John Lothian Newsletter: NYSE Liffe reclassifies trading positions; Nasdaq Details Plan To Strike Back At ‘Dark’ Trading; Instinet co-chief to leave amid shake-up

May 11, 2012

NYSE Liffe shuffles the data in its Commitment of Trader reports, and ruffles feathers in the process. Nasdaq OMX unveils plans for new stock services designed to take business away from dark pools. Management changes at Instinet see the departure of the company’s co-head. JPMorgan is caught with both hands on the risk bottle, as it reports super-sized, 2008-esque risk-related losses. And in the top box today (with fewer hyphens), Christine Nielsen of JLN Interest Rates provides an interview with Paul MacGregor of NYSE Liffe, who discusses the outlook for the interest rates sector, and new products at the exchange.

Observations – Statistics – Commentary

JPMorgan Reports $2 Billion Trading Loss on Synthetic Positions
By Dawn Kopecki, Michael J. Moore and Christine Harper – Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the firm suffered a $2 billion trading loss after an “egregious” failure in a unit managing risks, jeopardizing Wall Street banks’ efforts to loosen a federal ban on bets with their own money. The firm’s chief investment office, run by Ina Drew, 55, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon told analysts yesterday. Losses mounted as JPMorgan tried to mitigate transactions designed to hedge credit exposure.
http://jlne.ws/KQ5SRT

**°° There is nothing to see here, please move along.

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David Weidner’s Writing on the Wall: J.P. Morgan’s losses reveal market chaos
Market Watch
Credit-default swaps, interest-rate swaps, massive derivative hedging bets, dark pools all run by algorithms – the markets are so run amok that they are humiliating the smartest guys on Wall Street. And there is none smarter than Jamie Dimon at the top of an institution. And then there were none. J.P. Morgan Chase & Co., the last bank on Wall Street with any semblance of industry dignity for how it managed and comported itself in the financial crisis, on Thursday became the latest confidence-shaking bank on Wall Street to get waylaid by today’s financial system. It’s a system that by now is so obviously out of control that you have to wonder if we should just call off the charade of regulation.
http://jlne.ws/KQ5PWu

**** Yes, there is blood all over, but please move along.

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NYSE Amex LLC To Be Renamed NYSE MKT LLC – NYSE Amex Options Market Will Retain Its Current Name
NYSE Euronext today announced that NYSE Amex LLC, the self regulatory organization, will be renamed NYSE MKT LLC effective May 14, 2012, subject to SEC filing. NYSE MKT is the premier U.S. equities market for listing and trading of small growth companies. NYSE MKT’s associated options market will continue to do business under the name NYSE Amex Options.
http://jlne.ws/KQ5PWv

**** I would like to buy a vowel please.

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Paul MacGregor

Paul MacGregor of NYSE Liffe Discusses New Products & the Interest Rate Market Outlook
MarketsWiki.tv
NYSE Euronext continues to develop its interest rate offerings, challenging competitors in the space, such as CME Group. Paul MacGregor, executive director, head of fixed income, NYSE Liffe (the global derivatives business of NYSE Euronext) sat down recently with JLN’s Managing Editor, Christine Nielsen, to discuss the outlook for the interest rate market and new products on the horizon for the exchange.

Watch the video >

**** This interview was shot in the office of John Lothian News on the 30th floor of the Chicago Board of Trade Building on Jackson Blvd. in Chicago, or as we now call it “30 Jack.” 30 Jack Rocks!!

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LCH.Clearnet appoints Dennis McLaughlin as Group Chief Risk Officer
LCH.Clearnet Group Limited has appointed Dennis McLaughlin Group Chief Risk Officer, reporting to Ian Axe, Group CEO. The appointment is a further investment by LCH.Clearnet in enhancing its world-class risk management offering.
http://jlne.ws/KQ5QcI

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MGEX Announces Single-Click Spread Functionality Between MGEX and CBOT Wheat Contracts
MGEX, a Designated Contract Market and Derivatives Clearing Organization, today unveiled new functionality involving its Hard Red Spring Wheat (HRSW) futures contract. At the request of market participants, MGEX collaborated with the Chicago Board of Trade (CBOT) to introduce single-click trading functionality between the MGEX HRSW futures and CBOT Soft Red Winter Wheat (SRWW) futures contracts.
http://jlne.ws/KQ5SS6

**** How far is it between Chicago and Minneapolis? One click.

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May 2012 InBOX
This is the May issue of InBOX, your news source from inside the BOX Options Exchange. This monthly publication will provide convenient summaries of recent developments at BOX.
http://jlne.ws/KQ5SS8

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Oops – there goes another Black Swan
Allan D Grody – FOW
During MF Global’s debacle, the Trustee reported it transferred 10,000 commodities customer accounts representing $1.5 billion in collateral supporting three million open positions having a notional value of $100 billion. One could think small potatoes when looking at trillion dollar notional values in OTC derivatives markets. However, the Trustee went on to say this represented 40% of all commodity futures exchange activity in US markets and had they not acted swiftly it could have caused serious market disruption. While this says much about quick regulatory response it says a lot more about SIFI and Global-SIFI (G-SIFI) designations based on asset size that doesn’t yet accommodate all significant financial institutions failures.
http://jlne.ws/KQ5T8o

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Low trading volumes force Chi-East closure
By Jeremy Grant in Singapore – Financial Times
Chi-East, the first pan-Asian “dark pool” trading platform, on Thursday succumbed to persistently low trading volumes in the region after its two biggest backers, Nomura and the Singapore exchange, closed down the venture.
http://jlne.ws/KQ5QcS

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Exclusive: SEC investigator on leave after threat allegations
Reuters via Yahoo! News
The new lead investigator at the U.S. Securities and Exchange Commission‘s watchdog office has been placed on administrative leave after he talked openly about wanting to carry a concealed firearm at work and some employees complained he was a physical threat, according to people familiar with the matter.
http://jlne.ws/KQ5QcW

**** I would not want to wear a bullet proof vest if I was at the SEC, I would want a helmet for all the %^&*() falling from the sky there. What is next?

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Private Equity Explained, in a Cartoon Video
By WILLIAM ALDEN – NY Times
The 1980s are officially over, as far as private equity is concerned. The industry’s lobbying group, the Private Equity Growth Capital Council, has released an educational video portraying buyout firms as friendly business partners that give struggling companies a helping hand. Absent is any trace of the swagger that the private equity industry projected in its heyday. Instead, with animated whiteboard drawings and an upbeat soundtrack, the video makes the industry appear wholesome. In one scene, there’s even a beaming cartoon sun — with a smiley face.
http://jlne.ws/KQ5T8s

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Unpaid Internships: Bad for Students, Bad for Workers, Bad for Society
Derek Thompson | The Atlantic
The economics of unpaid internships are obvious. Employers are desperate for cheap work, and “free” is pretty cheap. Workers are desperate for, well, anything, and students and recent grads are willing to negotiate their wages down to zero. But the ethics aren’t so clear-cut.
http://jlne.ws/KVc7TV

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MarketsWiki Spring Cleaning Party - May 18
MarketsWiki Spring Cleaning Party – May 18, 2012

Join the MarketsWiki staff on Friday, May 18 as we clean up our most popular pages and take suggestions from MarketsWiki users all day.

Help us by participating in one of three ways:

(1) Help us edit – Spend some time on May 18 to help update a page. We’ll give you (and your organization) a shout out in the newsletter and on the front page of MarketsWiki during the party. Don’t have a MarketsWiki account? You can start a FREE MarketsWiki account for this event. Send Jeff Bergstrom an email to get signed up. We’ll also have help available all day for those new to wiking (or are a bit rusty).

(2) Suggest a page to clean up – Tweet your suggestion to @MarketsWiki with the #MWParty hashtag on (or before) May 18. You can also suggest a page at http://jlne.ws/MWSuggest.

(3) Spread the word – Contact colleagues that might have suggestions or want to become MarketsWiki editors. For a quick explanation of MarketsWiki, send them our short animated video: http://jlne.ws/WhatIsMW. Use the the #MWParty hashtag on Twitter to help us spread the word about our newly updated pages on May 18.

We hope you’ll join us on May 18, and remember to watch our progress by following the #MWParty hashtag on Twitter or visiting MarketsWiki.com.

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JLN Interest Rates Newsletter

U.S. Senate fails to vote on student loan interest rates
DiamondBack Online
The U.S. Senate failed to pass a bill yesterday that would keep student loan interest rates from doubling, leaving many students uncertain of their educational and financial futures. Several student leaders from University System of Maryland institutions — including Student Government Association President Sam Zwerling — and activist organizations traveled to Washington yesterday to talk to legislators and urge them to keep college affordable.
http://jlne.ws/KT5dhW

30-year mortgage rate hits record low of 3.83%
MarketWatch
Following weak jobs data and stability concerns for Europe, mortgage rates hit record lows in the week ending May 10, with the 30-year fixed-rate mortgage average ticking down to 3.83% from 3.84% in the prior week, Freddie Mac said Thursday in its weekly report. These data go back to 1971.
http://jlne.ws/IW6lGo

ISDA Said to Begin Biggest Revision to Credit Swaps Since 2009
By Matthew Leising – Bloomberg
Credit-default swaps users will meet this week in New York and London to discuss changes to the contracts in what may become the biggest revisions since 2009, according to people familiar with the situation.
http://jlne.ws/IMGsZZ

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MarketsWiki Page of the Day
Ron Grossman
http://jlne.ws/IMchNe

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MarketsWiki Recent Updates

People

Thomas Chlada; Ron Grossman; Paul MacGregor; Jay Biancamano

Companies, Organizations and Groups

NYSE Liffe; Aritas Securities

Products

Scila Surveillance; TRADExpress; TRADExpress RealTime Clearing

Miscellaneous

Upcoming Events; Five Minutes With Peter Weibel, CEO, TriReduce Division Of TriOptima

Statistics

23,226,394 pages viewed, 6,867 articles, 139,942 edits
MarketsWiki Statistics
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Lead Stories

NYSE Liffe reclassifies trading positions
By Emiko Terazono – Financial Times
The newsletter laid out changes surrounding the London-based derivatives market’s reporting on traders and investors’ buying and selling. […] The changes, which amended the classification of some accounts and altered the positions held by various players in the market, only seems to have deepened the scepticism among some participants in the London-based soft commodities market surrounding the figures.
http://jlne.ws/KQ5QcX

Nasdaq Details Plan To Strike Back At ‘Dark’ Trading
By Jacob Bunge Of DOW JONES NEWSWIRES
Nasdaq OMX Group Inc. (NDAQ) is planning a range of new stock-trading services designed to strike back at private trading platforms like “dark pools,” escalating the competition for stock orders of retail-level traders and institutional investors.
http://jlne.ws/KQ5QcZ

Instinet co-chief to leave amid shake-up
Michelle Price – Financial News
Anthony Abenante, co-chief executive of Instinet, is set to leave his role at the Nomura-owned agency brokerage following a management shake-up, according to two sources familiar with the situation.
http://jlne.ws/KQ5Qd0

DealBook: In Europe, Entry Closes on Start-Ups With Their Foot in the Door
New York Times
An unregulated offshoot of the Frankfurt Stock Exchange that gives small companies access to capital markets is closing because of fraud complaints, leaving hundreds of companies scrambling to find an alternative.
http://jlne.ws/KQ5Qti

Investors losing faith in commodity hedge funds
By Tommy Wilkes and Eric Onstad – Reuters
Investors in some of the best-known commodity hedge funds are getting increasingly frustrated by their performance, with some heading for the exit as managers rack up a second year of losses.
http://jlne.ws/K5VjgB

S&P warns of $46tn refinancing challenge
By Mary Watkins in London – Financial Times
European companies could face serious challenges refinancing a wall of maturing debt over the next few years as the region’s banks deal with the impact of regulation and fallout from the eurozone debt crisis, according to a new report from Standard & Poor’s.
http://jlne.ws/KQ5Qtl

Bank Foreign Branches Said to Face Tougher U.S. Swaps Rules
By Matthew Leising and Silla Brush
The main U.S. swaps regulator may determine how much of a bank’s foreign trading activity will be subject to regulation under the Dodd-Frank Act based on whether the firm conducts the trades from branches or affiliates, according to people familiar with the discussions.
http://jlne.ws/KQ5T8D

FDIC Outlines Plan For Financial Rescues
By Alan Zibel and Victoria McGrane, Of DOW JONES NEWSWIRES
The head of the Federal Deposit Insurance Corp on Thursday made the case that his agency is up to the task of handling the failure of a major financial firm, providing new details of how the agency would seize the parent company but allow its subsidiaries around the world to keep operating.
http://jlne.ws/KQ5T8G

EU: Signs of Recovery, Risks Remain
By FRANCES ROBINSON and VANESSA MOCK – WSJ
The European Commission said there are initial signs of a recovery in the bloc’s growth next year, although risks remain from the sovereign-debt crisis or a global increase in oil prices, the executive arm of the 27-nation bloc said Friday.
http://jlne.ws/KQ5ToY

Spain set to miss deficit target
By Alex Barker in Brussels – Financial Times
Spain will badly miss its budget deficit target for this year and next year, according to European Union forecasts released on Friday that mean Madrid will have to adopt even deeper austerity measures if it is to avoid big fines from Brussels.
http://jlne.ws/KQ5Qtt

Decoding the latest OTC derivative BIStimates
Posted by Lisa Pollack – FT Alphaville
The latest Bank of International Settlement’s over-the-counter derivatives survey came out on Wednesday. The data are available in half-yearly chunks, so this report takes us up to the end of 2011.
http://jlne.ws/KQ5QJK

Raising Oil Futures Margins May Boost Price Volatility, IEA Says
By Sherry Su – Bloomberg
Rising margin requirements in oil futures trading may increase volatility and concentrate market share in the hands of large speculators, the International Energy Agency said. CME Group Inc. (CME), the world’s largest futures exchange, is raising margins for non-hedged accounts from May 7 to comply with new regulations. Members will be treated as speculators for outright positions, paying a higher margin, the exchange said in a statement on May 2.
http://jlne.ws/IIfXAQ

ART CASHIN: These Are The Warning Signs Of Contagion
Business Insider
UBS’s Art Cashin offered his take on what contagion would look like in the eurozone if Greece is forced to abandon the euro in favor of its own currency.
http://jlne.ws/KQ5Tpc

Repression on bonds heralds masochism
Gillian Tett – Financial Times
Almost exactly a year ago, the economists Carmen Reinhart and Belén Sbrancia wrote a path-breaking International Monetary Fund paper about “financial repression”. It initially caused many western investors to blink. For while such “repression” has been extensively discussed in emerging markets in recent years, not many people in America knew what this dark-sounding phrase meant
http://jlne.ws/KQ5QJT

Environmental Trading News

California and Quebec Near an Agreement for Trading of Carbon Permits
The New York Times
California and Quebec moved to knit together their fledgling carbon markets on Wednesday as California proposed a new regulation allowing cross-border trading of the permits that industries must acquire to cover their emissions of greenhouse gases.
http://jlne.ws/JDQWJU

**RKB — Target date: November. Draft language highlights: calls for mutual acceptance of compliance instruments like allowances and offset credits between the two jurisdictions. Calls for common allowance registry and auction, including provisions for tracking allowances which are designed to enhance market security.

California takes step toward linking CO2 market to Quebec
Reuters
California on Wednesday released an updated draft of its cap-and-trade regulations that for the first time includes language that would link its carbon market to a similar scheme in the Canadian province of Quebec.
http://jlne.ws/JhBOUD

Quebec joins California in cap and trade market
SF Gate
California may not have to go it alone on cap-and-trade after all. Under rules proposed Wednesday by state regulators, the Canadian province of Quebec will link its cap-and-trade system to California’s in November. The joint market will allow businesses in both California and Quebec to trade permits to emit the greenhouse gases behind global warming.
http://jlne.ws/IXbgGX

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

Exchange & ECN News

LCH.Clearnet to appoint Magnus Spencer as Group General Counsel
LCH.Clearnet Group Limited (“LCH.Clearnet Group”) is to appoint Magnus Spencer as Group General Counsel, reporting to Ian Axe, Group CEO. Magnus will be joining LCH Clearnet’s Executive Committee and will be based in London.
http://jlne.ws/KQ5WkG

NYSE Liffe Announces First Colocation Customer From Asia
Amsterdam, Brussels, Hong Kong, Lisbon, London, Paris: Friday, 11 May 2012: NYSE Liffe, the European based derivatives business of NYSE Euronext, is pleased to announce GF Futures Co. Ltd, a Hong Kong based subsidiary of GF Group, as its first colocation customer from Asia.
http://jlne.ws/KQ5QJY

Burgundy Launches Competitive Clearing
Burgundy is pleased to announce today’s launch of a competitive clearing service which enables our customers to choose between EMCF and SIX x-clear, both leading European clearinghouses.
http://jlne.ws/KQ5WkM

Shareholder group OKs executive pay at CME
Lynne Marek – Crain’s
CME Group Inc. won Institutional Shareholder Services support for its compensation policies this year, fending off a repeat of last year’s battle over the issue.
http://jlne.ws/KQ5TFr

NZX Limited (“NZX”) Buyback/Cancellation And Share Split
http://jlne.ws/KQ5TFs

[NYSE Arca] North Atlantic Treaty Organization (NATO) Summit
The City of Chicago will be hosting the North Atlantic Treaty Organization (NATO) summit on May 20 and 21, 2012. NYSE Arca does not anticipate any interruptions to trading or operations during the summit period. Clients should use current contact information for NYSE Arca support during the summit period. NYSE Arca expects service and responsiveness to be at customary levels.

April 2012 FIF Market Share And Market Dynamics Reports – Executive Summary
http://jlne.ws/KQ5WkT

BM&FBOVESPA S.A. Announces Results For The First Quarter 2012 – Bovespa Segment’s Average Daily Trading Value Reached All-Time High
http://jlne.ws/KQ5WB8

Bucharest Stock Exchange’s Net Profit Is Up By 26% In The First Quarter Of 20121
http://jlne.ws/KQ5TFB

Senior Solution Lists On Bovespa Mais
http://jlne.ws/KQ5WBd

E.MEFF 26 – Trading Hours Extension For IBEX 35 Futures
http://jlne.ws/KQ5WBi

BM&FBOVESPA 1Q12 Financial Statements
http://jlne.ws/KQ5WBn

CNSX Markets – Victoria Day Schedule
http://jlne.ws/KQ5WBp

Program Trading Averaged 30.4 Percent Of NYSE Volume During Apr. 30-May 4
http://jlne.ws/KQ5TVZ

Banks, Brokers & Dark Pools

Jamie Dimon makes a drama out of a credit crisis
by John Gapper – Financial Times
JP Morgan’s sudden conference call to disclose, and to try to explain, the $2bn trading loss that it racked up in only six weeks was one of the most absorbing bits of live financial theatre since the 2008 crash. The star of the show, naturally, was Jamie Dimon, the bank’s ebullient and outspoken chief executive, who has been out in front leading the industry’s defence of “too big too fail” banks and pushing back against new capital requirements. Oops.
http://jlne.ws/KQ5TW5

Others in the Spotlight After JPMorgan’s Big Trading Loss
By MICHAEL J. DE LA MERCED – NY Times
Almost immediately after JPMorgan Chase disclosed that a trading group had suffered a “significant” loss because of complex credit investments, analysts and investors began pondering which executives might come under fire.
http://jlne.ws/KQ5TW6

JPMorgan Chase: London whale swallows $2B
CBS News
Jill Schlesinger: How can a $2B trading loss occur? The answer: JPMorgan Chase blew it
http://jlne.ws/KQ5WRI

JPMorgan faces backlash over ties to Sudan
By Hibah Yousuf – CNNMoneyInvest
For the second year in a row, JPMorgan Chase is recommending shareholders vote against a proposal calling for the bank to stop investing in companies that “substantially contribute to genocide or crimes against humanity.”
http://jlne.ws/M3sOCh

Deutsche Bank to settle mortgage suit for $202 mln
Market Watch
Deutsche Bank will pay $202.3 million to settle a civil fraud lawsuit with the U.S. government in connection with misconduct by its subsidiary Mortgageit in handling mortgages, the Department of Housing and Urban Development said in a statement on Thursday.
http://jlne.ws/KQ5WRM

Greek exposure hits Crédit Agricole
By Scheherazade Daneshkhu in Paris – Financial Times
Crédit Agricole reported a 75 per cent fall in first quarter net profits after taking another hit from its exposure to Greece through Emporiki, its lossmaking Greek bank.
http://jlne.ws/KQ5TWc

Investment banks await ratings verdict
By Tom Braithwaite and Tracy Alloway – Financial Times
The investment banks are on trial. For the past 12 weeks the titans of Wall Street have been pleading their case to a modest bunch of analysts from Moody’s Investors Service.
http://jlne.ws/KQ5Ucu

If downgraded, Goldman could be on hook for $2.2B
Associated Press via Yahoo! News
Goldman Sachs could owe up to $2.21 billion on its derivatives deals if its credit rating is downgraded by two notches, the company said in a regulatory filing Thursday.
http://jlne.ws/KQ5Ucz

Goldman moves to pre-empt Volcker
By Tracy Alloway in New York – Financial Times
Goldman Sachs has begun shedding some of its investments ahead of upcoming rules that will limit banks’ ability to keep money in hedge funds and private equity.
http://jlne.ws/KQ5UcD

UBS Hires J.P. Morgan Real Estate Banker
Wall Street Journal Blogs
UBS has hired a new top banker in its real-estate, leisure and lodging investment banking unit, according to an internal memo.
http://jlne.ws/KQ5X8k

Morgan Stanley Weighs Derivative Options As It Awaits Moody’s Action
By Brett Philbin, Of DOW JONES NEWSWIRES
As a potential credit-rating downgrade draws closer, Morgan Stanley (MS) Chairman and Chief Executive James Gorman may have a few cards up his sleeve, but Wall Street isn’t sure if it’s a good hand.
http://jlne.ws/KQ5UsZ

E*TRADE Financial Corporation Announces Results of Annual Meeting of Stockholders
http://jlne.ws/KQ5XoI

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

US swaps regulator delays block trading rule
By Telis Demos in New York – Financial Times
The US futures and swaps market regulator has responded to concerns expressed by exchanges, delaying a proposed rule that would have limited block trading and forced some contracts to be delisted. The Commodity Futures Trading Commission’s rule, known as core principle nine, would have required that at least 85 per cent of a listed future or swap’s volume to be traded in small lots on an exchange’s floor or electronic order book, rather than in large blocks outside the exchange.
http://jlne.ws/KQ5XoN

CFTC Proposes Order Amending the Effective Date for Swap Regulation Order Issued on July 14, 2011
The Commodity Futures Trading Commission (CFTC) today voted to propose an Order regarding the effective date for swap regulation. The Order is a six-month extension from certain provisions of the Commodity Exchange Act that otherwise would have taken effect on July 16, 2011, the general effective date of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act . Today’s order further narrows the scope of the Order because some rules, for example the further definition of swap dealer and major swap participant, have become effective.
http://jlne.ws/KQ5XoR

Open Commission Meeting For Consideration Of Rules Implementing The Dodd-Frank Act – CFTC Chairman Gary Gensler
http://jlne.ws/KQ5Utg

Statement On The Proposed Exemptive Order Regarding Certain Dodd-Frank Effective Dates – CFTC Chairman Gary Gensler
http://jlne.ws/KQ5Uth

Concurrence Statement On The Amendment To The July 17, 2011 Exemptive Order – CFTC Commissioner Scott D. O’Malia
http://jlne.ws/KQ5UJu

CFTC Commissioner Jill Sommers Opening Statement Regarding The Twelfth Open Meeting To Consider Final Rules Pursuant To The Dodd-Frank Act
http://jlne.ws/KQ5XFg

“Lettuce Produce” Statement Of Commissioner Bart Chilton At The CFTC Public Meeting On Dodd/Frank Rulemaking, Washington, Dc
http://jlne.ws/KQ5XFh

Opening Statement On CFTC Open Meeting Regarding Core Principles And Other Requirements For Designated Contract Markets – CFTC Commissioner Mark P. Wetjen
http://jlne.ws/KQ5XFp

Opening Statement, Open Meeting To Consider One Final Rule On Core Principles And Other Requirements For Designated Contract Markets – CFTC Commissioner Scott D. O’Malia
http://jlne.ws/KQ5V03

Group Disputes FINRA’s SRO Cost Estimates
Financial Planning.com
FINRA is substantially underestimating the costs to set up a self-regulatory organization for investment advisors, according to a review by the Boston Consulting Group commissioned by the Certified Financial Planner’s Board.
http://jlne.ws/KQ5V08

Two Stock Promoters, a Stock Trader, and a Securities Lawyer Sentenced to Prison for Their Roles in a $7 Million Fraudulent Stock Manipulation Scheme
U.S. District Judge Richard W. Goldberg in Miami sentenced Michael Krome, 50, a securities attorney from New York, to 34 months in prison. Stock promoters Timothy Barham Jr., 44, of Tennessee; and Robert Weidenbaum, 46, of Miami, were sentenced by Judge Goldberg to 30 months and 26 months in prison, respectively.
http://jlne.ws/JlCXXo

SEC Charges Scotland-Based Firm for Improperly Boosting Hedge Fund Client at Expense of U.S. Fund Investors
The Securities and Exchange Commission today charged a Scotland-based fund management group for fraudulently using one of its U.S. fund clients to rescue another client, a China-focused hedge fund struggling in the midst of the global financial crisis.
http://jlne.ws/KQ5XVP

FSA Fines Martin Currie £3.5 Million For Failing To Manage A Conflict Of Interests Between Clients
http://jlne.ws/KQ5V0f

Financial Stability Board: Formation Of The Enhanced Disclosure Task Force
http://jlne.ws/KQ5V0j

deVere Group Comes Out In Support Of Increased Industry Scrutiny By UK’s Financial Services Authority
http://jlne.ws/KQ5Ycf

Martin Wheatley addresses the Building Societies Association’s Annual Conference
Martin Wheatley, managing director of the Financial Services Authority (FSA) and CEO designate of the Financial Conduct Authority (FCA), yesterday stressed that building societies must continue to be committed to their members, and that the regulator would “treat everyone the same, big or small, bank or building society”.
http://jlne.ws/KQ5Ycg

The Draft CFTC 2012 Rulemaking Schedule
http://jlne.ws/KQ5VgC

ESMA Chair Steven Maijoor Delivers Keynote Speech To 35th European Accounting Association Annual Congress
http://jlne.ws/KQ5VgH

Call For Tender – Temporary Workers At ESMA
http://jlne.ws/KQ5VgM

[ASIC] Offers of vanilla bonds – extension of relief
http://jlne.ws/KQ5VgP

Canadian securities regulators strengthen over-the-counter rules [CSA]
http://jlne.ws/KQ5Vx8

Investments – Indexes – Managed Futures – Managed Funds

Funds dash to clearing houses for swaps
By Telis Demos and Tracy Alloway in New York – Financial Times
Big money managers are rushing towards third-party clearing of swaps trades before a possible downgrade of their bank trading partners’ credit ratings. The moves could vindicate regulators’ belief that private derivatives trades may be a source of counterparty risk.
http://jlne.ws/KQ5Ycv

Commods investors, fund managers grow less patient
By Barani Krishnan – Reuters
Three prominent commodity hedge funds have closed in the last month, signaling that both fund managers and investors are growing less patient with unspectacular returns than they were even five years ago, the head of hedge funds at European asset manager Feri said on Thursday.
http://jlne.ws/KQ5Vxc

Huge Institutional Investors Shifting Capital Allocation
CNBC
The largest institutional investors in the world are increasingly looking for investments that generate positive “contractual” cash flows, as opposed to mark-to-market paper gains, according to both panelists and attendees at the Skybridge Alternatives Investor Summit.
http://jlne.ws/KQ5YsN

Credit Suisse’s Asset Management Division Launches Credit Suisse Liquid Alternative Fund
PR Newswire via Yahoo! Finance
Credit Suisse’s Asset Management Division announced the launch of the Credit Suisse Liquid Alternative Fund. This innovative product seeks to offer access to hedge fund-like returns, with the flexibility of daily liquidity, increased transparency and 1099 tax reporting.
http://jlne.ws/KQ5YsT

Fidelity starts new Global Equity Income fund
Boston Globe
Fidelity Investments said it’s launching a new Global Equity Income fund, in an effort to provide investors a portfolio of larger, less-volatile stocks that also pay dividends.
http://jlne.ws/KQ5YsY

Deutsche Bank,Guggenheim Partners Talks Focus On Potential RREEF Sale
Dow Jones
Deutsche Bank AG (DB) said Friday that exclusive talks with Guggenheim Partners are now centering on a potential sale of RREEF, its global platform for alternative investments, such as in real estate and infrastructure, while talks on the sale of three other asset management units have ended.
http://jlne.ws/KQ5Vxl

Hedge Fund Trade of the Day: Long Portugal, Short Ireland
CNBC
One of the more unexpected ideas to emerge from the Skybridge Alternatives investor summit has been investing in bonds issued by the government of Portugal.
http://jlne.ws/KQ5YJg

Morgan Stanley bailed on hedge-fund firm: WSJ
Market Watch
In 2010, Morgan Stanley (MS) helped Zoe Cruz, the co-president pushed out of the firm three years earlier, launch a hedge fund by writing her a $20 million check and expressing willingness to pour in more money later.
http://jlne.ws/KQ5YJo

Julian Robertson On His Investment Strategy And What It Takes To Get Him To Invest In Your Fund
Business Insider
Julian Robertson started legendary hedge fund Tiger Management . He is the father of over 40 Tiger Cubs (like Chase Coleman and other uber talented hedgies). In short, he is a hedge fund king.
http://jlne.ws/KQ5VNF

European Regulation Is Forcing A Change In Direction For The Use Of Market Surveillance Tools, Says TABB Group
http://jlne.ws/KQ5YJu

Investors Say Geopolitical Concerns Will Be The Biggest Driver Of Market Performance In 2012
http://jlne.ws/KQ5YZK

SPDR ETF on Asian government bonds launched on Xetra
http://jlne.ws/KQ5VNI

Technology News

Dynegy Selects Updata Analytics for Natural Gas and Power Trading
Dynegy, a leading US power generator, has chosen to use Updata Professional, a suite of advanced analytics, on their power and natural gas trading desks.
http://jlne.ws/J3KpDR

Media News

Facebook Instagram deal delay threat
By April Dembosky in San Francisco – Financial Times
A competition probe into Facebook’s $1bn acquisition of photo-sharing service Instagram threatens to postpone the closure of the deal beyond the second quarter, the target set by the company in its initial public offering documents.
http://jlne.ws/KQ5Z01

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

China’s inflation eases, as economy slows further
Channel 8 San Diego
China’s economy is slowing further, defying hopes it may have “bottomed out,” with data for April showing sharper than expected declines in investment and industrial production.
http://jlne.ws/KQ5VNO

Challenges of new Cambodia stock exchange
CNN
I visited the Cambodian Stock Exchange (CSX) last September in the heart of Phnom Penh. It had officially “opened” a few months prior but no companies were listed yet. The trading room was filled with new desks and computer monitors, waiting for someone to power them on.
http://jlne.ws/KQ5VNR

Dalian Commodity Exchange Starts Simulation Options Trading
http://jlne.ws/KQ5W44

ISDA Japan Annual Collateral Survey 2012
http://jlne.ws/KQ5W45

Frontier Markets

MCX Weekly Market Report May 04, 2012 – May 10, 2012
http://jlne.ws/KQ5W48

Miscellaneous News

Joseph Stiglitz Talks To Alec Baldwin On The Financial Crisis, Reaganomics, And Why He Became An Economist
Business Insider via Yahoo! Finance
Alec Baldwin talked with Joseph Stiglitz on his WNYC show Here’s The Thing. Baldwin quizzed the Nobel prize winning economist and professor on the financial crisis, Reaganomics, growing up in Indiana, and what he sees in students now.
http://jlne.ws/KQ5W4c

A cautionary tale of inflation and growth
By Mark Carney – Financial Times
The financial crisis has shaken the world economy and prompted questions that strike at the heart of monetary economics. As governments, banks and households in advanced economies struggle to reduce debt, growth has plummeted. Weak growth is undermining efforts to repair balance sheets and causing more austerity. This vicious circle is creating problems for all economies.
http://jlne.ws/KQ5W4e

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