EU regulators evaluating the proposed ICE-NYSE merger are looking at competetive risks in the soft commodity sector. US regulators continue to edge toward rules designed to mitigate the future potential for financial crises, but that progress also continues to increase tensions between the US and Europe. NYSE Liffe sets July 1 as the conversion date for beginning to clear derivatives trading through ICE Clear Europe.
Why I Took the Guest Editor Role This Week
Jessica Titlebaum – Orc Group
There is a sitcom on CBS called 2 Broke Girls. One of the leading characters on the show is a diner chef named Oleg, played by Jonathan Kite. Jonathan is from Skokie, Illinois and graduated from my high school. He was a senior when I was a freshman.
A few nights ago Jonathan performed at Zanies Comedy Club in Old Town. A group of us went to see his show. It was like a high school reunion but better, because people actually wanted to be there. Jonathan and I have a mutual writer friend, Scott Kanter, who I saw for the first time in over 10 years. Scott asked me if I was still writing fiction and I shrugged embarrassingly, no. Scott must have graciously edited a book I was writing, called Postcards, numerous times when we were younger.
I am writing about derivatives now, I told him. His face made the familiar “huh” look that I usually get when I tell someone what I do, especially someone that knew me when I was a creative writing major living in Thailand. Explaining that I write and work in the capital markets is as unexpected a curve ball as the questions John Lothian throws when he is moderating a panel.
I went on to explain to Scott what a derivatives contract is and about exchanges. We talked about money makers and market-takers and the drivers of change that I feel privileged to interview. I told him about electronic trading, algorithms, flash crashes and how the New York Stock Exchange was bought by an exchange called ICE, yes like the cube.
While Scott was intrigued by our industry, our conversation ended with him telling me I still needed to write more. And I agreed with him, which is why I took John up on his offer to be guest editor this week. This will force me to put pen to paper.
And so it has. This week I will bring you news you should know about, events you should make appearances at and people you should be introduced to. Finally, I will also include the occasional, shameless plug for something I think is really cool. Today’s is 2 Broke Girls.
Stock Exchange Seeks to Bring Back Speed Bumps
JACOB BUNGE AND CHRIS DIETERICH – WSJ.com
The New York Stock Exchange wants to bring back some of the speed bumps it uses to curtail stock-price swings after several securities went for wild rides in recent weeks. NYSE Euronext on Friday sought U.S. regulators’ permission to reinstate the Big Board operator’s traditional method of slowing trade in rapidly moving stocks.
***JT – Buckle up!
NYSE Meet Gives Pause to Reflect on Past Overtures
Jacob Bunge – MoneyBeat – WSJ
When NYSE Euronext shareholders gather this morning in New York to vote on a takeover offer from IntercontinentalExchange Inc., they might raise a glass of something refreshing to the bureaucrats in Brussels.
OCC Wins Gold for Best Annual Report at The PCC Golden Trumpet Awards
OCC announced today that its 2011 annual report won gold in the Best Annual Report category at the 2013 Golden Trumpet Awards presented by the Publicity Club of Chicago at a dinner honoring the award winners on May 30, 2013.
***JT – I won gold once. I was in London for IDX 2009 with Berenice Corral. We were running late to the Futures For Kids Charity dinner and I missed the raffle drawing where it was announced that I won the ounce of gold. Florencia Panizza ran up on stage pretending to be me so I wouldn’t lose out on the prize.
GFI Group Hires James Toffey as Global Electronic Markets Head
Matthew Leising – Bloomberg
James Toffey, the former chief executive officer of bond- and derivatives-pricing service Benchmark Solutions Inc., has joined GFI Group Inc. (GFIG) as global head of electronic markets, the company said today in an e-mailed statement.
Eris Exchange Modifies Contract Size to Broaden Asset Manager Accessibility
Eris Exchange, a US-based futures exchange offering swap futures as a capital-efficient alternative to traditional OTC interest rate swaps, today announced a conversion to a $100,000 notional size contract from the previous $1,000,000 notional size. Eris Exchange implemented this design modification in response to significant end user demand for increased granularity in trade allocations in advance of the June 10 Category 2 swap clearing mandate.
ICAP’s Mandelzis, Coyne and Malone-Rouse inducted into Profit & Loss Hall of Fame
ICAP plc, a leading markets operator and provider of post trade risk mitigation and information services, announces today that Gil Mandelzis, Andy Coyne, and Fulinda Malone-Rouse have all been inducted into the Profit & Loss Hall of Fame. EBS also received the “Best FX Matching Platform” and “Best Platform for Banks” Awards and Traiana got the “Digital Markets Innovator” Award. The honorees were inducted at the Profit & Loss Readers’ Choice Awards event last night in New York City.
Financial system ‘waiting for next crisis’
David Oakley, Investment Correspondent – FT.com
John Kay, the economist and author, will warn this week that the world is heading for another financial crisis because the economic system is geared around trading profits that create market bubbles that inevitably burst.
Sales and trading: the five stages of grief
Ben Wright – Financial News
There was a time when equities traders considered it bad luck to even set foot on their bank’s fixed-income trading floor. But times have changed. Now Nomura is set to become the first large investment bank to house its two disparate tribes in the same room – eyeing each other suspiciously over their Bloomberg screens.
Twitter’s regulatory problems flagged by compliance officers
Vanessa Kortekaas – FT.com
Compliance officers are quick to point out the regulatory problems that Twitter poses. Its speed makes it difficult to monitor, analysts have to be wary of misleading investors and, as one senior manager at a City of London firm puts it: “We’ve got to make sure that it’s not just the janitor that is tweeting.” But the growing influence of Twitter on both investors and on analysts’ research is difficult to ignore.
***JT – John J. Lothian & Company addressed the regulatory issues around Twitter back in 2009. We videotaped the panel discussio
n and if you are interested, John might have an archived copy. It will bring back memories of the good ole days when Allan Schoenberg was still living in Chicago.
2013 CBOE Risk Management Conference Europe: CBOE to Host Second Annual CBOE RMC Europe September 30 – October 2, 2013 in Portugal
The Chicago Board Options Exchange (CBOE) will host the second annual CBOE Risk Management Conference (RMC) Europe, from Monday, September 30 through Wednesday, October 2, at Penha Longa Resort in Sintra, Portugal. This highly-acclaimed conference, hosted annually in the U.S. by CBOE, is making its second visit to Europe this fall. For 29 years, the U.S. CBOE RMC has been regarded as the premier educational conference covering uses of equity derivatives to increase returns and manage risks.
Webinar: Maximise your EUREX trading potential
Thursday, June 13, 2013; 3:30 PM – 4:30 PM CDT
Attend our joint webinar to learn more about trading futures and options on EUREX NTA using the front end technologies offered by Actant – a leading provider of market making and trading solutions for financial firms trading on the world’s major derivatives and stock exchanges. Webinar Topics:
o Market Trends in High Frequency Trading
o Iceberg Orders and Market Depth Futures Trading
o Hidden Eyes and Options Trading
o Trading Futures with ExStream TickTrader. Introduction and programming workshop
o ExStream HitLift, introducing our low latency options edge seeker
To register, visit jlne.ws/ZnKqyK
MarketsWiki Page of the Day
Korea New Exchange
MarketsWiki Recent Updates
Companies, Organizations and Groups
40,128,033 pages viewed, 7,503 articles, 159,582 edits
EU Seeks Views on ICE-NYSE Commodity Impact Amid Trader Concern
Isis Almeida and Nandini Sukumar – Bloomberg
European regulators scrutinizing IntercontinentalExchange Inc.’s plan to buy NYSE Euronext asked users if the merger would reduce competition in soft-commodities markets amid concern among traders over fees and trading hours.
A Regulator Rift Roils Rules
MICHAEL R. CRITTENDEN AND JAMILA TRINDLE – WSJ.com
Foreign officials are stepping up criticism of pending U.S. financial rules as Washington moves closer to adopting regulations it considers critical to preventing a repeat financial crisis.
NYSE Liffe Sets July 1 Clearing Transition to ICE Clear Europe
NYSE Liffe, the derivatives division of NYSE Euronext and ICE Clear Europe, a wholly-owned subsidiary of IntercontinentalExchange, today announced plans to begin clearing the London-based derivatives market of NYSE Liffe on Monday, July 1, 2013, following successful testing with Clearing Members in recent weeks. Subject to relevant regulatory approvals, the transition process for open positions will occur over the weekend of June 29-30, 2013.
Aquis Exchange to charge up to £10,000 a month for subscription
Suzi Ring – Financial News
Aquis Exchange, a new European subscription-based equities trading venue expected to launch this year, will charge between £2,500 and £10,000 a month in its first six months of operation, Financial News has learnt.
Morgan Stanley’s Hadden Barred From CME Trading for 10 Days
Michael J. Moore – Bloomberg
Morgan Stanley (MS)’s head of interest-rates trading, Glenn Hadden, was suspended from accessing all CME Group Inc. trading floors for 10 days to resolve claims tied to his 2008 transactions in Treasury futures.
France Puts UBS Under Investigation for Aiding Tax Evasion
New York Times
A unit of the Swiss bank is under scrutiny following allegations that it designed investments for clients that were designed to evade taxes.
SAC Case Tests a Classic Dilemma
JAMES B. STEWART – NYTimes.com
Imagine the pressure on Mathew Martoma, the 38-year-old former portfolio manager at SAC Capital Advisors charged with insider trading who may — or may not — be in a position to implicate Steven A. Cohen, the hedge fund’s billionaire founder and owner.
Bloomberg Tactics Drew Ire in Bank World
JUSTIN BAER, WILLIAM LAUNDER AND MATTHIAS RIEKER – WSJ.com
Before the disclosure in May that Bloomberg LP’s news division had accessed customers’ personal usage data gathered on its terminals, there was an unusual phone call between Wall Street’s two most influential firms. After executives at Goldman Sachs Group Inc. learned of the Bloomberg practice in mid-April, they called J.P. Morgan Chase & Co. to compare notes, according to people familiar with the conversation. J.P. Morgan had a list of its own grievances over Bloomberg’s news practices that was even longer than Goldman’s, these people said.
Short Seller Seeks Valley ‘Pretenders’
JULIET CHUNG – WSJ.com
Creative hairstyles, fake names and shoe-leather sleuthing transformed Carson Block from a no-name expatriate in China into a celebrity short seller. But will such gambits translate elsewhere?
On Monday: Time to throw some light on shadow banking
John Authers – FT.com
Shadow banking has an image problem. Everyone agrees that it badly needs at least a rebranding. Meanwhile, its defenders keenly argue against the idea that it needs drastic re-regulation if it is to survive in any recognisable form at all.
Will Brokers Shape up After LPL Email Fine?
Ben DiPietro – Wall Street Journal
Failing to maintain an adequate email archiving system cost LPL Financial LLC a $7.5 million fine and at least a $1.5 million compensation bill, but the problem is much more widespread within the industry, says a fraud examiner.
Keynote Luncheon Speech By SEC Commissioner Elisse B. Walter, 32nd Annual SEC And Financial Reporting Institute Conference, Pasadena, CA
Speech By U.S. Federal Reserve Vice Chair Janet L. Yellen At The International Monetary Conference, Shanghai, China – Regulatory Landscapes: A U.S. Perspective
Remarks At The 32nd Annual SEC And Financial Reporting Institute Conference By Paul Beswick, Chief Accountant, Office Of The Chief Accountant, U.S. Securities And Exchange Commission
UK’s Financial Conduct Authority: Statement On Consultation Paper FSA CP12/25 ‘Enhancing The Effectiveness Of The Listing Regime’
ESMA – Final Report -Technical Advice On CRA Regulatory Equivalence On Argentina, Brazil, Mexico, Hong Kong And Singapore
ESMA: Call For Candidates – Commodities Derivatives Task Force
U.S. Federal Reserve Chairman Ben S. Bernanke At The Baccalaureate Ceremony At Princeton University, Princeton, New Jersey, June 2, 2013, The Ten Suggestions
[AMF France] Financial Regulation Newsletter No 10 – April 2013
Exchanges & Trading Facilities
MIAX Options Exchange Announces Temporary Transaction Fee Waiver For MIAX Market Makers, Completion of Symbol Roll Out and Performance Statistics
The MIAX Options Exchange, the newest U.S. equity options exchange, announced today that it will temporarily waive all transaction fees that apply to MIAX market makers for the period beginning June 3, 2013 and ending July 31, 2013.
Montreal Exchange Implements Continuous Trading
The Montreal Exchange today announced Continuous Trading will be implemented for the full suite of MX interest rate derivatives products. The regular session for BAX, OBX, ONX, OIS, CGZ, CGF, CGB, LGB and OGB will now run from 6:00 a.m. to 4:00 p.m. with no breaks. Both the early and extended sessions will be eliminated for these products, as will the Market-on-Open order type.
ASX participants support implementation of OTC clearing solution for Australian market
ASX has received approval from the required majority of its 14 futures clearing participants for the rule amendments to implement a new OTC Derivatives Clearing Service for the Australian market.
[TSE] Trading Overview in May 2013
Osaka Securities Exchange Trading Overview in May 2013
Total derivatives trading volume in May 2013 was 43,704,119 units, which hit a record high following the previous month.
Trading volume of Nikkei 225 mini in May 2013 was 32,789,461 units, which achieved the record high following the previous month.
Trading volume of Night Session in May 2013 was 14,426,401 units, which achieved the record-high for the fifth consecutive month.
Trading volume ratio of Night Session to Day Session in May 2013 was 50.2%.
Total trading value of ETFs market was 1,567.3 billion yen, which achieved the record-high for the fifth consecutive month.
TFX Trading Volume in May 2013
Combined trading volume for all TFX products was 7,010,477 ( 13.4% MoM / + 11.9% YoY) and its average daily trading volume was 306,856.
The total trading volume of Exchange FX Margin contracts (Click 365) in May was 5,556,545 ( 20.2% MoM / 1.7% YoY) and its average daily trading volume was 241,625.
BME: The Spanish Stock Exchange Traded E267.93 Billion To May
The equity trading volume on the Spanish Stock Exchange to the end of May was E267.93 billion, down 14.4% from the same period last year. The trading volume in May was E48.12 billion, down 16.5% from April.
LME Enhances Asian Benchmark Pricing
The London Metal Exchange (LME) today launched a new, shorter, pricing period for its Asian Benchmark prices in response to growth in Asian trading on the Exchange’s electronic platform, LMEselect. The new five-minute pricing window, reduced from 15 minutes, focuses liquidity and enhances the price discovery process.
EEX: Call for applications for the 2013 “Excellence Award” – Term for the submission of application ends at the end of September
The European Energy Exchange (EEX) issues the third call for applications for the EEX Excellence Award for outstanding research papers. Students and graduates are invited to submit their applications by 30 September 2013. Applications are subject to the precondition that the research paper or final thesis was completed in the second half of 2012 or in 2013.
[CBOE] Trader E-News
Program Trading Averaged 24.4 Percent of NYSE Volume during May 20-24
TOM MTF Statistics Week 22, 2013
Direct Edge Trading Notice #13-21: Fee Schedule Changes Effective June 3, 2013
Athens Exchange: ATHEX Market Operations Committee Decision
Hellenic Exchanges S.A. HELEX 12th Annual GM – Voting results
Amendment To MIAX Options Fee Schedule Beginning June 3, 2013
Hedge Funds & Managed Futures
US hedge funds threaten to flee Europe
Madison Marriage – FT.com
A number of large US hedge funds have scrapped plans to enter Europe and have put existing operations under review in response to new, burdensome European regulation.
Hedge fund, under fire, braces for withdrawals
The embattled hedge fund SAC Capital Advisors is bracing for investors to pull out as much as several billion dollars by a Monday deadline. The withdrawals have stepped up as a separate deadline looms for law enforcement officials investigating the firm.
Another legal headache for SAC’s Cohen
New York Post
As if hedge fund titan Steve Cohen didn’t have enough legal woes. The billionaire founder of SAC Capital — who is busy dealing with a federal insider-trading investigation and a bitter court battle with his ex-wife — has been hit with an appeal in a $6 billion racketeering case brought by insurer Fairfax Financial Holdings.
Vanguard makes foreign debut with international bond fund
Reuters via Yahoo! Finance
Vanguard Group on Friday launched an international bond fund that may appeal to investors hunting for yield in overseas markets.
Saunders beefs up Investec’s regulatory push
Mike Foster – Financial News
Richard Saunders, former chief executive of the Investment Management Association, has become non-executive director at Investec Asset Management.
Asian Buyers Shun U.S. Wheat
SAMEER C. MOHINDRU – WSJ.com
Ripple effects from the recent discovery of genetically altered wheat in Oregon spread around the world on Friday, as big buyers of U.S. wheat took steps to protect their food supplies.
CFTC Commitments Of Traders Reports Update
Hedge Funds Boost Gold Bull Bets Most in Two Months: Commodities
Hedge funds raised bets on a gold rally by the most in two months as the U.S. economy expanded less than previously estimated, boosting speculation the Federal Reserve will maintain the pace of stimulus.
Banks & Brokers
R.J. O’Brien Appoints Julie DeMatteo to Managing Director, Asset Management
R.J. O’Brien & Associates, the oldest and largest independent futures brokerage and clearing firm in the United States, announced that Julie M. DeMatteo, has joined the firm today and will serve as Managing Director, Asset Management.
Citigroup Verdict Over Guy Hands’s Terra Firma Thrown Out
A U.S. appeals court threw out the jury verdict in a lawsuit between Guy Hands’s Terra Firma Investments and Citigroup Inc. over the sale of EMI Group and ordered a retrial. The New York-based appeals court said Terra Firma is entitled to a new trial because of errors in the jury instructions.
Swiss Seen Passing U.S. Bank-Tax Law to Avoid Worse Fate
The Swiss parliament probably will pass a bill allowing banks including Credit Suisse Group AG and Julius Baer Group Ltd. to resolve a tax-evasion dispute with the U.S., dropping opposition for fear of leaving the country’s 300 banks to a worse fate, according to academics including Peter V. Kunz of the University of Bern.
Fed’s Yellen Urges Higher Bank Capital Rather Than Size Limits
Federal Reserve Vice Chairman Janet Yellen said she favors forcing the largest U.S. banks to hold additional capital rather than limiting their size or requiring sales of businesses.
Citigroup Hires ANZ’s Former Global Head of Fixed Income-Source
Citigroup Inc. has bolstered its Australian ranks with the hire of former ANZ Banking Group global head of fixed income Rob O’Callaghan, a person familiar with the matter said Monday.
JPMorgan Chase Spent $8 Million On Lobbying Last Year, More Than Any Other Bank
The Huffington Post
When it comes to working the refs, no bank works harder than JPMorgan Chase. The biggest U.S. bank by assets spent $8 million lobbying Congress on financial reform and other topics last year , outpacing every other large bank, according to the Center for Responsive Politics.
Morgan Stanley Cutting Correlation Unit Added $50 Billion
Michael J. Moore, Mary Childs & Erik Schatzker – Bloomberg
Morgan Stanley (MS) was shrinking its derivatives business to cut risk under new banking rules when three deals came along that it couldn’t resist.
Gottex Brokers Opens London Office
Gottex Brokers, one of the leading interdealer brokers in interest rate derivative products and a specialist in Swiss interest rate derivatives, today announces that it has opened a London office, focusing on agency brokerage.
Clearing & Settlement
Cor Financial Launches Salerio.CONNECT – A New Application Based On Proven Technology, Designed To Make First Time Automation Of Post Trade Processing Operations An Easy Decision For Buy-Side Firms
Indexes & Products
Deutsche Launches Hedged Germany ETF
Deutsche Bank today launched the db X-trackers MSCI Germany Hedged Equity Fund, the market’s first currency-hedged take on German equities, serving up access to German-listed stocks while neutralizing exposure to currency fluctuations between the euro and the dollar.
Fidelity Inches Closer to Launching Actively Managed ETFs
ETF Trends via Yahoo! Finance
Fidelity Investments seems to be slowly but surely moving toward a major expansion of its ETF business. The Boston-based financial services giant has filed to launch active ETFs that would invest in corporate bonds and mortgage-backed securities, report Cinthia Murphy and Olly Ludwig at IndexUniverse.
Vanguard ETF to Transition to CRSP Index
FIX Protocol Ltd Encourages Industry To Participate In The Review Of A New Representation Of FIX Designed To Support High Performance Trading
TZ Limited bookkeeper sentenced
Environmental & Energy
IATA May Propose Carbon-Cut Strategy Next Week, EU Says
The International Air Transport Association may propose measures to cut emissions from airlines, a step that could help a global deal on tackling pollution by the industry, a senior European Union official said.
**RKB — The importance of IATA’s proposal could be that for the first time we could see a sectoral agreement kicked off by an initiative from industry, that then has to be encapsulated by regulators, says the EC’s Delbeke.
EU may link carbon fix to economy’s revival
The European Union’s regulator is considering tools to link the supply of carbon permits with the bloc’s economic performance, according to Jos Delbeke, director general for climate at the European Commission.
U.K. Says Energy Law to Bring ‘Massive’ Cut in Pollution
Energy Secretary Ed Davey urged lawmakers to back away from immediately imposing targets for carbon emission from U.K. power plants, saying legislation being considered now will make a “massive” reduction.
Desperately seeking Chinese sovereign wealth fund chairman
Ruth Sullivan – FT.com
The investment industry is keenly watching for signs of white smoke rising above the building in downtown Beijing that houses China’s $500bn sovereign wealth fund. But its members may have to contain their curiosity a little longer as the country’s leaders scramble to fill the top job of chairman at the China Investment Corporation.
In China, Concern of a Chill on Foreign Investments
New York Times
A ruling by the top court is one of a number of recent signals that China’s long-assumed tolerance for foreign investment may be on the wane.
Index Treatment For Tokyo Stock Exchange/Osaka Securities Exchange Cross-Listed Issues After Cash Equity Market Consolidation
Appointments And Re-Appointments To Hong Kong’s Securities and Futures Commission Advisory Committee
HKEx Report On Initial Public Offering Applications, Delisting And Suspensions As At 31 May 2013
Borsa Istanbul and Tirana Stock Exhange sign MoU
Borsa Istanbul and Tirana Stock Exchange have signed a Memorandum of Understanding (MoU). The MoU signed by Mr. Mustafa Baltaci, Executive Vice President of Borsa Istanbul, and Anila Fureraj, CEO of Tirana Stock Exchange, is expected to develop the existing cooperation between Borsa Istanbul and Tirana Stock Exchange.
U.A.E., Qatar Potential Candidates for MSCI Upgrade, HSBC Says
The United Arab Emirates and Qatar could be upgraded to emerging-market status at MSCI Inc. this month after both nations improved market accessibility, HSBC Holdings Plc said in a report.
Object Trading Joins DGCX As Independent Software Vendor
Object Trading’s FrontRunner Direct Market Access Suite Increases Middle East Coverage In Response To Client Demand
ADX Partakes In FEAS 26th Executive Board Meeting
Dubai Financial Market Welcomes High Level Delegation Of Senators From The Republic Of Nigeria
Dubai Financial Market Market Holiday – Al Isra Wa Al Miraj
NASDAQ Dubai Welcomes Listing Of US Dollars One Billion Emirates NBD Bond
Tehran Stock Exchange To Hold AGM
Nigerian Stock Exchange Weekly Report For The Week Ended May 31, 2013
Bursa Malaysia Securities Berhad Invites Comments On Proposals In Relation To The Review Of Timeframe For Issuance Of Financial Statements And Annual Reports
Batman Participated In Archer Ltd’s Earnings Call Yesterday
By Bess Levin – NY Times
Operator: We will now take a question from Bruce Wayne with Wayne Enterprises. Please go ahead.