First Read

FinTech Exchange: Haraburda Says Alternative Data the Next Step
JohnLothianNews.com

How big is your data set?

Mark Haraburda, CEO of Barchart, which hosted the FinTech Exchange 2017 conference last month, said the data space is quickly expanding and innovating.

“This year the event has been focused on data, the way data is delivered, the way data is stored, the way data is analyzed and visualized as well as the new types of data in the alternative data space,” he said.

Read the rest and watch the video »

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TMX Group Remembers John Pearce Bunting, Former President and CEO of Toronto Stock Exchange
TMX
TMX Group today offers sincere condolences on the passing of John Pearce Bunting. Among the many highlights of his distinguished career in the Canadian financial services industry, Mr. Bunting holds the distinction of being the longest-serving President and CEO in the 165-year history of the Toronto Stock Exchange, leading the Exchange from 1977 to 1994.
/goo.gl/4LjIpf

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SEC approves request to list and trade quadruple-leveraged ETfs
Reuters
The Securities and Exchange Commission on Tuesday approved a request to list and trade quadruple-leveraged exchange-traded funds, marking a first for the growing market for such funds in the United States.
/goo.gl/3xW2DR

**JK: What’s all this talk about deleveraging?

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Happy birthday to the FinTech Hub!
Deutsche Bˆrse Cash Market
Deutsche Bˆrse’s FinTech Hub in Frankfurt is celebrating its first birthday. Four financial sector start-ups officially moved into the hub at the beginning of May 2016, and have been based there rent-free ever since. The hub offers 450 m2 of space in the up-and-coming Ostend area of Frankfurt, close to the trendy Berger Strasse. The Deutsche Bˆrse Venture Network staff is on hand to consult the FinTech companies and provide them with contacts.
/goo.gl/KlT1UF

**JK: First birthdays are so fun.

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What Nassim Taleb Can Teach Us
Jeff Deist – Mises Institute
Nassim Nicholas Taleb does not suffer fools gladly. Author of several books including The Black Swan and Antifragile, Taleb is known for his incendiary personality almost as much as his brilliant work in probability theory. Readers of his very active Medium page will experience a formidable mind with no patience for trendy groupthink, a mind that takes special pleasure in lambasting elites with no “skin in the game.”
/goo.gl/SrajPm

**JK: Taleb can lambast with the best of them.

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Super-rich private equity stars rue ‘lousy’ reputation, say they are misunderstood
By Lawrence Delevingne – Reuters
Ultra-wealthy private equity managers lamented their reputation as ‘lousy’ corporate profiteers at a plush Beverly Hills hotel on Tuesday, arguing their value to society was greater than the public realized.
/goo.gl/AqoQel

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Tuesday’s Top Three
Nobody likes to get served, but reading about it is another story. Our top most clicked article yesterday was UBS, BNP, RBS Get Subpoenas in U.S. Treasuries Probe. Second was a career update on Chris Mead, Arthur J. Gallagher & Co. Hires Chris Mead as its Chief Marketing Officer. Our third most clicked was https://goo.gl/anvA8h|Will Trump ‘Do a Big Number’ on the Big Banks?

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MarketsWiki Stats
96,455,099 pages viewed; 22,393 pages; 204,527 edits
MarketsWiki Statistics

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Lead Stories

LSE fires back at EU plot to seize euro-clearing
Lucy Burton – Telegraph
The London Stock Exchange has fired back at Brussels’ proposal to restrict London’s ability to host euro-clearing, warning that any restriction on the clearing of Euro swaps would “damage European issuers, savers, investors, pension funds and intermediaries”.
/goo.gl/IAjQxA

Jay Clayton Confirmed as SEC Chairman; Senate votes 61 to 37 to clear nomination, meaning he could be sworn in this week
Dave Michaels – WSJ
The Senate on Tuesday approved President Donald Trump’s choice to lead the Securities and Exchange Commission, elevating a Wall Street lawyer who hopes to turn around the decline in the number of public companies over the past 20 years.
/goo.gl/y7TygG

CFA Institute mulls adding ‘big data’ to financial analyst exam
Trevor Hunnicutt – Reuters
The CFA Institute will weigh changing its formidable exam to tackle artificial intelligence and the “big data” investors cull for an edge in markets, a senior official from the U.S. accrediting group said on Tuesday.
/goo.gl/dfJLMr

Brussels hoists gross UK Brexit ‘bill’ to EUR100bn; France and Germany back tougher approach to Britain’s departure obligations
Alex Barker in Brussels – FT
The EU has raised its opening demand for Britain’s Brexit bill to an upfront gross payment of up to EUR100bn, according to Financial Times analysis of new stricter demands driven by France and Germany.
/goo.gl/aeWCx7

London Stock Exchange Attacks EU Grab for Clearing Post-Brexit
by Annie Massa – Bloomberg
Exchange warns markets would be damaged if clearing moved; Euro clearing is key subject of tug of war between U.K., EU
London Stock Exchange Group Plc warned against a move from the European Union to limit euro clearing in its home city, saying the attempt would put investors and financial firms at risk.
/goo.gl/5FVuo6

JPMorgan to Move Hundreds of Staff to Three EU Offices on Brexit
Matthew Martin and Gavin Finch – Bloomberg
Pinto says bankers moving to Dublin, Frankfurt and Luxembourg; Bank is also planning to add staff in Middle East: Pinto
JPMorgan Chase & Co. plans to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg as it prepares for the U.K. to lose easy access to the European Union’s single market after Brexit, the firm’s head of investment banking said.
/goo.gl/cTvCyR

DTCC repo clearing gains regulatory approval; The DTCC’s FICC subsidiary has received approval from the SEC to expand central clearing in the repo market.
Paul Walsh – The Trade
The Depository Trust & Clearing Corporation (DTCC) has gained regulatory approval to expand its fixed income clearing service into repo markets.
/goo.gl/Vo6Ivw

Turquoise Plato block trading reaches EUR188 million record; Daily value traded record up 14% from previous record set in February this year.
Hayley McDowell – The Trade
The London Stock Exchange’s Turquoise Plato block trading saw its highest daily and weekly volumes in April this year.
/goo.gl/sqrdV6

EU will suffer: London Stock Exchange hits back at European Commission’s clearing proposals William Turvill – City AM
Euro clearing has emerged as a major battleground in the Brexit negotiations (Source: Getty)
New euro clearing plans due to be set out by Brussels could be an own goal for the EU, the London Stock Exchange has suggested.
/goo.gl/lwcgjG

Why Wall Street Has Stopped Listening to Donald Trump
Reuters
At an annual gathering of the world’s most powerful thinkers and trendsetters in Beverly Hills this week, business leaders and major investors said they have gotten used to dismissing most things that President Donald Trump says or tweets.
/goo.gl/cSdBhd

$14 BILLION FUND: A deal between 2 trading behemoths makes a lot of sense
Matt Turner and Rachael Levy – Business Insider
The London Stock Exchange’s search for a buyer hit a wall in March when the European Commission put the kibosh on a merger between the London Stock Exchange and Germany-based Deutsche Bˆrse.
/goo.gl/eKzp4F

Why Saudis’ MSCI Bid Matters And What They’ve Done to Get It
by Filipe Pacheco – Bloomberg
Country could be included in MSCI’s review list in June; Market capitalization has fallen about $140 billion in 2 years
Saudi Arabia wants foreign money, and it’s been overhauling one of the world’s most conservative financial markets to get it.
/goo.gl/nrTTyd

Exchanges, OTC and Clearing

Intercontinental Exchange Reports First Quarter 2017 GAAP Diluted EPS of $0.84 on Revenues of $1.2 billion; Adjusted Diluted EPS of $0.74
ICE
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses and provider of global data and listing services, today reported financial results for the first quarter of 2017. For the quarter ended March 31, 2017, consolidated net income attributable to ICE was $502 million on $1.2 billion of consolidated revenues less transaction-based expenses. First quarter GAAP diluted earnings per share (EPS) were $0.84.
/goo.gl/tGg0d1

LSE fires back at EU plot to seize euro-clearing
Lucy Burton – The Telegraph
The London Stock Exchange has fired back at Brussels’ proposal to restrict London’s ability to host euro-clearing, warning that any restriction on the clearing of Euro swaps would “damage European issuers, savers, investors, pension funds and intermediaries”.
jlne.ws/2ptX5DF

Peggy Sullivan exits NYSE
Matt Turner – Business Insider
Peggy Sullivan, a key figure at the New York Stock Exchange, has left the Big Board. Sullivan, who started at NYSE nearly 20 years ago, was vice president of strategic analysis and market data, according to her LinkedIn profile. She also served as the administrator of the Consolidated Tape Association, and headed market data for various NYSE markets. She left in the past week or so, according to people familiar with the matter. A spokeswoman for NYSE declined to comment.
jlne.ws/2pt27jQ

Intercontinental Exchange Reports April Statistics; ICE ADV up 26% y/y Driven by Financials ADV up 62% y/y, Commodities ADV up 7% y/y
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported April 2017 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/goo.gl/Kgrlmj

Intercontinental Exchange Approves Second Quarter Dividend of $0.20 Per Share
ICE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today a $0.20 per share dividend for the second quarter of 2017. The cash dividend is payable on June 30, 2017 to stockholders of record as of June 16, 2017. The ex-dividend date is June 14, 2017.
/goo.gl/3rdh53

Intercontinental Exchange Announces 2017 Investor Day
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced it will host an Investor Day on Friday June 2, 2017. The agenda will include presentations by ICE’s management team. The meeting will be webcast from New York, beginning at 1 p.m. ET and ending at 4:30 p.m. ET, and in-person attendance is by invitation only. The webcast and presentation materials will be available on the company’s website at ir.theice.com. A transcript and replay will be made available following the meeting.
/goo.gl/AXHCgt

Time to talk about settlement risk
Nazneen Sherif – Risk.net
Everyone can agree that collateralisation is, in general, a good thing. New rules on the margining of non-cleared over-the-counter derivatives trades, which started to be implemented in phases from September 1 last year, require market participants to post both initial and variation margin on covered trades, applying specific requirements laid out by regulators.
jlne.ws/2ptTSnv

Deutsche Boerse sees boost to trading activity in April; German exchange group sees growing average daily volume, with trading in Deutsche Bank dominating April.
John Bakie – The Trade
Deutsche Boerse’s cash markets saw increased average daily trading in April this year and rising transaction volumes.
/goo.gl/afnWKJ

Eurex geared for euro swaps clearing ruling; Eurex is expecting a rise in demand for continental-euro derivatives clearing services, with an EU ruling imminent.
By Joe Parsons – The Trade
Frankfurt-based Eurex is seeing a rise in demand for euro-denominated derivatives clearing, as a decision from Brussels on the future of the lucrative business looms near.
/goo.gl/64qoMV

Fintech

TT Desktop: A Powerful, New Reason to Want the TT Platform
Trading Technologies
Trading Technologies is very proud to announce the release of the new TT Desktop application. This release is a significant step forward for the TT platform, and a significant technical feat in its own right. What it means for our customers is that even the largest, most complex workspaces will thrive on TT Desktop, enabling access to the industry-leading benefits of the TT platform for our most demanding customers.
jlne.ws/2p8bcMf

Rival Systems Integrates with Lime Brokerage’s Low Latency Execution Gateways to Provide Clients with Broad Equity Market Access
Rival Systems
Rival Systems (Rival), an award-winning provider of trading and risk management software, and Lime Brokerage (Lime), a Wedbush Company, today announced an integrated solution combining Rival’s front-end trading and algorithmic strategy development software with Lime’s low latency execution services. The new offering, available immediately, enables Rival’s clients to access all U.S. equity markets and a wide range of dark pools via Lime’s exchange gateways and extensive equity memberships. The integrated solution further enhances Rival’s capability to provide clients with a comprehensive platform for trading futures, equities and options.
/goo.gl/LuXTb9

Equinix Q1 AFFO & Revenues Beat Estimates, Up Y/Y
Yahoo
EQIX posted better-than-expected first-quarter 2017 results, wherein both the top and the bottom line surpassed the Zacks Consensus Estimate and increased from the year-ago quarter.
jlne.ws/2p82RIy

eClerx Digital opens new Americas Headquarters in Austin, TX
eClerx
Today eClerx Digital opened its doors at the division’s new Americas Headquarters located in Austin, Texas
jlne.ws/2p8oatz

Jonathan Beyman Joins eClerx Markets as Strategic Advisor
Press Release
eClerx Markets is pleased to announce that industry veteran Jonathan Beyman has joined the company as a Strategic Advisor.
jlne.ws/2p8go2F

Another New Digital Innovation from CME Group Coming
By Bill Taylor – Finteknews.com
The CME Group, the most innovative exchange ANYWHERE has filed for a patent on a derivatives system that would allow cryptocurrency miners to offset their risks. Now folks, we know this is a little outside the norm for most investment managers’ lexicon, but we encourage you to stay with us on this story, as the CME is doing some of the most innovative digital product development on the planet.
/goo.gl/4ua8zW

Politics

‘This is a middle finger to America’: House hearing on Wall Street rules boils over
Pedro Nicolaci da Costa – Business Insider
A hearing on Tuesday to address the Financial Choice Act, the Republican proposal to repeal the 2010 reform law, quickly descended into an aggressive argument between members of the House Financial Services Committee, who are supposed to address the chairman of the committee, Jeb Hensarling, rather than one another.
jlne.ws/2qvJuub

Le Pen says capital controls an option during Frexit talks if she wins election
Ingrid Melander, Simon Carraud and Johnny Cotton – Reuters
Far-right presidential challenger Marine Le Pen said capital controls could be used if she won the election and there was a run on banks as she negotiated France’s exit from the European Union, but stressed they were unlikely to be needed.
jlne.ws/2qvz5i0

Big Winners in Donald Trump’s Tax Plan: The Wealthy; Proposals like eliminating the estate tax and the alternative minimum tax favor affluent households
Daisy Maxey – WSJ
President Donald Trump’s tax proposal appears to be a big win for high earners, but a lot depends on individuals’ specific situations and many crucial details are absent.
/goo.gl/X91X20

Opinion: Trump’s kleptocracy could be turning the U.S. into a banana republic
By Chris Edelson – MarketWatch
Lawsuits and other tools are needed to restrain presidential power
Donald Trump’s presidency has already undermined or called into doubt a number of fundamental norms of American democracy.
/goo.gl/uTJm9X

Barclays opens ‘biggest fintech center in Europe’ as it aims to experiment and spot early trends
Neil Ainger – CNBC.com
U.K. lender Barclays has opened a new innovation center in Shoreditch, London, for its in-house banking and technology teams, as well as more than 40 co-located financial technology (fintech) start-ups.
/goo.gl/SkGfMN

Regulation

Wall Street elite find it hard to bank on Trump’s breakup talk
Lawrence Delevingne, Svea Herbst-Bayliss and Olivia Oran – Reuters
At an annual gathering of the world’s most powerful thinkers and trendsetters in Beverly Hills this week, business leaders and major investors said they have gotten used to dismissing most things that President Donald Trump says or tweets.
jlne.ws/2ptY5Yt

OCC Congratulates Clayton On Confirmation As SEC Chairman, Looks Forward To Working With Him
Press Release
Craig Donohue, OCC Executive Chairman and CEO, said, “OCC congratulates Jay Clayton on his confirmation as SEC Chairman, and we look forward to working with him and the Commission on the key issues related to ensuring continued confidence by investors and market participants in the financial markets and the broader economy.
jlne.ws/2p8lAUg

SIFMA Statement on Confirmation of SEC Chairman Clayton
SIFMA
SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, on the Senate confirmation of Jay Clayton as Chairman of the U.S. Securities and Exchange Commission (SEC):
/goo.gl/lcmonc

NFA orders London, England commodity pool operator and commodity trading advisor Duet Asset Management Ltd. to pay a $1 million fine
NFA
National Futures Association (NFA) has ordered Duet Asset Management Ltd., an NFA Member commodity pool operator and commodity trading advisor located in London, England, to pay a $1 million fine.
/goo.gl/RjlA6V

“Have you read the revamped May 2017 issue of IQ: ISDA Quarterly?”
ISDA
www2.isda.org/attachment/OTM3Mw==/IQ V3 Iss1 RGB-lo.pdf

ESMA statement to ECON Hearing on CRA Regulation
ESMA
The European Securities and Markets Authority (ESMA) participated in a scrutiny hearing of the Economic and Monetary Affairs Committee at the European Parliament in Brussels this morning on the Credit Rating Agencies (CRA) Regulation.
/goo.gl/lqFDxx

SEC Probes Solar Companies Over Disclosure of Customer Cancellations; Some customers say they canceled contracts after being strong-armed into solar-energy
Kirsten Grind – WSJ
Federal regulators are investigating whether solar-energy companies are masking how many customers they are losing, according to a person familiar with the matter.
/goo.gl/Kqz2pD

Stock Connect trader investigated by regulators seeks judicial review
Karen Yeung – South China Morning Post
Tang Hanbo, the first Chinese trader to be penalised by regulators for breaching securities regulations involving Hong Kong stocks, is seeking a judicial review in the city to revoke and invalidate a search conducted on his residence, claiming the gathering of evidence was unlawful.
jlne.ws/2qvyM6I

ASIC supports second-phase extension of groundbreaking whistleblower research project
ASIC
ASIC has welcomed and strongly endorsed today’s announcement of the second stage of the ground breaking research project ‘Whistle While They Work’, which will lead to a strong information base to assist considerations of whistleblowing practices.
/goo.gl/h2PX0f

Investing and Trading

It Took Investors Just Four Months to Pull Nearly $7 Billion From Hedge Fund Giant; The redemptions from Och-Ziff Capital Management Group signal more investor unease with big money managers
Geoffrey Rogow – WSJ
Investors pulled nearly $7 billion from the largest publicly traded hedge-fund firm in the U.S. in the first four months of 2017, the latest sign of investor disillusionment with Wall Street’s most prominent money managers.
/goo.gl/xq650q

Ask a “Bond Vigilante”: Is the US budget really going to cause trouble?
Alexandra Scaggs – Financial Times
Remember the bond vigilantes? You know, those all-powerful masters of the universe who can make presidents and monarchs beg for lower borrowing costs? (We’re assuming our readers are familiar with the James Carville quote.) Every so often there’s a story about their potential comeback, and the Trump Administration’s profligate spending! will bring the force of vigilante market justice! to bear on the US. We are not convinced.
jlne.ws/2qvI7vv

Trump’s 100-Year Bonds Contain Lots of Risks for Traders
Scott Dorf – Bloomberg
As a former Goldman Sachs bond trader and hedge fund manager, U.S. Treasury Secretary Steven Mnuchin might have felt some pity for volatility-deprived traders of Treasuries. In fact, the market was in a funk until Mnuchin’s comments Monday on the rising odds of the government issuing ultra-long maturity bonds smashed longer-dated debt.
/goo.gl/QiNPqn

Multi-Factor Merits: Are You Putting All Your Eggs in One Single-Factor Basket?
Andrew Innes – S&P Dow Jones Indices Indexology
It is undeniable that an individual investor would need considerable skill (or luck) to navigate optimally between the various single-factor equity strategies. If the goal is to outperform the benchmark, then simply choosing between a quality, value, momentum, or low volatility strategy may present the biggest risk.
jlne.ws/2qvG1vu

Institutions

Ex-Credit Suisse Trader Lures $1.6 Billion of Client Cash
Donal Griffin – Bloomberg
Options trader Kapoor sets up Volaris firm to advise clients; Kapoor joined by two colleagues who have also quit Swiss bank
Vivek Kapoor, a trader in complex equity products, has left Credit Suisse Group AG’s asset-management unit to run his own firm with about $1.6 billion of assets he oversaw, a person familiar with the matter said.
/goo.gl/2DqEZV

ADM sees weaker agricultural services outlook on trading woes, shares dive
Karl Plume – Reuters
U.S. agricultural trader Archer Daniels Midland Co on Tuesday cautioned that massive global grain stocks are making it difficult to turn a profit trading grain internationally, sending its shares plummeting despite reporting a higher first-quarter profit.
jlne.ws/2ptNwow

Barclays CEO Staley in dispute with KKR over soured deal: WSJ
Reuters
Barclays (BARC.L) Chief Executive Jes Staley is involved in a dispute with private equity firm KKR & Co (KKR.N), which is a client of the bank, the Wall Street Journal reported on Tuesday. KKR has complained to Barclays over Staley’s actions on behalf of his brother-in-law after a deal between Jorge Nitzan and the buyout firm went sour, the WSJ said, citing sources familiar with the case.
jlne.ws/2qvXELF

Regions

The Hot-Air Model of Chinese Asset Markets
Nathaniel Taplin – WSJ
Talk to any young adult in a big Chinese city and the subject of yali, or pressure, will quickly come up. China is without a doubt a high-pressure society: Inequality is intense, pollution and traffic are often unavoidable and family obligations can be overwhelming.
jlne.ws/2psSWA8

Saudi finance minister vows reform push despite benefits U-turn; Mohammed al-Jadaan plans to inject billions of dollars into economy to boost growth
Simeon Kerr – FT
Saudi Arabia’s finance minister says he will inject billions of dollars into the country’s economy to stimulate growth, while also pledging to push ahead with unpopular reforms after the government’s surprise benefits U-turn last week.
/goo.gl/UfpuOk

Banking Is Only The Start: 27 Big Industries Where Blockchain Could Be Used
CBInisghts
Bitcoin’s existence as a decentralized digital currency is made possible by what’s known as blockchain technology, essentially a public ledger that securely and automatically verifies and records a high volume of transactions digitally.
/goo.gl/RZlkxU

Brexit

Davis Threatens to Walk Away From Brexit Talks if U.K. Provoked
by Eddie Buckle and Tim Ross – Bloomberg
Dimisses report from Juncker-May dinner as ‘gossip and spin’; May says EU’s Juncker learning she can be ‘bloody difficult’
Brexit Secretary David Davis flatly rejected a reported bill of as much as 100 billion euros ($109 billion) from the European Union, and threatened to walk away from the bloc without a deal if provoked.
/goo.gl/3LRr9K

EU Brexit Chief Barnier Takes Tough Opening Line on Talks
by Ian Wishart , Nikos Chrysoloras , and Eddie Buckle – Bloomberg
Draft negotiating mandate includes U.K. bill, Ireland border; Plan scheduled for approval May 22 with talks starting in June
The European Union narrowed the scope of the opening round of the Brexit negotiations to just the terms of the U.K.’s withdrawal from the bloc, dashing Theresa May’s ambitions to immediately start discussions on a future trade deal.
/goo.gl/IbKyMt

Miscellaneous

A hedge fund billionaire says Chicago’s roads are ‘borderline third world’
Rachael Levy – Business Insider
Hedge fund billionaire Ken Griffin said he finds US infrastructure a disgrace.
/goo.gl/96x0MF

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