via Yahoo! Finance
IntercontinentalExchange loses the bid to Hong Kong Exchanges over the buyout of LME. Deal sealed for $2.16 billion.
http://jlne.ws/L7swFe

New issuer uses SIX’s COSI collateralization
SIX Swiss Exchange and Scoach Switzerland welcome Bank Sarasin as the sixth issuer in the Collateral Secured Instruments segment.
http://jlne.ws/L7sz3W

ICE Futures U.S. New Margin Requirements
http://jlne.ws/L7swFh

Top 20 Largest Consolidated Short Position Report – June 15, 2012
http://jlne.ws/L7swFl

CNSX Markets Bulletin 2012-0604 – Canada Day Schedule
http://jlne.ws/L7sz44

Cyprus Stock Exchange Monthly Bulletin – May 2012
http://jlne.ws/L7swFp

Hedge Funds & Managed Futures

Lonely Hedge Fund Bullish on Greece Tries to Woo Investors
Bloomberg
As the founder of a hedge fund that plans to buy nothing but Greek stocks, George Elliott is used to being treated as a curiosity.
http://jlne.ws/L7swFs

Hedge Funds Hurt in May Commodity Rout as Brevan Drops
Bloomberg
For the third straight year, May proved a disaster for hedge funds that specialize in commodities as raw materials from copper to oil fell into bear markets.
http://jlne.ws/L7swVI

BlueMountain Said to Help Unwind JPMorgan’s London Whale Trades
Bloomberg
A hedge fund run by a former JPMorgan Chase & Co. executive who helped create the credit- derivatives market is aiding the lender as it unwinds trades in an index at the heart of a loss of more than $2 billion.
http://jlne.ws/L7swVJ

BlackRock Founding Partner Susan L. Wagner to Retire as Vice Chairman of Firm and Join Board of Directors
Business Wire via Yahoo! Finance
BlackRock, Inc. today announced that Susan L. Wagner, a Founding Partner of BlackRock, is retiring as a Vice Chairman of BlackRock and has been elected to BlackRock’s Board of Directors.
http://jlne.ws/L7swVM

Catalyst Launches First Legal Insider Trading Mutual Fund
Marketwire via Yahoo! Finance
Catalyst Funds announces the launch of the first legal insider trading mutual fund. The Catalyst Insider Long/Short Fund seeks to take advantage of legal insider trading by purchasing stocks experiencing significant insider buying and selling short those that are subject to large clusters of insider selling.
http://jlne.ws/L7szkr

[Video] Julian Robertson on Hedge Fund Investment Strategy
Bloomberg
Julian Robertson, founder of Tiger Management LLC, talks about investment strategy, the hedge-fund industry and the European debt crisis. Robertson speaks with Tom Keene, Scarlet Fu and Sara Eisen on Bloomberg Television’s “Surveillance.”
http://jlne.ws/L7szkv

MSCI Seen Overlooking Taiwan With U.A.E. Staying Frontier
Bloomberg
Greece’s stock market was put under review for reclassification to emerging markets by MSCI Inc. after the country carried out the world’s largest sovereign debt restructuring.
http://jlne.ws/L7szkw

MSCI Announces The Results Of The 2012 Annual Market Classification Review
http://jlne.ws/L7swVU

Federal Reserve Board And Federal Open Market Committee Release Economic Projections From The June 19-20 Federal Open Market Committee Meeting
http://jlne.ws/L7szkz

Banks & Brokers

Trading Surge in Index Behind JPMorgan Loss Signaling Unwind
Bloomberg
Trading in the credit derivatives index that contributed to JPMorgan Chase & Co. (JPM)’s losses in its London chief investment office soared to a record yesterday in a sign that the biggest U.S. bank may be unwinding its position, according to data cited by Credit Suisse Group AG.
http://jlne.ws/L7szkC

JPMorgan Poised to Make 157% on MF Global’s LME Shares
By Agnieszka Troszkiewicz – Bloomberg
JPMorgan Chase & Co. (JPM) (JPM), the largest U.S. bank, is poised to more than double the value of its investment in London Metal Exchange shares bought seven months ago from the U.K. unit of bankrupt MF Global Holdings Ltd.
http://jlne.ws/L7szAU

Deutsche Bank, Guggenheim Partners End Talks on RREEF Sale
Dow Jones
Deutsche Bank AG and Guggenheim Partners Wednesday called a halt to exclusive negotiations over the sale of the bank’s global alternative asset management business RREEF, as they couldn’t agree on terms for the sale, the German lender said.
http://jlne.ws/L7szAZ

Wells Fargo May Send Some Jobs to India, Philippines
Bloomberg
Wells Fargo & Co. (WFC), the lender looking to trim more than $1.7 billion in quarterly expenses between the first quarter and the end of this year, may move some jobs overseas.
http://jlne.ws/L7szB6

Cohn Says ‘Of Course’ He Would Like to Be CEO of Goldman Sachs
Bloomberg
Goldman Sachs Group Inc. President and Chief Operating Officer Gary Cohn said he would like to be chief executive officer of the firm and he is “very happy” in his current job.
http://jlne.ws/L7sxcp

Bank Of America Races To Sell Assets (Again) – A List Of Assets Sold Since 2011
International Business Times
Bank of America Corp., the lender divesting assets to raise capital, is in talks with Swiss wealth manager Julius Baer Group Ltd. to sell its Merrill Lynch wealth management business outside the U.S.
http://jlne.ws/L7sA7S

Libya eyes refund of Goldman, SocGen losses
Reuters via Yahoo! News
The Libyan sovereign wealth fund is investigating investment losses of $1.75 billion on structured products managed by Goldman Sachs and Societe Generale to see whether it can claim compensation, the fund’s chairman said on Wednesday.
http://jlne.ws/L7szRr

Bosses Rein In Banker Who Golfs With Obama
By SUSANNE CRAIG – NY Times
One of the biggest banks in the world wants the president’s favorite banker muzzled.
http://jlne.ws/L7szRw

Edward Jones vision of 20,000 brokers a tall order
Reuters via Yahoo! Finance
Edward Jones, financial advisers to middle class America, plans to hire about 8,000 brokers and nearly double its client assets over the next eight years, an expansion that will test its ability to grow profitably with mostly home-grown talent.
http://jlne.ws/L7sA83

HSBC Names Thomas Crystal Head of U.S. High-Yield Sales
By Katy Burne – Dow Jones
HSBC Securities (USA) has appointed Thomas Crystal to be its U.S. head of high-yield credit sales, a newly created role. He started this week in New York and reports to Cary Goodwin, head of U.S. credit sales.
http://jlne.ws/L7sAop

Sumitomo Mitsui Said to Fire Banker Amid Insider Trading Probe
Bloomberg
Sumitomo Mitsui Financial Group Inc. ’s lending unit fired a senior banker amid a government investigation into insider trading, two people with knowledge of the matter said.
http://jlne.ws/L7sAoA

Schwab Retirement Plan Services Earns Top Marks for Client Loyalty and Satisfaction in Independent Survey
Business Wire via Yahoo! Finance
Schwab Retirement Plan Services has been named the top 401 provider in the categories of loyalty and overall satisfaction in a survey by Boston Research Group, affirming its sta
http://jlne.ws/L7sCNb

Volcker’s Fed Would Not Ease
Wall Street Journal Blogs
A tougher Fed Chairman would back up his call for Congress to act, rather than acquiesce to the market calls for another stimulus program.
http://jlne.ws/L7sCNi

Veterans Internship Program Helps Transition From Military to Finance
June 1 marked the conclusion of Goldman Sachs’ inaugural eight-week Veterans Internship Program, which gives veterans skills and preparation for future careers in finance.
http://jlne.ws/L7sD3A

Clearing & Settlement

Hong Kong Monetary Authority, Euroclear Bank And J.P. Morgan Open Cross-Border Liquidity And Secured Lending Channels In Hong Kong
The Hong Kong Monetary Authority today signed bilateral agreements with Euroclear Bank and J.P. Morgan Worldwide Securities Services, respectively, to cooperate in delivering an innovative cross-border collateral management service on 25 June 2012.
http://jlne.ws/L7sD3E

LCH Increases Margin Charges on Some Italian Government Bonds
Bloomberg
LCH Clearnet Ltd., Europe’s biggest clearing house, raised the extra deposit it demands from clients to trade some Italian government bonds.
http://jlne.ws/L7sAF7

Indexes & Products

Brett Hammond Joins MSCI As Head Of Index Applied Research
http://jlne.ws/L7sAVs

Van Eck Acquires An Aussie ETF Foothold
IndexUniverse.com via Yahoo! Finance
Van Eck, the investment firm behind Market Vectors family of ETFs, is buying its way into Australia by acquiring Australian Index Investments in what amounts to a bet that the land down under will soon become one of the world’s most vibrant ETF markets.
http://jlne.ws/L7sD3M

S&P Indices Announces Changes In The S&P/TSX Canadian Indices – A Deletion From The S&P/TSX Venture Composite, Venture 30 And Venture Select Indices
http://jlne.ws/L7sD3N

Technology

Orc News, June 2012
This quarter we shine the spotlight on new features Orc has introduced including the Quote Notification Window and the Gateway Development Kit. We also have exciting news about connectivity to exchanges in India along with our regular highlights of new and expanded business featuring the Korean Investment & Securities Co. Ltd., MXF Trading and Newside.
http://jlne.ws/L7sDk4

Numerix Partner Program Welcomes Financial Software Provider Dion Global Solutions
Numerix (www.numerix.com), the leading provider of cross-asset analytics for derivatives valuations and risk management today announced that Dion Global Solutions has joined the Numerix Partner Program to offer Numerix Powered Analytics within its valuation and risk management solutions.
http://jlne.ws/L7sAVB

KVH Appoints Veteran International Sales Executive Christopher Young – Accelerating Asia-Pacific Expansion To Address Diversified IT Services Needs
http://jlne.ws/L7sDk6

NASDAQ Basic Powers Real-Time U.S. Market Data For Canadian Investors
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced that Questrade Inc., a leading online brokerage firm in Canada, has selected NASDAQ Basic to power its new online trading applications IQ Web and IQ Edge.
http://jlne.ws/L7sBbZ

Nanhua Futures Selects Progress Apama to Strengthen Algorithmic Trading Capabilities
Business Wire via Yahoo! Finance
Progress Software Corporation, has announced that Chinese futures brokers, Nanhua Futures has selected the Progress Apama Algorithmic Trading Platform as part of its plans to drive more overseas business.
http://jlne.ws/L7sDkf

Enforcement

[FSA] Three sentenced for insider dealing
James Sanders, a director of Blue Index, a specialist Contract for Difference (CFD) brokerage, his wife Miranda Sanders and James Swallow, a co-director of Blue Index, have today been sentenced for insider dealing contrary to section 52 of the Criminal Justice Act 1993.
http://jlne.ws/L7sDkh

Four banks win case against SFO
By Daniel Schäfer in London – Financial Times
Four international lenders have won a London court case that will block the Serious Fraud Office from seizing documents for a criminal trial in Italy over derivatives sold to the municipality of Milan. A judge at London’s High Court of Justice ruled on Wednesday that the SFO had an “obvious lack of authority” to obtain documents from JPMorgan Chase, Deutsche Bank, UBS and Depfa Bank.
http://jlne.ws/L7sBc2

DealBook: Top Courts in U.S. and Britain Enter the Madoff Fray
New York Times
As Bernard L. Madoff serves a 150-year sentence for his Ponzi scheme, top courts in the United States and Britain are tackling issues that could have a multibillion-dollar impact on his victims.
http://jlne.ws/L7sDki

NFA Enforcement and Registration Actions
Covenant Trading LLC and Larry G. Young
http://jlne.ws/L7sDkj

B.C. Securities Commission Criminal Investigations Team and Abbotsford Police arrest Abbotsford man for illegal sale of securities
http://jlne.ws/L7sDkn

Environmental & Energy

Cap-and-trade plan upheld by Calif. court
San Francisco Chronicle
A state appeals court on Tuesday upheld California’s plan to combat global warming with a market-based cap-and-trade system to limit emissions of greenhouse gases, rejecting some environmental groups’ arguments that the rules are too weak and could worsen certain types of air pollution.
http://jlne.ws/LCGAJH

EU works toward common energy market
UPI
European lawmakers backed legislation that would promote transparency among member states in the energy sector as part of a coordinated market.
http://jlne.ws/NR9Wau

Rio+20 earth summit should look to reduce black carbon through carbon trading
The Christian Science Monitor
Delegates at the Rio+20 earth summit must look beyond CO2 to black carbon. Reducing black carbon (soot) is easier than reducing other kinds of greenhouse gas emissions. And a market-based international system to reduce carbon emissions is already in place.
http://jlne.ws/Mtxpwr

Asia-Pacific

Forget Grexit, it’s time to fret about ‘Chindown’
By David Pilling – Financial Times
There has been much discussion about the potential impact on the global economy of a Greek exit from the eurozone. Less debated is what effect a softening of Chinese demand, particularly for raw materials, could have on parts of the global economy.
http://jlne.ws/L7sDAB

[OSE] Establishment of New Management Team
http://jlne.ws/L7sBsw

[OSE] Notice on Resolutions at the 11th Ordinary General Meeting of Shareholders
http://jlne.ws/iIaFAU

Hong Kong’s Securities & Futures Commission: Hontex Ordered To Make $1.03 Billion Buy-Back Offer Over Untrue IPO Prospectus
http://jlne.ws/L7sDAJ

SGX Forum Reply to ST – SGX Rules Remain of High Standards
http://jlne.ws/L7sBsH

SGX Forum Reply to ST – Compliance with Listing Requirements
http://jlne.ws/L7sDAQ

Dalian Commodity Exchange Adjusted The Soybeans, Corns And Soybean Oil Delivery Warehouse – Enhance The Delivery Service And Facilitate The Involvement Of Industrial Customers
http://jlne.ws/L7sDR6

Frontier Markets

Dubai Mercantile Exchange Appoints CEO
Dubai, June 21, 2012 –  DME (Dubai Mercantile Exchange) the Middle East’s leading energy futures exchange and home to the emerging benchmark for crude oil pricing for the East of Suez markets, has today announced the appointment of former BNP Paribas Head of Marketing for Commodity Futures APAC, Christopher Fix, as Chief Executive Officer.

Indonesia’s Economy Is Surging Forward, but Challenges Abound
Knowledge at Wharton
With GDP growth of more than 6% expected this year, Indonesia’s economy is stronger than it has been in years. The country is soon expected to join the club of nations with an annual GDP of more than $1 trillion, and foreign direct investment is at a record high.
http://jlne.ws/L7sDRh

Dubai Financial Market Announces The Results Of Its Board Of Directors Meeting Held On 20 June 2012
http://jlne.ws/L7sBJ3

DFSA Introduces New Markets Law and Amendments to the Regulatory Law
http://jlne.ws/L7sBJ4

Leading UAE Bank Mashreq Partners With Prolexic To Implement DDoS Protection Services
Prolexic, the global leader in Distributed Denial of Service (DDoS) protection services, today announced that Mashreq, one of the leading financial institutions in the United Arab Emirates (UAE), will be supported by Prolexic’s DDoS detection and DDoS protection services in the event that attacks are directed against its web site.
http://jlne.ws/L7sE7D

Abu Dhabi Securities Exchange Welcomes Korean Financial Delegation
Abu Dhabi Securities Exchange (ADX) received a financial delegation from the Korea Center for International Finance (KCIF). The visit aims to discuss means of developing relations of co-operation and partnership as well as increasing the exchange of expertise in the fields of mutual interest.
http://jlne.ws/L7sE7E

Kuwait’s Boubyan says $2.1 billion NBK offer “fair”; names advisor
Reuters
The board of Kuwait’s Boubyan Bank said a $2.1 billion offer by its main shareholder National Bank of Kuwait to take full control of the Islamic lender is “fair and suitable”, adding it hired an advisor to study the proposal.
http://jlne.ws/L7sE7H

Miscellaneous

LinkedIn sued for $5 million over data breach
By Basil Katz – Reuters
An Illinois woman has filed a $5 million lawsuit against LinkedIn Corp, saying the social network violated promises to consumers by not having better security in place when more than 6 million customer passwords were stolen.
http://jlne.ws/L7sBZw

Asia, not North America, now has most millionaires
Reuters via Yahoo! News
Weakening economies that roiled markets last year also took their toll on the world’s rich, though faster-growing Asia for the first time had more millionaires than North America, according to a study released on Tuesday.
http://jlne.ws/L7sE7P

The 25 Most Dangerous People in Financial Media
Joshua Brown – Huffington Post
Dangerous in a good way — these are the financial media players who are making things very difficult for the establishment to maintain the status quo. Because we tried it their way, allowing the banks and other corporations to write the laws and make all of our decisions for us. Turns out, that’s not true democracy or capitalism, it’s something else entirely, and we’ve all had enough. These are the folks leading the charge to take it back.
http://jlne.ws/L7sE7U

Confessions of a Former TV News Reporter
Cara Jones – Huffington PostIt wasn’t just the image focus that wore on me, I was tired of amplifying these tragic stories. I wanted, instead, to promote inspiring ones. My agent told me that job didn’t exist. So I quit.
http://jlne.ws/MGXQ1A

 

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