John Lothian Newsletter: Bats CEO Scuttled IPO on Potential for Erratic Trading; Alliances offer solution for exchanges; E-Mail to Corzine Said Transfer Was Not Customer Money

Mar 26, 2012

BATS Exchange dominates the news today, with stories covering the Friday fault and subsequent IPO withdrawal, the letter from CEO Joe Ratterman, and analysis about the company’s next steps. As exchange mergers fail to complete, international alliances may be a better way to expand and solidify market share. An email to MF Global’s ex-CEO Jon Corzine regarding a late-October customer funds authorization, is now revealed to have told Corzine that the funds were NOT related to customer funds. The CBOE and ISE draw lawyers at ten paces and begin a battle over ISE’s Max SPY product, which CBOE says violates a license agreement it has with S&P. In the top box, Jim Kharouf comments on BATS; and Jeremy Grant posts memories of Chicago, and a nod to John L.

Observations – Statistics – Commentary

To Err is Technical
By Jim Kharouf

On Sunday night, BATS‘ CEO Joe Ratterman sent a letter to customers apologizing for the company’s failed IPO on Friday. The embarrassing moment occurred after a technical problem prevented the proper pricing of BATS stock as it rolled from its IPO to regular trading. BATS ultimately scuttled the IPO after trying to resolve the problem and now is trying to pick up the pieces from there. (You can read the full letter below.)

As Ratterman put it, “we were under the brightest spotlight imaginable … opening our own stock on our own exchange for the first time ever. It doesn’t get much more public than that.”

What I liked about the letter was Ratterman’s candor. No doubt, he and his team spent many long hours examining what went wrong and many more thinking about how to address it. He said Friday’s failure “had no excuses.” He said they tested the technology leading up to the IPO for several months and added that “it shouldn’t have failed, but it did, and the timing could not have been worse.”

It would be easy for those in the financial markets to joke about BATS. It’s an easy target at the moment. But there isn’t an exchange or financial firm out there that hasn’t had technical problems at some of the most inopportune times.

It reminded me of the story of Michael Bloomberg giving the first demo of his Market Master terminal to Merrill Lynch, which wowed traders until it crashed in a matter of seconds. Merrill bought the first 22 terminals from Bloomberg in 1982. Today, Bloomberg says it has more than 310,000 subscriptions for its professional services.

The question for Ratterman and his team is, will this be an insurmountable setback or a springboard to something great?

A Note From The BATS CEO To Its Customers
It is with great humility that I write to you for the first time in quite some while. As you are probably aware, we have been working towards a planned IPO for many months, and as a result of the quiet period restrictions I did not reach out as often as I would have liked recently.
http://jlne.ws/H5Ozvf

++++

John Lothian Researching Sand Futures
John Lothian is down in Florida this week, testing the orange crop and investigating the possibility of creating new futures contracts for sand-related products. As always, you can send newsworthy items to jonmatte@johnlothian.com (both for general financial news and for FX-related topics).

++++

Note from Jeremy Grant, Financial Times
As John Lothian reported some weeks ago, I’m heading to Singapore with the Financial Times. Although I’m picking up a new beat (the snappy job title is Asia Regional Corporate Correspondent) I will by no means be leaving behind the world to which he had a big part in introducing me a decade ago, when I was starting my FT assignment in Chicago: exchanges and market structures.

I owe John a big debt of gratitude for his help in untangling for me the arcane ecosystem that was the Chicago futures exchanges, with their screaming pits, bizarre rituals and raw political intrigue. And big characters. Leo Melamed, of course. Charlie Carey, Terry Duffy (an Irish combo that was often only really complete when the two would go for steak dinners with Mayor Richard Daley). But also guys like Harold Lavender (business card: “Broker, Golfer”). And Jay Homan, a veteran of Board of Trade’s oat futures pit.

They were also days when hard-nosed business stories like the arrival of Eurex US to challenge “Fortress Chicago” could always be laced with the humour that gave the Chicago trading community its compelling human narrative. There were the wags in one of the pits who produced lapel badges saying “Life is Better Without Your Ex” – a dig at the German exchange’s attempt to renegotiate its electronic trading JV with the Board of Trade. Then there was Homan’s practical joke on the users of the “executive restrooms” at the Board of Trade. One of the few Democrats on the floor, Homan snuck up to the C-suite and replaced the toilet rolls with new ones, each sheet printed with the image of George W. Bush.

I never did hear how that went down with Charlie Carey and Bernie Dan. But the point is you don’t get bankers like that. Nor, I suspect, do you come across people like this in any other line of business. That’s what made it such a great story for a reporter. And – ever the reporter’s friend (even as he is reporter manque himself) John Lothian was always happy to take a call, asking for this or that jargon to be explained in plain English. Or for tips to be double-sourced, or to pass on tips of his own.

While it is true I’ve never known a news outlet that John doesn’t like seeing his name appear in, it is equally true that he is generous with his time, strives to be fair and doesn’t play games. He has even been prepared to expose himself to ridicule in London by wearing a kilt, in aid of Futures for Kids. These are rare qualities, and I have appreciated them very much these past 10 years. So thanks, John.

In Singapore, I will be covering many things, but I won’t be losing touch with the exchanges/market structures world, since I’ll also be building up coverage of that out of Asia, with colleagues across the region. See you out there.

Note: As Jeremy moves to his new role, he’s moving his Twitter account as well. You can now follow him @TradingJeremy, http://twitter.com/TradingJeremy

***JM: Mr. Lothian claims that this note made him blush a little, though it’s also possible that it was just an early sunburn.

++++

Options exchanges clash over rights to S&P
By Hal Weitzman in Chicago – Financial Times
Two of the US’s biggest options exchanges have become embroiled in a legal tussle in which the Chicago Board Options Exchange is attempting to fend off efforts to undermine its profitable proprietary contracts on stock indices. The CBOE and S&P Indices are seeking an injunction against the International Securities Exchange, a US options-trading venue operated by Deutsche Börse, over a new options contract that the CBOE says violates its exclusive licence with S&P.
http://jlne.ws/GQDyO5

++++

BATS Trading Error Bolsters Case for Curbs
By MICHAEL J. DE LA MERCED and BEN PROTESS – NY Times
The exchange operator BATS Global Markets styled itself as the future of stock trading — faster, more efficient — when it began in 2005. Its name stood for Better Alternative Trading System. Despite a very public setback for BATS on Friday, the future of stock trading still looks to be one dominated by rapid-fire computerized trading and a panoply of trading platforms like BATS.
http://jlne.ws/GQolBW

++++

Change at Financial Services Roundtable
Clarke Camper – Inside the Beltway
Former Texas Republican Congressman Steve Bartlett announced he will step down as CEO of the Washington-based Financial Services Roundtable at the end of the year. According to news reports, possible replacements include former Congressman Mike Oxley (the Oxley half of Sarbanes-Oxley) and CFTC Commissioner Jill Sommers.
http://jlne.ws/GQolSj

++++

Commodity market’s algorithmic challenge
By Javier Blas, Commodities Editor – Financial Times
The growing trend of increased correlation between the price of oil and commodities markets and other assets classes, including currencies, equities and bonds, is well documented. But two economists have found evidence of a rise in cases of heightened correlation over very brief periods – even as short as one second – pointing to the increased impact of algorithmic trading strategies on commodities.
http://jlne.ws/GQol4T

++++

A Long Road to Regulating Derivatives
NY Times
If there is one lesson from the financial crisis that should be indelible, it is that unregulated derivatives are prone to catastrophic failure. And yet, nearly four years after the crash, and nearly two years since the passage of the Dodd-Frank law, the multitrillion-dollar derivatives market is still dominated by a handful of big banks, and regulation is a slow work in progress.
http://jlne.ws/GQolSl

++++

“Almost Certainly MSU (making stuff up)”
Remarks by Commissioner Scott D. O’Malia at the Eighth Annual Energy Trading Conference, Bauer College Global Energy Management Institute, University of Houston
http://jlne.ws/GSV71u

++++

Tokyo-Osaka Seen as Best Bet After Exchange Deals Fail: Real M&A
Bloomberg
As stock exchange mergers crumbled from Frankfurt and New York to Singapore and Sydney, traders have become only more convinced that Japan’s plan to combine its biggest bourses is the best bet to succeed.
http://jlne.ws/GQolSs

++++

CME Group: A Bloated Board with Absurd Consequences
Frank Voisin – Seeking Alpha
CME Group Inc operates a derivatives clearinghouse as well as futures exchanges and other trading platforms covering all major asset classes. The company is the result of a 2007 merger between the Chicago Mercantile Exchange and the Chicago Board of Trade. One byproduct of this merger is that CME now operates the world’s largest futures exchange. Another consequence is that the company has an extremely bloated board of directors with more than 30 members!
http://jlne.ws/GQqBJw

++++

MarketsWiki Page of the Day
Jim Yong Kim
http://jlne.ws/GTckYx

++++

MarketsWiki Recent Updates

People

William Floersch; Anthony Saliba; Gary DeWaal; Jim Yong Kim; Joyce Selander; Bill Dudley

Companies, Organizations and Groups

Continuum; Federal Reserve Bank of Richmond; Federal Reserve Bank of Chicago; Chicago Research and Trading; Intellectual Property Exchange International; World Bank

Miscellaneous

Upcoming Events

Statistics

21,000,781 pages viewed, 6,754 articles, 138,313 edits
MarketsWiki Statistics
_______________________________________________________

Lead Stories

Bats CEO Scuttled IPO on Potential for Erratic Trading
By Nina Mehta – Bloomberg
The potential for “uncoordinated and chaotic” trading after bad code corrupted its computers spurred Bats Global Markets Inc. (BATS), the third-biggest U.S. stock exchange operator, to scuttle its initial public offering, according to the company’s chief executive officer.
http://jlne.ws/GQolSv

Alliances offer solution for exchanges
By Jeremy Grant in London – Financial Times
Exchanges will be forced to pursue alliances rather than costly cross-border mergers after the failure of four large-scale tie-ups in the past two years amid tough antitrust and political scrutiny, industry experts say.
http://jlne.ws/GQooxu

E-Mail to Corzine Said Transfer Was Not Customer Money
By BEN PROTESS and AZAM AHMED – NY Times
Jon S. Corzine, the former chief executive of MF Global, was told during the brokerage firm’s final day of business that a crucial transfer of $175 million came from the firm’s own money, not from a customer account, according to an internal e-mail.
http://jlne.ws/GQollf

MF Global’s Corzine Ordered Funds Moved to JPMorgan, Memo Says
By Phil Mattingly and Silla Brush – Bloomberg
Jon S. Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. accounts in London, according to an e-mail sent by a firm executive.
http://jlne.ws/GQolSy

MF Global’s Corzine May be Liable if Customer Risk Known
By Linda Sandler and Phil Mattingly – Bloomberg
Jon S. Corzine, MF Global Holding Ltd.’s former chief executive officer, may face potential legal liability if investigators show he knew customer money might be used when he ordered $200 million transferred to a U.K. account as his brokerage neared collapse, former prosecutors said.
http://jlne.ws/GQom8N

Fidelity, other big firms can work around BATS glitch
Reuters via Yahoo! News
Fidelity Investments declined on Sunday to say whether it will continue using an alternative, computer-driven stock exchange that suffered an embarrassing series of glitches Friday. But the mutual fund giant said it would have no problem finding other venues to handle trading after a software bug disrupted BATS Global Markets Inc market debut.
http://jlne.ws/GQollm

How to ensure stimulus today, austerity tomorrow
By Lawrence Summers – Financial Times
Economic forecasters divide into two groups. There are those who cannot know the future but think they can – and then there are those who recognise their inability to know the future. Major shifts in the economy are rarely forecast and often not fully recognised until they have been under way for some time. So judgments about the US economy have to be tentative. What can be said is that for the first time in five years a resumption of growth significantly above the economy’s potential now appears a substantial possibility. Put differently, after years when growth was more likely to surprise below expectations than above them, the risks are now very much two-sided.
http://jlne.ws/GQom8U

Caixabank shares suspended
By Victor Mallet in Madrid – Financial Times
Shares of Caixabank, the listed arm of Barcelona-based savings bank La Caixa, and of its smaller rival Banca Cívica were suspended on Monday as Caixabank prepared an all-share bid for Cívica, according to filings to the CNMV, the Spanish market regulator.
http://jlne.ws/GQollt

Federal Reserve Chairman Ben S. Bernanke At The Federal Reserve Conference On Central Banking: Before, During, And After The Crisis, Washington, D.C.
http://jlne.ws/GQom95

Statement By Treasury Secretary Tim Geithner On The U.S. Nomination Of Dr. Jim Yong Kim To Lead World Bank
http://jlne.ws/GQompi

Netherlands No Longer Belongs to Euro-Area Core, Citigroup Says
Bloomberg
The Netherlands, the fifth-largest economy in the euro region, no longer belongs to the core of the common currency and may face rising borrowing costs, said Citigroup Inc. economists including Juergen Michels.
http://jlne.ws/GQompl

A Bailout by Another Name
By GRETCHEN MORGENSON – NY Times
ED DeMARCO is a marked man. The acting director of the Federal Housing Finance Agency and overseer of Fannie Mae and Freddie Mac, Mr. DeMarco is a soft-spoken, career public servant — and under fire. In the thankless job of conservator for the loss-ridden mortgage finance giants, he has a duty to ensure that the companies operate in the best interests of the taxpayers who own them. That means working to keep a lid on the companies’ losses, which now total $183 billion.
http://jlne.ws/GQompm

Environmental Trading News

In Search of One Energy Miracle
The Wall Street Journal
What will it take to deliver affordable energy while drastically slashing carbon emissions? Bill Gates has a prescription: political courage, innovation and a lot more funding.
http://jlne.ws/H8K6bu

**RKB – Alan Murray’s Q&A with Gates and more dispatches from the 2012 ECO:nomics conference below.

Natural Gas as a Game Changer
WSJ
The boom in natural gas can change everything, say T. Boone Pickens and Edward G. Rendell. The question is, how do we fulfill that vision? How do proponents get the skeptics to buy into what Mr. Pickens and Mr. Rendell say is a huge opportunity to boost the U.S. economy without giving up on developing significant sources of renewable energy?
http://jlne.ws/GQrb2P

Energy Brokers Get Shelter From EU’s Shift to Exchanges
Bloomberg
Commodity brokers, facing a loss of business from a shift of derivatives trading onto exchanges, are seeking a reprieve under European proposals letting them maintain control of less transparent niche markets.
http://jlne.ws/GVZxnp

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Visit http://www.jlnenvironmental.com to subscribe.

Exchange & ECN News

BATS faces tough choices over IPO
By Telis Demos in New York – Financial Times
BATS Global Markets is wrestling with the problem of how to proceed with another offering following the withdrawal of its flotation last Friday.
http://jlne.ws/GQompn

BATS undone by its own technological curveball
By Telis Demos in New York – Financial Times
When BATS Global Markets was a young start-up known only within the exchange industry, it sent baseball bats to traders and journalists in the US to raise its profile. Cricket bats were later sent when it launched in the UK. But as BATS stood on the verge of becoming a public company on Friday, it served up a curveball, or googly, in the form of a broken initial public offering.
http://jlne.ws/GQoogX

BATS Chief on Friday’s Troubles: ‘My Stomach Sank’
By MICHAEL J. DE LA MERCED – NY Times
Friday morning did not go quite the way Joe Ratterman had expected. After months of planning and anticipation, BATS Global Markets would finally go public. Among the unique distinctions of the I.P.O. was that the company’s stock would be listed on its own exchange, a point of pride but also one that would require a lot of work.
http://jlne.ws/GQompr

BATS leaders disagree on new IPO for exchange
Reuters via Yahoo! News
Disagreement emerged on Sunday over the re-listing of an electronic stock exchange that suffered a high-profile crash last week, a breakdown that forced it to unwind its initial public offering of shares.
http://jlne.ws/GQompw

BATS sticks with Europe tech plan after IPO debacle
Reuters via Yahoo! News
BATS Global Markets is sticking with a plan to move its Chi-X platform, Europe’s largest share trading venue, to its own technology, after a software bug forced the exchange operator to take the embarrassing step of pulling its own listing last week.
http://jlne.ws/GQompz

Chart of the day, flash-crash edition
By Felix Salmon
What you’re seeing here is the price of shares in BATS, at 11:14 this morning. The white spots are trades: there are 176 of them altogether.
http://jlne.ws/GQooh1

The Flash Crash Does Not Justify a Tobin Tax
Tim Worstall
Felix Salmon has the gory details of what actually happened in the flash crash yesterday. Yes, Apple stock got mispriced for a time, the IPO of BATS was withdrawn (not all that much of a surprise really. Revealing that a problem in your trading system will crash the price of the world’s most valuable company right on the day of your IPO will tend to do that).
http://jlne.ws/GQooh4

BATS BZX Exchange Post-Mortem
Press Release
http://jlne.ws/GQompA

BATS Global Markets Withdraws Initial Public Offering
Press Release
http://jlne.ws/GQooh7

How The BATS Trades Get Unwound
Wall Street Journal Blogs
BATS Global Markets, like other exchanges, sends its trade records throughout the day to the National Securities Clearing Corp., a spokeswoman tells Dow Jones.
http://jlne.ws/GQomFX

BATS Goes Full Court Press to Try and Explain Friday
Wall Street Journal Blogs
BATS Global Markets is taking the storied Johnson & Johnson crisis communications response to its debacle of an IPO attempt on Friday.
http://jlne.ws/GQoohc

NER 300 sales strengthened by EIB membership of EEX and ICE
The European Investment Bank has become a member of the European Energy Exchange, EEX and ICE Futures Europe, ICE. Admission for trading on the two exchanges will enhance sales methods by the European Investment Bank under the NER 300 programme. IT preparations are complete and on exchange emission allowance sales are expected to begin in the coming days.
http://jlne.ws/GQomG2

CBOE and S&P Indices Take Action to Enforce Injunction Against ISE Regarding S&P 500 Index Options
The Chicago Board Options Exchange (CBOE) and The McGraw-Hill Companies, Inc. and its S&P Indices business (“S&P”) today announced that they have asked a court in Chicago to enforce the injunction against the International Securities Exchange, LLC (ISE) to prohibit it from listing and trading options on what ISE has called the ISE Max SPY index. S&P is the developer and publisher of the S&P 500 index and exclusively licenses CBOE and C2 Options Exchange (C2) to list and trade options based on the S&P 500.
http://jlne.ws/GQooxw

Buenos Aires Futures and Options Exchange (MATba) And Uruguay’s Stock Exchange (BVM) To Create A New Derivatives Market
Press Release
Mercado a Término de Buenos Aires – MATba (Buenos Aires Futures and Options Exchange) and Bolsa de Valores de Montevideo- BVM (Uruguay’s Stock Exchange) announced that they will create a Futures and Options Exchange in Uruguay.
http://jlne.ws/GQomG5

Borsa Italiana To Host Job Finance Day – Event Facilitates Meetings Between Top Finance Firms And Graduates And Young Professionals
Press Release
On the 2nd April 2012 Borsa Italiana will be hosting its 11th annual ‘Job Finance Day’ at its headquarters in Palazzo Mezzanotte, Milan. The full day event helps to facilitate meetings between graduates and young professionals and high profile companies operating in the financial, banking and insurance sectors.
http://jlne.ws/GQomG6

CME Clearing – New Product Advisory
NY ULSD (Argus) vs. Heating Oil Spread Balmo Swap Futures
http://jlne.ws/GQooxA

CME Clearing – New Product Advisory
MGEX-CBOT Wheat Spread Options
http://jlne.ws/GQomG7

CME Clearing – Performance Bonds / Margins
Performance Bond Requirements: New CBT Products- Effective Monday, March 26, 2012
http://jlne.ws/GQomWp

[CBOE] Trader E-News
http://jlne.ws/GQooxG

CBOE, C2, CFE, And CBSX Trading Schedule For Good Friday
http://jlne.ws/GQooxI

NASDAQ OMX Tallinn stock exchange calendar week 13/2012
http://jlne.ws/GQomWv

NASDAQ OMX Riga calendar week 13/2012
http://jlne.ws/GQooNX

TOM MTF Statistics Week 12 2012
Press Release
http://jlne.ws/GQooO1

Banks, Brokers & Dark Pools

Three to vie for top World Bank job
AFP via Yahoo! News
The World Bank announced three candidates to succeed outgoing president Robert Zoellick in the first challenge to the US monopoly of the top job in history.
http://jlne.ws/GQomWz

Quick View: Broker concerns get Getco
By Telis Demos – Financial Times
A filing posted deep within the website of Nasdaq OMX’s regulatory arm, announcing that Getco’s broker-dealer paid a fine for having inadequate risk procedures, has been pinging around email inboxes.
http://jlne.ws/GQomWA

Coutts fined for laundering violations
By Brooke Masters and Sharlene Goff – Financial Times
Coutts & Co, the private bank used by the Queen, has been fined £8.75m for failing to take required precautions against money laundering in the first case to emerge from a Financial Services Authority probe into the way banks handle accounts of overseas politicians and other high-risk customers.
http://jlne.ws/GQoncQ

Banks set to cut $1tn from balance sheets
By Daniel Schäfer in London – Financial Times
Investment banks are to shrink their balance sheets by another $1tn or up to 7 per cent globally within the next two years, says a report that foresees a shake-up of market share in the industry.
http://jlne.ws/GQop4s

Full UBS armoury at disposal of Orcel
By Patrick Jenkins, Banking Editor – Financial Times
UBS is gearing up to use its balance sheet heft to back its new co-head of investment banking as the Swiss group steps up efforts to revive its status in the market.
http://jlne.ws/GQoncT

Anger at Goldman Still Simmers
By GRETCHEN MORGENSON – NY Times
Just before the financial crisis began in September 2008, a prominent hedge fund appeared well positioned to take advantage of any turmoil in the markets. That fund, Copper River Partners, had made sizable bets months earlier against companies whose stocks it expected to suffer.
http://jlne.ws/GQop4z

Goldman Sachs’ Response to March 25, 2012 New York Times Article “Anger at Goldman Still Simmers”
Press Release
The New York Times ran a story on the failure in 2008 of the hedge fund Copper River, which used Goldman Sachs as its prime broker. The questions posed to us by the Times are presented in bold text below, followed by the responses which we provided in advance of the story’s publication.
http://jlne.ws/GQop4C

Nordea Shunning ECB Cash Gets Market Thumbs Up, CEO Says
Bloomberg
Nordea Bank AB (NDA) ‘s decision to avoid three-year loans offered by the European Central Bank is proving a winning strategy as investors reward the bank with lower borrowing costs, Chief Executive Officer Christian Clausen said.
http://jlne.ws/GQop4E

UBS Shuffles Management In Americas Brokerage – Memo
Dow Jones Newswires
UBS Wealth Management Americas, a unit of UBS AG (UBS), has shuffled the leadership ranks within the U.S. brokerage, eliminating a layer of management and shifting the roles of two key lieutenants under Americas Chief Executive Robert McCann.
http://jlne.ws/GQond9

Morgan Stanley Seeks Citigroup Stake in Joint Venture
CNBC
Morgan Stanley is interested in buying all of Citigroup’s stake in their wealth management joint venture this year, said people familiar with Morgan Stanley management’s thinking, in what could be a roughly $10 billion deal.
http://jlne.ws/GQopkY

Tashwinder Singh joins KKR India as Director
Business Wire
Kohlberg Kravis Roberts & Co. L.P. announces the appointment of Tashwinder Singh as Director of KKR India based in Mumbai. Mr. Singh joins KKR after serving over 18 years at Citigroup India.
http://jlne.ws/GQopkZ

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest.shtml

CFTC Deputy Economist Moser Leaving for American University
By Silla Brush and Matthew Leising
Jim Moser, the deputy chief economist at the U.S. Commodity Futures Trading Commission, this month will leave the agency, which is in charge of writing new rules for the global swaps market under the Dodd-Frank Act.
http://jlne.ws/GQontu

SEC Establishes New Supervisory Cooperation Arrangements with Foreign Counterparts
The Securities and Exchange Commission today announced that it has established comprehensive arrangements with the Cayman Islands Monetary Authority (CIMA) and the European Securities and Markets Authority (ESMA) as part of long-term strategy to improve the oversight of regulated entities that operate across national borders.
http://jlne.ws/GQontv

CFTC Seeks Public Comment on Request from NYPC for Order Permitting Cross Margining for Market Professionals
The Commodity Futures Trading Commission (Commission) is requesting public comment on a petition submitted by New York Portfolio Clearing, LLC (NYPC), a registered derivatives clearing organization, for an order pursuant to Section 4d(a)(2) of the Commodity Exchange Act (Act).
http://jlne.ws/GQontw

FSA enforcer exits role with credit
By Caroline Binham and Brooke Masters – Financial Times
A yellowed cutting bears the tell-tale signs of having been taped to Margaret Cole’s desk, high on the 27th floor of the Financial Services Authority’s headquarters in Canary Wharf.
http://jlne.ws/GQonty

SEC’s High-Frequency Trading Probe-Good for Traders?
CNBC
Traders should welcome the Securities and Exchange Commission’s plan to probe high-frequency trading, Themis Trading’s Joe Saluzzi said Friday.
http://jlne.ws/GQoplh

Call For Candidates For The Consultative Working Group Of The ESMA Secondary Markets Standing Committee – Deadline For Applications: 23 April 2012
http://jlne.ws/GQopBw

UK’s Financial Services Authority Publishes Final Guidance On Structured Products
http://jlne.ws/GQopBx

SEC seeks Wells Fargo securities documents
San Francisco Chronicle
The U.S. Securities and Exchange Commission asked a federal judge to force Wells Fargo to comply with subpoenas as the agency investigates the bank’s sale of almost $60 billion in residential mortgage-backed securities.
http://jlne.ws/GQontC

Ex-Lehman Broker Devlin Sentenced to Three Years’ Probation
Bloomberg
Ex- Lehman Brothers Holdings Inc. broker Matthew Devlin, who cooperated with a U.S. probe of insider trading , was sentenced to three years of probation after prosecutors cited his “noteworthy” assistance.
http://jlne.ws/GQonJS

Investments – Indexes – Managed Futures – Managed Funds

2 Market Meltdowns: BATS And TVIX
Roger Nusbaum – Seeking Alpha
First up is the meltdown of the Velocity Shares Daily 2x VIX Short Term ETN which is more commonly referred to by its symbol, which is TVIX. This is a levered ETN that tracks the futures market for the VIX index. Futures oriented products seem to have the greatest potential for “malfunctioning” one way or another.
http://jlne.ws/GQonJT

Hedge funds face higher trading costs
By Sam Jones, Hedge Fund Correspondent – Financial Times
Leading prime brokerages are preparing to hit clients with across-the-board increases in the cost of trading, which could dry up liquidity and cause niche global markets to shut down.
http://jlne.ws/GQopBE

BNY Mellon Named Best Asian Hedge Fund Administrator in 2012 Hedgeweek Awards
PR Newswire via Yahoo! Finance
BNY Mellon’s Alternative Investment Services (AIS) division received top industry recognition in the 2012 Hedgeweek Awards last week in London, winning the Best Asian Hedge Fund Administrator Award.
http://jlne.ws/GQopBI

Oppenheimer’s Institutional Equity Derivatives Team Builds Out Options Desk With 3 Senior Professionals
PR Newswire
Oppenheimer & Co. Inc., a unit of Oppenheimer Holdings, is pleased to announce that its Institutional Equity Derivatives group has hired three experienced senior professionals to expand the capabilities of its options desk.
http://jlne.ws/GQonJY

Frontier Currencies Irresistible as Naira Yields More
Bloomberg
Foreign-exchange traders, faced with lower volatility and record-low interest rates in the U.S., Europe, the U.K. and Japan, are searching for returns as far afield as Kazakhstan and Nigeria.
http://jlne.ws/GQonK1

John Paulson’s Newest Setback: A Military Coup
Business Insider
2011 was a famously rough year for hedge fund king John Paulson, and unfortunately 2012 isn’t working out so hot either. Late last year he lightened up on financials, while exposing himself further to gold.
http://jlne.ws/GQopS3

Reuters Global Mining and Metals Summit -Mar 26-29 – CEOs from world’s largest gold producers, mining giants and more discuss what’s ahead for the sector
CEOs of the world’s top gold producers Barrick Gold and Newmont, the CFO of global mining giant Rio Tinto, and more than 40 other industry leaders will visit the Reuters bureaus in New York, London, Moscow, Toronto, Johannesburg, Jakarta, Tokyo, Seoul, Rio de Janeiro and Seoul from March 26-29 to discuss the outlook for the mining and metals industry. The stories and videos from the closed on-the-record exclusive interviews at the annual Reuters Global Mining and Metals Summit will be posted online at
http://jlne.ws/GQopS4

MSCI Europe Value Source ETF launched on Xetra
http://jlne.ws/GQopS6

GaveKal Capital Surpasses $300 Million in Assets Under Management
http://jlne.ws/GQopSa

Technology News

Sunsetting Technology Regulation: Applying Moore’s Law to Washington
Forbes
In markets built largely upon binary code and governed by Moore’s Law, the pace and nature of change has become hyper-Schumpeterian: unrelenting and utterly unpredictable.
http://jlne.ws/GQonKa

Media News

tastytrade Network Fuels Expansion With Key Acquisitions
tastytrade (http://tastytrade.com), the fastest growing online financial network, today announced the acquisition of ki edit + design, a national video production and design studio, and Quiet Foundation, a Chicago web design and technology firm. With these acquisitions tastytrade will control all network production and technology infrastructure in-house, and compete directly with much larger media firms by delivering original financial content faster, to a wider audience.
http://jlne.ws/GQopSd

Trust Buster Takes Hard Line As E-Book Probe Continues
BY THOMAS CATAN – WSJ
The Justice Department’s top antitrust official says she won’t stand by quietly if companies make agreements with rivals on price, signaling a stern stance as the department conducts a high-profile probe into electronic-book publishing. Without mentioning Apple Inc. or the five publishers that are the target of the investigation, Sharis Pozen says she won’t hesitate to act against “collusive behavior at the highest levels of companies.”
http://jlne.ws/GQoo0t

Former Goldman Sachs executive seeking book deal: NY Times
Reuters via Yahoo! News
CHICAGO (Reuters) – Greg Smith, the former Goldman Sachs executive who resigned this month and condemned the investment bank in a scathing New York Times opinion column, is seeking a deal to write a book about his experience there, the newspaper reported.
http://jlne.ws/GQoq8y

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cmegroup.com/tools-information/calendars/

Asia-Pacific News

Tokyo Stock Exchange: Regarding News Reports That TOKYO AIM Will Be Dissolved
Today, some media outlets reported that Tokyo Stock Exchange (TSE) and London Stock Exchange’s joint-operation of TOKYO AIM (a market for profession investors) will be dissolved and that TSE will assume sole operations of the exchange.
http://jlne.ws/GQoq8B

Caixin Online: Will anyone play China oil futures trading game?
Market Watch
A top China market supervisor says crude-oil futures trading could be coming soon, but will anyone play the game, a Caixin Online report asks.
http://jlne.ws/GQoo0z

China Construction Bank Profit Rises 24% on Lending, Fees
Bloomberg
China Construction Bank Corp. (939) , the world’s second-largest lender by market value, posted a 24 percent profit increase in the fourth quarter as it set aside less in provisions for its growing bad debt.
http://jlne.ws/GQoq8K

Can Asian-Style Capitalism Save the West?
Time Magazine
As you can imagine, the people out here in Asia are feeling pretty good about themselves these days. And why shouldn’t they? While the U.S. and Europe struggle with debt, unemployment and sagging competitiveness, most of Asia seems to jump from strength to strength, its economies powering through the downturn with apparent ease, its companies becoming more and more prominent on the world stage
http://jlne.ws/GQoqp7

ING Puts $775 Million Thailand Bank Stake up for Sale – Sources
Insurance Journal
ING Groep NV has put its roughly $775 million stake in Thailand’s TMB Bank Pcl on the block as the bailed-out Dutch financial services group pushes ahead with Asian divestments, sources familiar with the matter told Reuters. ING, which is âE¦
http://jlne.ws/GQoqpa

HKEx: Forfeiture Of Unclaimed Final Dividend For 2005
http://jlne.ws/GQoo0E

Tokyo Stock Exchange: Regarding News Reports That TOKYO AIM Will Be Dissolved
Today, some media outlets reported that Tokyo Stock Exchange (TSE) and London Stock Exchange’s joint-operation of TOKYO AIM (a market for profession investors) will be dissolved and that TSE will assume sole operations of the exchange.
http://jlne.ws/GQoq8B

J.P. Morgan’s Asia-Pacific CEO Leaving
BY ALISON TUDOR – WSJ
http://jlne.ws/GQoo0F

Thai Bourse, SEC Support M&A To Promote Competitiveness
http://jlne.ws/GQoqpb

Hong Kong’s Securities And Futures Commission Waives Licensing Fees For Two Years
http://jlne.ws/GQoqWb

HKEx Announces Temporary Holiday Risk Management Arrangements
http://jlne.ws/GQoqWc

Osaka Securities Exchange: Revocation Of Market Maker For Nikkei 225 Mini Serial Contract Months: ABN AMRO Clearing Tokyo Co., Ltd.
http://jlne.ws/GQoqWd

Frontier Markets

Kuwait names new central bank governor
Associated Press via Yahoo! News
Kuwait is promoting the central bank’s deputy governor to the institution’s top job following the resignation of its long-serving leader last month, the finance minister announced Sunday.
http://jlne.ws/GQoqWg

While Sanguine on Myanmar, Investors Choose to Wait
CNBC
While market watchers and investors CNBC spoke to are sanguine about the resource-rich country as it emerges from half a century of isolation, they aren’t overly eager to jump in just yet.
http://jlne.ws/GQoqFD

HSBC Sells 80.1% Of HSBC Private Equity Middle East For $3.4 Million
Dow Jones
http://jlne.ws/GQoqFH

Dubai Gold & Commodities Exchange Weekly Market Commentary – March 25, 2012
http://jlne.ws/GQoqFO

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

Europe digs in for a long battle with the virus

Europe digs in for a long battle with the virus

First Read $12,791/$300,000 (4.3%) Leticia Manos, Ray Mckenzie and Nils-Robert Persson ++++ Election 2020: Tight Races Set Stage for Continued Period of Volatility By Suzanne Cosgrove - John Lothian News Here's how the presidential election 2020 is unfolding in its...

Banks roll out robots as pandemic shakes up IT plans

Banks roll out robots as pandemic shakes up IT plans

First Read $11,441/$300,000 (3.8%) Thomas F. Chlada, Earle Combs, Gerry Corcoran and Martin Mosbacher ++++ Steptoe & Johnson LLP Makes Good Use of Pandemic Time with Financial Services University Video Series By John J. Lothian Matthew Kulkin of Steptoe &...

Pin It on Pinterest

Share This Story