Derivatives Industry Joins Forces to Launch Futuresfundamentals.org Education Resource
Today at FIA Expo, the largest gathering of futures market participants in the world, futuresfundamentals.org was launched to provide information and curriculum for learners of all levels to understand the role that derivatives markets play in the global economy and our everyday lives.
***** This is big news for the industry and holds great potential to help it tell its story to new potential customers and professionals. It could be a great growth driver for the years to come if done well.~JJL
Hits & Takes
Check out our second Deep Dive With JLN show with Trading Technologies’ Drew Shields and CME Group’s Julie Armstrong who talk about data, cloud technology and what’s next in the space. You can view all of it, or in short segments HERE
Some notes from FIA Expo, day one:
The exchange leaders panel focused solidly on regulation. Nasdaq’s Adena Friedman said the goals of regulation have been distorted by the political process. CME’s Terry Duffy called for the repeal of the Volcker Rule, which prevents banks from trading in derivatives markets but not cash markets.~JK
Duffy also said EMIR 2.0 is the real problem and the EU is trying to be the regulator for the world. “We don’t need the exact same laws in every country,” he said.
Friedman said regulations were choking off liquidity and deterring many companies from going public. ICE’s Jeffrey Sprecher said that, while some issues should fall to the regulators to tackle, they should let the markets resolve competition issues.~SR
The Shark Tank-esque Meet The Innovators session featured several start-up tech firms. All impressed. Predata’s CEO detailed how the firm scours social media for predictive indicators which preceded moves in Saudi Arabia that affected crude oil prices and nine out of the last ten mining strikes in Chile, affecting metals markets. ~JK
Last year’s innovator winner, Money.net, now has more than 60,000 registered users. Its $150 per month plan is appealing to those not interested in paying Bloomberg terminal fees.~JK
Expo keynote speaker Bob Woodward said the concentration of presidential power has continued to increase since his reportage on Nixon. A psychiatrist friend told him his attempts to treat people with narcissistic personality disorder never worked. He couldn’t change them one bit, and in the worst case scenario they ended up changing him. Similarly, Woodward said Trump can’t be changed but has already changed us as Americans. Woodward added he once quoted Obama to Trump as saying power comes to the U.S. through its restraint and humility. Trump replied that real power is fear.~SR
LabCFTC will have office hours in Chicago at FIA Expo. Meet with Dan Gorfine.~JJL
Deep Dive: The Boom In Big Data Could Mean Democracy For All
The global financial markets are facing perhaps the biggest technological cycle in their history, with the growth of faster technology, the adoption of the cloud and now new data mining tools. JLN’s Jim Kharouf spoke with Drew Shields, chief technology officer at Trading Technologies, and Julie Armstrong, executive director, global head of market technology services at CME Group, about latest trends in data and how they are reshaping the industry.
Watch the video and read the rest here »
Dow’s Climb Above 23000 Comes 30 Years After Black Monday; The Dow dropped 508 points on Oct. 19, 1987, a 22.6% decline that remains the index’s biggest ever
Ben Eisen, Ken Jimenez and Tom Destefano – WSJ
The stock market crashed 30 years ago.
***** The 1987 crash was a nightmare I was awake for. Today we have different nightmares.~JJL
The Opioid Addict on the Trading Floor; Wall Street professionals get hooked, and some executives see an opportunity.
Max Abelson and Jeanna Smialek – Bloomberg
When things got bad for trader Trey Laird, he was drinking alone after work and doing cocaine on the evening train to Connecticut. But his biggest problem was swallowing about 160 milligrams of OxyContin every day. He spent his time high, thinking about getting high, coming down or running out of his Lazard Capital Markets office in Manhattan to meet a dealer.
***** The problem is everywhere.~JJL
Wednesday’s Top Three
Wednesday’s top pieces were led by the video clip from Bloomberg about job shifts in
There’s So Much Pain in Agriculture That Traders Are Leaving. Second went to Adam Ludwin from Coin in his An Open Letter to Jamie Dimon. Third went to Bloomberg’s video clip Wall Street Poised to Get a Key SEC Reprieve Over MiFID
|MarketsWiki Statistics Sponsored by Level Trading Field|
Xavier Rolet: London Stock Exchange CEO and vocal Brexit critic to step down by end of 2018
Josie Cox – Independent
Mr Rolet has led the exchange for almost a decade, dramatically expanding the group’s market capitalisation from around £800m to almost £14bn Xavier Rolet, the chief executive of the London Stock Exchange Group and a vocal critic of Brexit, intends to step down from his role at the top of the iconic institution by the end of next year.
SEC Names J.P. Morgan Executive as Top Regulator of Exchanges; Brett Redfearn will also oversee regulation of broker-dealers and high-frequency traders
By Dave Michaels – WSJ
The Securities and Exchange Commission on Wednesday tapped J.P. Morgan Chase JPM 0.38% & Co.’s top electronic-trading executive as a senior regulator, signaling an appetite for shaking up rules that are blamed for fragmenting trading across dozens of venues and fomenting the rise of high-frequency trading.
‘Psychopath’ Hedge Fund Managers Make Less Money; Being manipulative and mean isn’t the secret to success, a new study by two psychology professors says.
By Ben Steverman – Bloomberg
Maybe the secret to success on Wall Street is being nice. In the world of high finance, it’s been an article of faith among some that the only way to succeedóor even surviveóis to be ruthless. But a new study in the latest issue of the Personality & Social Psychology Bulletin suggests those money makers at the top of the food chain, hedge fund managers, could benefit from being a little less mean.
Daniel Maguire appointed as Chief Executive Officer of LCH Group
Suneel Bakhshi to step down as Chief Executive Officer of LCH Group; Suneel to assume role of Chairman, LSEG International Advisory Groups
LCH, a leading global clearing house, today announces that Daniel Maguire has been appointed as Chief Executive Officer of LCH Group, with immediate effect. The appointment follows Suneel Bakhshi’s decision, earlier this summer, to step down from his role as Chief Executive Officer of LCH Group after four years in the role. Since his appointment in 2013, Suneel has set the foundations for ongoing sustainable growth, developing LCH’s resiliency and efficiency as a systemically important institution and expanding the Group’s global business offering.
Beneath the Market Rally: A Lot Less Trading; Low volatility, rise of passive funds and lack of market-moving news have kept many investors on sidelines
By Riva Gold – WSJ
Stocks continue to hit record highs, yet those pushing them there are trading less and less.
World’s Biggest Oil Traders See Wildly Diverging Crude Price
By Grant Smith , Javier Blas , and Manus Cranny – Bloomberg
Gunvor and Glencore see crude at $60 as demand growth quickens; ‘Huge’ wave of U.S. shale could push price to to $45: Vitol
The world’s biggest oil traders say crude could rise above $60 a barrel in a year as demand grows and OPEC keeps cutting. Or it might fall to $45 as another wave of U.S. shale hits the market.
Clearing the decks: Top London clearing house shakes up executive leadership
Oliver Gill – City AM
Daniel Maguire was appointed LCH’s chief operating officer in April 2017 (Source: Getty)
LCH, the top clearing house group owned by the London Stock Exchange, today announced a shake-up of its leadership.
Hedge Fund Stars Are Losing Their Sway
By Simone Foxman, Mathieu Benhamou and Jeremy Scott Diamond – Bloomberg
Just after 2:30 p.m. on Nov. 17, 2015, shares of Universal Insurance Holdings Inc. started tumblingó10 percent, 20 percent, 30 percent.
Tezos Raised $232 Million in a Hot Coin Offering, Then a Fight Broke Out; Management battle is threatening the deal and highlighting the risks of initial coin offerings
By Paul Vigna – Bloomberg
One of the year’s biggest initial coin offerings, a $232 million token sale by Tezos, is embroiled in a management fight that is threatening the deal and highlighting the risks in this red-hot corner of finance
Wall Street Brokerages Boosted by Rise in Fee Accounts, Client Borrowing; Shift has been a boon to brokerages as higher client assets on the fee side mean a bigger benefit from rising markets and higher interest rates
By Lisa Beilfuss – WSJ
Wall Street’s biggest brokerages posted double-digit gains in third-quarter profit as clients continued to move money into fee-based accounts and take on more debt.
Exchanges, OTC and Clearing
Chief executive of the London Stock Exchange Group Xavier Rolet is stepping down
Courtney Goldsmith – City AM
Xavier Rolet is the chief executive of the London Stock Exchange Group (Source: Getty)
The boss of the London Stock Exchange Group (LSEG) has announced he will step down by the end of December 2018.
Deutsche Bank expects early 2018 decision on LCH exit; LSE chief slams clearing relocation proposals for trying to create captive European Union market
Luke Clancy – Risk.net
The clearing industry needs to jointly agree on whether to relocate swaps clearing away from London-based LCH by early next year to ensure continuity of service for clients in the event of a hard Brexit, Deutsche Bank’s regulatory head has warned.
CME Group and JPX Enter into Agreement to Launch Japanese Yen-Denominated TOPIX Futures Contract on CME
CME Group, the world’s leading and most diverse derivatives marketplace, and Japan Exchange Group (JPX), Asia’s leading comprehensive exchange group, today announced the launch of Japanese Yen-denominated Tokyo Stock Price Index (TOPIX) futures contracts to begin trading on CME Globex by Q1 2018, pending all relevant regulatory review periods.
Nasdaq, SGX in pact to woo firms interested in listing on both boards
Elzio Barreto – Reuters
(Reuters) – Singapore Exchange Ltd (SGX) (SGXL.SI) and Nasdaq Inc (NDAQ.O) said on Wednesday they were teaming up to woo fast-growing Asian tech firms interested in listing on both their exchanges, as they look to better compete for mid-sized IPOs.
Nasdaq and SGX Establish Collaborative Listings Agreement
Nasdaq Inc. (Nasdaq:NDAQ) and Singapore Exchange (SGX) today announced the signing of a collaborative agreement in a move to leverage their strengths as two of the leading listings venues in the U.S. and Asia respectively. The new agreement seeks to enhance the channels available for companies to access capital market funding and enhance their corporate profile in both markets.
Quantile Launches LCH Compression Service
Quantile Technologies Limited (“Quantile”) has successfully completed its first compression run at LCH, the world’s largest clearing house for OTC derivatives. This follows its recent appointment as an Approved Compression Service Provider at LCH’s SwapClear service, the first service provider to be given this status in nine years.
Implementation of upcoming requirements regarding key information documents under the regulation for packaged retail and insurance-based investment products (PRIIPs regulation) by Eurex Deutschland
This circular outlines important information regarding the implementation of upcoming requirements regarding key information documents under the regulation for packaged retail and insurance-based investment products (PRIIPs regulation) by Eurex Deutschland.
VARTA AG has been listed on the Frankfurt Stock Exchange since today; 8.6 million new shares placed / first prize: 24.25 euros
VARTA AG (ISIN: DE000A0TGJ55) has been listed in the Prime Standard at the Frankfurt Stock Exchange since today. During the IPO, 8.6 million new shares were admitted to trading. The first exchange price was 24.25 euros, the issue price was 17.50 euros.
Introduction of “JPX-Chicago Co-Location Direct” as a new arrownet-Global service.; About JPX-Chicago Co-Location Direct
Japan Exchange Group, Inc. (JPX) has announced the launch of Japanese Yen-denominated Tokyo Stock Price Index (TOPIX) futures to begin trading on Chicago Mercantile Exchange (CME) Globex by Q1(January – March) 2018.
In accordance with this, Tokyo Stock Exchange, Inc. (TSE) decided to provide “JPX-Chicago Co-Location Direct” which enables Users to have low-latency and efficient connections between financial markets in Chicago, where major derivatives exchanges like as CME are located, and JPX Co-Locations as arrownet-Global service with the cooperation of global network carriers (hereinafter ”Partner carriers”).
Meritocracy ‘Myth’ Can Hold Companies Back, Experts Say; Many tech firms haven’t shown big gains in minority hiring, particularly for technological roles
By Greg Bensinger – WSJ
The ideal of a meritocracy may be holding back technology firms in their push to increase minority hiring, according to experts who work with tech companies on diversity.
One of the Biggest ICOs Plummets After Manager Spat Comes to Light
By Yuji Nakamura and Lulu Yilun Chen – Bloomberg
Tezos was once world’s largest ICO after raising $232 million; December futures on Tezos tokens drop by 58% on Bitmex
Tezos, the startup which raised $232 million in a July initial coin offering, plunged on derivative exchanges after revealing a management spat and little progress in developing its product.
The U.S. Lags Behind China in Spotting Cyberthreats; Hackers have a head start in exploiting system flaws.
By Dune Lawrence – Bloomberg
In March, the Apache Software Foundation announced it had discovered a critical flaw in its software, one now famous as the unpatched Achilles’ heel of Equifax Inc. that allowed hackers to make off with sensitive information on 145 million Americans.
Special Report: Backroom battle imperils $230 million cryptocurrency venture
Anna Irrera, Steve Stecklow, Brenna Hughes Neghaiwi – Reuters
Just three months ago, a tech project called Tezos raised $232 million online in a wildly successful “initial coin offering,” in which new digital currency is parceled out to buyers. At the time, it was the most money ever raised from the public in the white-hot cryptocurrency sector.
Japan finance sector to reap digital currency benefits, says MUFG chief
The chief executive of Japan’s largest bank expects new business opportunities to appear as digital currencies allow collection of data on how people use their money.
J.P. Morgan’s Jamie Dimon May Hate Bitcoin, but He Loves Blockchain; Bank rolls out a pilot program to use the record-keeping technology to speed global payments
By Emily Glazer – WSJ
J.P. Morgan Chase JPM 0.38% & Co. Chief Executive James Dimon recently trashed the digital currency bitcoin as a fraud that will blow up. But he is still enamored with the technology that underpins it and other virtual currencies.
Why Democrats Need Wall Street
By DOUGLAS SCHOEN – NY Times
Many of the most prominent voices in the Democratic Party, led by Bernie Sanders, are advocating wealth redistribution through higher taxes and Medicare for all, and demonizing banks and Wall Street.
MOST AMERICANS FEAR MAJOR WAR UNDER TRUMP, POLL SHOWS
BY HARRIET SINCLAIR – Newsweek
The majority of Americans fear the country will get involved in a major war during Donald Trump’s first term as president, with most people viewing North Korea as an enemy and the biggest threat to the U.S.
Tom Hayes Can Appeal Confiscation of $2.5 Million U.K. Home
By Suzi Ring – Bloomberg
U.K. court said Tom Hayes can appeal confiscation of house; Hayes is serving an 11-year sentence over Libor-rigging
Tom Hayes, the former UBS Group AG and Citigroup Inc. trader jailed for 11 years over Libor rigging, was granted permission by a London court to appeal part of his confiscation order related to the family’s 1.9 million-pound ($2.5 million) home.
Cryptocurrencies like bitcoin are not ‘mature’ enough to regulate, ECB chief Mario Draghi says; ECB chief Mario Draghi said cryptocurrencies like bitcoin are not “mature” enough; Cryptocurrencies “should be embraced with lots of attention to its potential risks”; Regulators have taken different approaches to creating rules around cryptocurrencies
Arjun Kharpal – CNBC
Cryptocurrencies are not “mature” enough to be considered by the European Central Bank (ECB) for regulation, Mario Draghi said.
CFTC’s Giancarlo signals priorities; focus on swaps, algos, position reporting
Todd Ehret – Reuters
The U.S. top commodities regulator has been operating with as few as two commissioners in 2017 and hasn’t had a full slate of five commissioners for nearly three years. Now, finally after some recent confirmations by the U.S. Senate, the commission is nearing its intended size and is now signaling its priorities ahead.
CFPB Enforcement Chief to Step Down; Planned departure of Anthony Alexis could mean changes to how regulator polices financial firms
By Yuka Hayashi – WSJ
The Consumer Financial Protection Bureau’s enforcement chief, Anthony Alexis, plans to leave the agency, a move that could herald a significant change in the way the regulator polices financial companies.
The FMA and ASIC confirm trans-Tasman collaborative approach to fintech
The Financial Markets Authority (FMA) and the Australian Securities and Investments Commission (ASIC) have re-affirmed their commitment to collaboration and cooperation on the expanding opportunities in fintech and innovation.
ESMA produces first overview of EU derivative markets size
The European Securities and Markets Authority (ESMA) has produced, for the first time, data on the size of the interest rate, credit, equity, commodity and foreign exchange derivatives markets in the European Union’s (EU), based on the weekly data it receives from trade repositories (TRs).
6 Financial To-Dos After Saying “I Do”
KAITLYN KIERNAN – FINRA
The honeymoon is over, the thank-you cards are in the mail and it’s time to think about your financial future.
Amendments to the Code of Arbitration Procedure for Customer Disputes to Expand the Options Available to Customers if a Firm or Associated Person Is or Becomes Inactive
When respondents are no longer in business, recovery of arbitration awards against them often is unavailing. Accordingly, FINRA is proposing to amend the Code of Arbitration Procedure for Customer Disputes (Code) to expand a customer’s options to withdraw an arbitration claim if a firm or an associated person becomes inactive before a claim is filed or during a pending arbitration. In addition, the proposed amendments would allow customers to amend pleadings, postpone hearings and receive a refund of filing fees under these situations.
FINRA Requests Comment on the Efficacy of Allowing Compensated Non-Attorneys to Represent Parties in Arbitration
Comment Period Expires: December 18, 2017
The FINRA Codes of Arbitration and Mediation Procedure permit compensated non-attorneys to represent clients in securities arbitration and mediation subject to certain exceptions. FINRA is conducting a review of the efficacy of continuing to allow such representation. The Notice outlines FINRA’s review of compensated non-attorney representatives’ (NAR firms) activities at the forum and seeks responses to questions related to forum users’ experiences with NAR firms.
SEC Names Brett Redfearn as Director of the Division of Trading and Markets
The Securities and Exchange Commission today announced that Brett Redfearn has been named Director of the agency’s Division of Trading and Markets.
SEC Announces 2017 Government-Business Forum to Be Held at University of Texas at Austin
The Securities and Exchange Commission today announced it is partnering with the Herb Kelleher Center for Entrepreneurship, Growth, and Renewal at the McCombs School of Business at The University of Texas at Austin to host the SEC’s annual Government-Business Forum on Small Business Capital Formation on November 30. This annual forum provides a platform to highlight additional measures to improve small business capital formation and address whether unnecessary, duplicative, or outdated regulations can be eliminated or reduced.
Investing and Trading
Fund managers face shortage of European junk bonds; Tesco buyback comes in shrinking market, with more groups reclaiming stronger ratings
Robert Smith – FT
A blockbuster bond buyback by Tesco comes at a pivotal moment for fund managers owning European high-yield debt, with more cash chasing fewer bonds as bellwether companies vacate the speculative-rated debt universe.
The tug of war grows more fraught for investors; The IMF and World Bank meetings mixed optimism about the global economy with plenty of concerns
Mohamed El-Erian – FT
A “Yes, but” emerged from last week’s global gathering of policymakers that provides a comprehensive check-up for the global economy. In Washington for the 2017 Annual Meetings of the International Monetary Fund and World Bank, officials from almost 190 countries mixed excitement about the improving prospects for the global economy with caution about a list of actual and potential challenges.
American Express C.E.O. Ken Chenault to Step Down
By STACY COWLEY – NY Times
Kenneth I. Chenault, one of the longest-serving executives in finance and one of corporate America’s few black top leaders, will retire next year as the chairman and chief executive of American Express.
Hedge Fund Maverick Capital Debuts 0% Performance Fees; New ‘recovery share’ class will lower fees for existing clients
By Juliet Chung – WSJ
Lee Ainslie’s $10 billion Maverick Capital Ltd. is offering 0% performance fees to some investors, the latest big-name hedge fund to debut lower fees after posting continued losses.
Goldman Sachs suffers an identity crisis; Retail banks used to envy its glamour but now it needs to mimic them
John Gapper -FT
Goldman Sachs making too little money is not the worst of the world’s problems. But inside the investment bank’s New York headquarters, it feels like an insult.
Goldman Opens Up, But Analysts Want More
Liz Hoffman – WSJ
Goldman Sachs Group Inc. is ?dropping its shroud of secrecy a bit, but is under pressure to go further.
China expands anti-corruption watchdog’s power; Communist party seeks to cement its control over society
Lucy Hornby in Beijing – FT
China’s anti-corruption watchdog is set to gain even greater powers, as part of a broader attempt by the Communist party to cement its control over Chinese society.
Zhou Warns China Should Defend Against Threat of ‘Minsky Moment’
PBOC governor warns optimism in good times can fuel tensions; Money supply growth picked up as economy expanded as forecast
People’s Bank of China Governor Zhou Xiaochuan warned Thursday against excessive optimism that could spur a sudden collapse in asset prices, adding to the caution top leaders have expressed this year as they redouble efforts to keep rising debt from derailing growth.
Banks say EU’s grab for London’s financial sector could backfire
Huw Jones – Reuters
A push by European Union countries to grab a slice of London’s financial sector ahead of Brexit could backfire by raising costs for consumers and companies on the continent, the UK’s main banking industry body said on Wednesday.
How to Deal With Scaramucci and Faber: Don’t; Ignore those trading on outrage.
By Matt Levine – Bloomberg
Yesterday was not a great day for some fringe financial figures. Marc Faber, a popular recurring character on financial television, said a lot of really racist stuff in his newsletter, throwing in an “I am not a racist but” for good measure. He was quickly kicked off three corporate boards and banned from several television channels, including Bloomberg’s, so let’s never talk about him again. I am sure someone else can step up to tell you to buy gold.