At long last, London Stock Exchange’s increased stake in LCH.Clearnet appears clear to complete, as shareholders in both companies approve the amended deal. The Warsaw Stock Exchange, after two years of complaints from brokerages that extended hours have simply increased costs while diluting activity, will cut back its trading hours beginning next month. Australia tosses its interbank lending panel in favor of an electronic system.
Short week, slow day, and a farewell to Andy
Not many major stories today, as the world either motors quietly toward the Easter holiday, or watches the rest of the world motor quietly toward the Easter holiday. Hope everyone with time off gets a chance to find value in it; and to those who will work through the holiday, thanks for keeping the world turning. JLN will not be published tomorrow, and will resume on Monday.
A big thumbs-up and a thank you also goes out to this week’s JLN guest editor, Andy Yemma, of Intermarket Communications. It was great fun working with you, sir, and we very much appreciate your time, insights and contributions. Up next week: Veronica Augustsson, CEO of Cinnober Financial Technology. Looking forward to it!
*** AY: It’s been fun and informative guys. I like your process. Learned a great deal but promise not to use it against you! JK! (Just Kidding, not Jim Kharouf). One more shameless plug before I go: for those of you with kids taking off for a break this weekend, check out the great tips on takingthekids.com!
Moelis’ Silver Called Golden for Success Rate in Deals
Nandini Sukumar & Agnieszka Troszkiewicz – Bloomberg
When Caroline Silver helped negotiate a $2.2 billion price for the London Metal Exchange last year, she woke a moribund market for cross-border takeovers that may yield an $8.2 billion windfall for NYSE Euronext. (NYX)
*** AY: Silver turned metal into gold? Alchemy!
Quick View: ICE steps on the gas in Europe
Philip Stafford – FT.com
Away from all the attention garnered by changes to interest rate derivatives trading, US exchanges also have designs on reshaping another market: European power.
**JK: Jeff Sprecher says “More Power Scotty!”
Coffee group aims to launch 3 origin-specific futures contracts
The coffee industry said it is aiming to launch new futures contracts for higher quality beans grown in Brazil, Colombia and Vietnam, which could be active by as early as 2014.
*** AY: This is where the power is, JK (Kharouf). ICE coffee futures.
*** JK – A jolt, you might say.
*** AY: Whatever happened to Jolt Cola? Man, that was a big seller at the Merc back in the day.
Futures Now Awarded Best of the Web
Anita Liskey | OpenMarkets
Last October CNBC chartered new territory with the launch of Futures Now, the first broadcast and digital program exclusively about futures markets. Futures Now is aimed at retail traders and provides live commentary and real-time trading advice on futures markets. Now the show has been recognized for providing some of the best content on the web in any category.
Chris Ferreri of ICAP on SEFs, IDBs and the Futurization of Swaps
Chris Ferreri is a managing director at ICAP North America, where he oversees ICAP ETC, the company’s hybrid brokered OTC solution. He was the first chairman of the Wholesale Markets Brokers’ Association Americas Inc. (WMBA Americas), and served again as chairman in 2012.
Ferreri spoke with John Lothian News Editor-at-Large Doug Ashburn at the Futures Industry Association Boca 2013 conference about the CFTC’s delay in finalizing rules on swap execution facilities (SEFs), the futurization of swaps, and the future of inter-dealer brokerage. Ferreri stresses the need for voice broking services alongside electronic order books, and reminds that the migration from voice to electronic platforms is not seamless among asset classes. He also requests regulatory consistency among modes of execution. Finally, Ferreri discusses the history of innovation among IDBs and suggests that, after a period of transition to the new regulatory regime, the industry will continue to innovate and evolve.
Western funds seeks a passage to India
Ellen Kelleher – FT.com
Western fund houses with a presence in India are failing to persuade locals there to buy equity funds – an unfortunate development that throws a spanner into their business models.
**JK – SGX, with the spiffy new media page.
Flash Crash Mystery Solved
Below are portions of a comment letter submitted by R.T. Leuchtkafer to the SEC on April 16, 2010, just 3 weeks before the flash crash. The second paragraph in the excerpt below, unknowingly describes exactly how the flash crash was started. The letter goes on to alert the SEC on the dangers of High Frequency Trading (HFT), phantom liquidity and other concerns.
*** AY: In this case foresight seems to have been 20/20.
Beggar your pardon, Mr. Bernanke
Al Lewis – MarketWatch
It’s not a currency war. It’s not a race to debase. It’s not a plan to “beggar thy neighbor.” It’s a plan to “enrich thy neighbor.” This was Federal Reserve Chairman Ben Bernanke’s response on Monday to complaints that his zero-interest policies are fomenting currency wars around the globe.
MarketsWiki Page of the Day
Intellectual Property Exchange International, Inc.
MarketsWiki Recent Updates
Companies, Organizations and Groups
37,307,916 pages viewed, 7,440 articles, 156,290 edits
LSE stake in LCH gains approval
Philip Stafford – FT.com
The London Stock Exchange’s planned purchase of a controlling stake in LCH.Clearnet was approved by both sets of shareholders on Wednesday and is set to be completed after regulators raised no objection to the deal.
Warsaw Bourse to Cut Trade Hours After Brokerages Protest
The Warsaw Stock Exchange, central Europe’s biggest equity market, plans to reduce trading hours next month, backing off an expansion two years ago.
Australia Scraps Interbank Lending Panel in Wake of Libor
Australia will scrap the body that sets its interbank lending rates in favor of an electronic system in the wake of the Libor scandal, the Australian Financial Markets Association said on Thursday.
Calm Reigns in Cyprus as Banks Prepare to Open
LIZ ALDERMAN – NYTimes.com
Banks in Cyprus opened Thursday for the first time in almost two weeks, giving depositors access to their money with strict controls imposed by international lenders to prevent a bank run in the economically troubled country.
Luxembourg, Malta Stress Distance From Cyprus
MATTHEW DALTON and TOM FAIRLESS – WSJ.com
BRUSSELS—The risks posed by hosting a large financial industry became a flash point on Wednesday as the Cyprus bailout trained the spotlight on other small euro nations that depend on the sector for jobs and economic growth.
Funds Reshape Investment Mold
MATT WIRZ – WSJ.com
Hedge funds that specialize in bonds are bulking up on stocks, in the latest sign of investor concern over the health of the long bull market in debt prices.
Markets Insight: Fed must revert to tested reserves policy
Jeremy Siegel – FT.com
The financial markets shook with fear last month when the minutes of the US Federal Reserve’s meeting suggested the central bank may reconsider the costs of pumping nearly $1.7tn of excess reserves into the banking system. Of particular concern to Federal Open Market Committee members is the inflationary potential of these reserves if the banks turn them into loans and deposits.
[NFA] Public Comment on the Recommendations Regarding the Protection of Client Assets Consultation Report
We broadly support the recommended principles set out in the Report. However, we do have concerns regarding the means of implementation for Principle 5.
ESMA Chair, Steven Maijoor, Spoke At The EMIR Conference In The Hague
Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA), spoke on “EMIR: A Fair Price for Safety and Transparency”, at the EMIR conference in the Hague on 27 March 2013.
Alberta wants securities regulation to stay with provinces
Reuters via Yahoo! News
Alberta wants individual provinces to retain their authority over Canadian securities regulation, a position that makes federal attempts to create a single, national body more difficult, although Alberta is willing to make some adjustments in the current system.
Once More Through the Revolving Door for Justice’s Breuer
BEN PROTESS – NYTimes.com
Coming off a grueling four-year stint at the Justice Department, Lanny A. Breuer is poised to make a soft landing in the private sector.
Canadian Securities Regulators Seek Comment on Proposals to Modernize Investment Fund Rules
ASIC consults on trade reporting obligations for OTC derivatives
[France] The AMF approves the “Provisions” of the AFG and AFIC Code of Good Practice
UK House Of Lords Select Committee: EU Financial Transaction Tax: Financial Uphill Battle Gets Steeper
Exchanges & Trading Facilities
Cyprus bourse to remain shut amid currency controls
Reuters via Yahoo! News
NICOSIA – Cyprus’s Stock Exchange extended an almost two-week shutdown after the island placed controls on currency transactions to prevent a run on deposits when banks reopen on Thursday. The exchange will remain shut during Easter, from March 29 to April 1, because the Target2 system of interbank payments throughout the European Union would not be working, it said.
BM&FBOVESPA Wins Award For Best IR By A Latin American Company
BM&FBOVESPA has won the “IR Magazine Awards” award for Best Investor Relations (IR) by a Latin American Company in the US Market.
London Stock Exchange Group Plc (LSEG) Pre-Close Period Update For The Eleven Months Ended 28 February 2013
NZX Annual Report 2012
International Securities Exchange Good Friday Holiday
NYSE MKT Issues Short Interest Report
Moscow Exchange To Change Free Float Calculation Method
Hedge Funds & Managed Futures
If you can’t beat them, just spend
Izabella Kaminska | FT Alphaville
Gary Jenkins writing in Credit Matters this week gets to the heart of the matter when it comes to what investors should do with their money
Ex-Morgan Stanley Manager to Start Japan Long-Short Hedge Fund
Tsukasa Shimoda, a former fund manager at Morgan Stanley Asset & Investment Trust Management Co., will start a Japan-focused hedge fund amid increased appetite for the world’s second-largest equity market.
Deutsche Bank Traders Said to Join Hedge Funds as Prop Unit Shut
At least two Deutsche Bank AG debt traders left for hedge funds after the bank closed a proprietary-trading group last month to cut costs and prepare for post-crisis regulations.
Germany Loses Allure as Biggest Danish Fund Slams Financial Tax
Peter Levring – Bloomberg
Denmark’s biggest pension fund said plans by 11 European nations including Germany to introduce a financial transactions tax will make debt sold by the region’s largest economy less appealing.
Liontrust doubles management assets
Vanessa Kortekaas – FT.com
Liontrust has doubled its assets under management to £3bn in the past year, as the group benefited from a combination of inflows, market gains and an acquisition.
Kames Capital chief executive departs
Mark Cobley – Financial News
Andrew Fleming, chief executive of Scottish fund manager Kames Capital, is leaving the firm with immediate effect, it was announced yesterday. Sarah Russell, chief executive of Kames’ parent Aegon Asset Management, will oversee the firm on an interim basis while a new chief is found.
Paulson upset at being called ‘greedy’ hedge fund
Paulson & Co., the largest shareholder of MetroPCS Communications Inc. PCS, rebuked T-Mobile USA’s chief executive for his assertion this week about “greedy” hedge funds. T-Mobile Chief Executive John Legere said at a press event Tuesday that the merger of the two wireless carriers will be approved, “despite the several greedy hedge funds that are trying to take a double dip out of that process.
Natixis Global Asset Management Launches Aurora Horizons Fund
Business Wire via Yahoo! Finance
Natixis Global Asset Management announced today the launch of the Aurora Horizons Fund , which is a multi-strategy mutual fund dynamically allocated across multiple hedge fund managers.
BlackRock Buying Japan Small Firms on Bigger Free-Trade Dividend
BlackRock Inc. , the world’s No. 1 asset manager, is betting free trade will help Japan’s smaller companies outperform their larger counterparts, which will see gains taper off as the yen stabilizes.
IPOs Raise $20 Billion as Pfizer to Goldman Ride Stock Rally
Initial public offerings raised almost $20 billion globally in the first quarter, as companies from Pfizer Inc. to Goldman Sachs Group Inc. took advantage of a rally in stock markets to sell businesses.
UCB Launches Successful Bond Issue On NYSE Euronext
Banks & Brokers
DealBook: Banks Seek to Overturn Judge’s Ruling in Critical Mortgage Case
New York Times
The nation’s largest banks, facing a torrent of lawsuits over shoddy mortgage securities, are pushing to overturn a series of tough rulings in a high-stakes case filed by the Federal Housing Finance Agency in 2011.
JPMorgan Tells SEC New VaR Model Didn’t Require Prior Disclosure
JPMorgan Chase & Co. , facing criticism that it misled investors about a change to a risk model as trades backfired last year, told U.S. regulators that the bank wasn’t obligated to disclose the move until May.
JPMorgan Losing Sway as Fed Probes Pile Up
JPMorgan Chase finds itself losing its clout in Washington amid accumulating federal investigations.
JPMorgan Chase Creates New Greater China, ASEAN Head Roles
Wall Street Journal Blogs
JPMorgan Chase & Co. has created positions for a Greater China head as well as a new ASEAN head to take advantage of increased trade flows and greater cross-border client activity across the region, according to a memo seen by the Wall Street Journal on Thursday.
Credit Suisse buys Morgan Stanley’s European wealth management arm
Reuters via Yahoo! News
ZURICH – Credit Suisse will buy Morgan Stanley’s wealth management arm in Europe, the Middle East and Africa with $13 billion in assets, as it seeks to offset its exposure to more volatile investment banking.
UBS Commercial Mortgage Bond Head Cohen Said to Depart for BofA
Kenneth Cohen, the head of commercial real estate finance at UBS AG, is leaving to join Bank of America Corp. after Switzerland’s largest lender overhauled its compensation rules to limit risk.
Moynihan open to being BofA’s CEO for ‘the rest of my life’
The Charlotte Observer
Bank of America CEO Brian Moynihan told public television’s Charlie Rose that he could envision being the chief executive of the bank for the rest of his life.
Announcement By The Republic Of Cyprus Ministry Of Finance – Banks To Re-Open
Lehman Set to Pay Creditors $14.2 Billion on April 4
Lehman Brothers Holdings Inc., which is still selling assets after exiting bankruptcy last year, said it will pay $14.2 billion to creditors and affiliates on April 4.
Clearing & Settlement
Edward Hazel Of Goldman Sachs, Richard Taggart Of State Street Investment Management Services And Susan Cosgrove Of DTCC Join Omgeo Board Of Managers
Omgeo, the global standard for post-trade efficiency, today announced that Edward Hazel of Goldman Sachs, Richard Taggart of State Street’s Investment Management Services (IMS) and Susan Cosgrove of The Depository Trust & Clearing Corporation (DTCC) have joined its Board of Managers.
CME Group Clearing Advisory: Product Listing Schedule Expansion: Platinum Option (PO) and Palladium Option (PAO)- Effective Sunday, April 14, 2013
Indexes & Products
Large spike in ETF usage predicted
Chris Flood – FT.com
Two-thirds of European investors expect to increase their usage of exchange traded funds, with ETFs predicted to experience much stronger growth than competing financial instruments such as futures, index funds and total return swaps, according to the Nice-based Edhec-Risk Institute.
Tokyo Stock Exchange: New 5 ETNs To Be Listed On Apr. 19, 2013 (Fri.)- Nomura Group,
Federal Court in California Orders Victor Yu and His Company to Pay over $3.2 Million in Foreign Currency Fraud Action
The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court Order requiring Defendants Victor Yu of San Jose, Calif., and his company, VFRS, LLC (VFRS), to pay restitution of nearly $2.15 million, disgorgement of more than $270,000, and a civil monetary penalty of over $800,000
CFTC Revokes Registrations of New Jersey-based Victor E. Cilli and Progressive Investment Funds LLC
The U.S. Commodity Futures Trading Commission (CFTC) today announced the revocation of the registrations of Victor E. Cilli, formally of Hackensack, New Jersey, and his company, Progressive Investment Funds LLC (Progressive). Progressive was registered with the CFTC as a Commodity Pool Operator and Cilli was registered as an Associated Person of Progressive and listed as its sole principal.
CFTC Orders Florida Firms, Joseph Glenn Commodities LLC and JGCF LLC, and Owners Scott Newcom and Anthony Pulieri to Pay over $1 Million in Restitution and Penalties for Fraudulent Off-Exchange Transactions in Precious Metals with Retail Customers
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against two Boca Raton, Fla., companies, Joseph Glenn Commodities LLC (Joseph Glenn) and JGCF LLC (JGCF), and their sole owners and principals, Scott Newcom and Anthony Pulieri (the Respondents) for engaging in illegal, fraudulent off-exchange financed transactions in precious metals with retail customers.
Wealthy Client Wins $4.3 Million From GenSpring Over Fund
A SunTrust Banks Inc. unit that manages money for wealthy families paid $4.3 million to a client over a hedge-fund investment that declined in the 2008 financial crisis, under an arbitration award disclosed today.
SAC Seen Facing Smoother SEC Accord Approval Than Citi
SAC Capital Advisors LP may have an easier time completing a $602 million settlement with the Securities and Exchange Commission than Citigroup Inc. did in 2011, in part because it faces a different judge, according to securities lawyers.
Environmental & Energy
EU Confident on Carbon as Fix Said Likely to Win States’ Support
European Union Climate Commissioner Connie Hedegaard said she is confident that EU plans to bolster carbon prices will be enacted as policy makers realize inaction could lead to a demise of the world’s biggest carbon program.
UPDATE 1-More effort needed to meet 2020 clean energy goal -EU Commission
European Union governments must modernise their electricity grids and remove investment barriers to meet a 20 percent target for renewable energy use in 2020, the bloc’s executive said on Wednesday.
EU eyes 40 per cent carbon cuts by 2030
The European Union has today proposed a new package of carbon and renewable energy targets for2030 that could see the bloc impose a 40 per cent carbon reduction target.
China Tightening Risk Control for Rural Banks
China’s banking regulator is tightening its oversight over the country’s rural banks, imposing harsh restrictions on their lending to debt-laden local governments and exposure to risky investment products, according to an internally-circulated directive from the regulator seen by Dow Jones Newswires Thursday.
Kuroda warns Japan debt ‘not sustainable’
Ben McLannahan in Tokyo – FT.com
Japan’s central bank governor has told parliament that the government’s vast and growing debt is “not sustainable,” and that a loss of confidence in state finances could “have a very negative impact” on the entire economy.
Thai Bourse’s “Opportunity Day” Viewers Jump To Record High
The Stock Exchange of Thailand (SET) announced the success of Opportunity Day events for financial performance in 2012, which could attract a total of 90,000 viewers from webcasts, smart phones and iPads. In 2012, the number of viewers jumped by 80 percent to an all-time high from financial performance in 2011.
Thailand Futures Exchange Promotes Futures And Options Amid Bullish Market
The Thailand Futures Exchange PCL (TFEX), under The Stock Exchange of Thailand group, gears up to provide expertise to investors during time of bullish market sentiment by organizing the “TFEX Futures Day: Futures, Options Investment Festival” on March 31 to present investors with information and investment techniques covering all TFEX products.
Dalian Commodity Exchange Circular On The Adjustment Of The Minimum Trading Margin Standard And The Trading Limit Rate Of Each Variety During The Tomb-Sweeping Day Period Of 2013
Agricultural Bank Of China Inaugurates Dubai Branch
DME Announces Open Interest Record In Oman Crude Oil Futures
Open Interest for DME Oman crude oil futures was 23,429 lots yesterday, March 26. This is equivalent to over 23.4 million barrels of crude oil.
Turkey Gets Ratings Boost as S&P Plays Catch-Up
Emre Peker – Emerging Europe Real Time – WSJ
Turkey inched closer on Wednesday to snatching a second investment-grade rating that could help it attract a flood of foreign investments as Standard & Poor’s raised the country’s credit status, citing a resilient economy and political steps to end a three-decade insurgency that has stymied the country’s economic growth.
MCX-COMDEX Weekly Market Report – March 22, 2013 To March 27, 2013
Matt Nevins Joins SIFMA As Managing Director