The CFTC is sifting through a mountain of email in its search for ISDAfix rate manipulation, hopefully at a rate of more than a few hundred a day. The head of Colombia’s stock exchange says the country’s financial markets are due for a spruce-up to attract foreign investment. In the wake of Bloomberg’s recent trouble with cross-department information sharing, competitors look into creating replacement financial chat systems.

First Read

Flexibility of Sef rules a relief for the market
William Mitting – FOW
The relief on Gary Gensler’s face was palpable at the CFTC meeting on Thursday as the vote on the rules governing Swap Execution Facilities passed by four to one. Throughout the four hour meeting where the rules were discussed and passed as part of a package of four final rule votes, the CFTC chairman joked with his colleagues, at one point acting out a voice trade with fellow commissioner Scott O’Malia, as he brought to a conclusion a major phase of the process that has come to define the challenges of implementing global derivatives reform.

**** And what did the faces of the Interdealer Brokers look like?


IP lawyers eye new patent-licensing marketplace
Jacob Hale Russell – Reuters
An electronic marketplace for licensing rights to inventions is preparing to launch in the next few weeks, a venture aimed at creating a more liquid and efficient market for intellectual property. Intellectual Property Exchange International Inc (IPXI) is the brainchild of IP services firm Ocean Tomo, which already has experimented with alternative ways to monetize IP, such as auctions in which bidders vie for patents. The new exchange aims to take a page from the playbook of stock and commodities markets by creating a for-profit system in which patent licenses can be traded.

**** IPXI has been a long time in the making, and I have followed and even advised it some over the years. And now it has its rulebook and is getting ready to launch.


MarketDelta Licenses Trading Technologies’ Entire Patent Portfolio
MarketDelta Trader LLC (MarketDelta) and Trading Technologies International, Inc. (TT) today announced they have entered into a licensing agreement under which MarketDelta will license TT’s entire patent portfolio, which includes more than 400 patents for electronic trading in financial markets.

****** That is a lot of nickels.


Customer Protections, Trading Issues Take the Stage
DTN / The Progressive Farmer
It’s been more than a year and a half since MF Global‘s collapse froze the funds of more than 30,000 customers. Most commodities customers have received nearly 90% of what was in their accounts, but the structural flaws MF Global and later Peregrine Financial Group exposed are just now being taken up by Congress. (And you thought the claims process was slow!)

***** With other “scandals” to pursue, they are going to take this up now?

***JK: Also see our still-relevant Restoring Customer Confidence series.


Quick View: NYSE’s prophetic objection
Arash Massoudi in New York –
Another high-profile flash crash and once again the market is pondering the unintended consequences of wholesale rulemaking. In this case, the New York Stock Exchange has been left wondering if it was all too predictable.

***** Who understands the equities market? Surely, it is not the SEC.


OptionMonster Holdings’ Sanjib Sahoo Awarded 2013 CIO of the Year by The Executives’ Club of Chicago, AITP, and SIM
OptionMonster Holdings, Inc. announced today that its CTO, Sanjib Sahoo, was selected as the 2013 CIO of the Year award honoree by The Executives’ Club of Chicago, the Association of Information Technology Professionals and the Society of Information Management.

***** The last award winning monster I saw was blue and furry.


GFI Group Builds Next Generation Trading Infrastructure With Violin Memory
GFI Group Inc., a leading provider of wholesale brokerage, electronic execution and trading support products for global financial markets, announced it will deploy Flash Memory Arrays from Violin Memory to increase the speed and capacity of its trading platforms across all assets classes.

***** Violin Memory is not to be confused with a Whole Tuba RAM.


The Rich Past and Uncertain Future of the NYSE
Phil Albinus – Advanced Trading
On the anniversary of its founding, the New York Stock Exchange shows signs of strength in an uncertain world.

***** The future of NYSE is to be put on ICE.


Financial markets are at risk of a ‘big data’ crash
Maureen O’Hara and David Easley –
Regulators and investors are struggling to meet the challenges posed by high-frequency trading. This ultra-fast, computerised segment of finance now accounts for most trades. HFT also contributed to the “flash crash”, the sudden, vertiginous fall in the Dow Jones Industrial Average in May 2010, according to US regulators. However, the HFT of today is very different from that of three years ago. This is because of “big data”.

***** We need the “WOPR” computer right now.


Wall Street’s Giants Try ‘Flow Monster’ Formula
Here is a glimpse at the future of finance. When Deutsche Bank AG set out to win a role on Apple Inc.’s $17 billion bond, it eschewed Wall Street’s traditional tactics. Instead of flying well-groomed bankers to Cupertino, Calif., to charm Apple’s top executives with PowerPoint presentations, Deutsche relied on iTunes.

***** A good back office is worth its weight in scrap paper, with gold paperweights on top of it.


How to Cut a Job in Italy? Wait, and Wait Some More
It took Whirlpool Corp. eight months to close its 1,000-person factory in Fort Smith, Arkansas, last year amid falling sales. In Italy, the world’s biggest appliance maker has been trying for three years to cut 500 jobs—with only partial success.

***** Job cuts are un-Italian.


Social Trading: What We Can Learn From 50 Million Trades – 50 Million Traded Positions At eToro Establishes Social Trading As An Investment Alternative
eToro, the world’s largest social investment network, has reached the major landmark of 50 million trades by its users. This number shows the success of the company’s vision of making the financial markets accessible for everyone to tra
de in a simple and transparent way.

***** OK, this one has me confused. El Toro?


Bordeaux 2012 Futures: Grab Pomerols, Mouton, Forget Rest
Elin McCoy – Bloomberg
Buying Bordeaux 2012 futures was always going to be a question of prices. Now that the majority of chateau owners have released theirs, it’s apparent they’re tone deaf to today’s market. Most prices are down less than 10 percent, nowhere near low enough.

***** Good wine, cheap wine, cheaper wine, not cheap enough wine?


CBOE, Barron’s Co-Host Symposium and Live Webcast on 40 Years of Options Innovation
The Chicago Board Options Exchange (CBOE) and Barron’s will broadcast a free, live webcast of a co-hosted symposium featuring key options industry figures discussing the 40th anniversary of CBOE and the U.S. options industry. The 90-minute webcast, broadcast live from CBOE, will begin at 4 p.m. CT on Wednesday, May 22, 2013.

***** If this 40th anniversary continues any longer, we will run into the 41st.


Technology Trends That Matter: Panel Discussion – based on the upcoming book “Architects of Electronic Trading”
W Chicago – City Center, 172 W. Adams St., Chicago
When: June 6, 2013 3:30 p.m. to 6:30 p.m.
Join Mike Persico of Anova Technologies, John Knuff of Equinix, Bernard Hosman of Eurex Exchange and Robert Walker of xCelor for a panel discussion on the latest trends in technology that are relevant for low-latency firms. You’ll hear how microwaves and FPGAs are changing the market landscape and how exchanges are integrating these technologies to enhance their offerings. Experts also will address how low-latency firms can embrace the emerging “Trading Smart” trend to gain a competitive edge. Special guest moderator, Suhit Gupta, former CTO of hedge fund Maverick Capital will frame the discussion around transformational technology and how technology gives savvy firms greater agility.

The content for the panel discussion is based on Stephanie Hammer’s book, Architects of Electronic Trading, which features interviews with a range of technology leaders that include this event’s panelists and others including Mark Gorton of Tower Research Capital, William Murphy of The Blackstone Group, W. Brennan Carley of Thomson Reuters and others.



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MarketsWiki Recent Updates


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Lead Stories

CFTC Said to Review 1 Million E-Mails in ISDAfix Investigation
Matthew Leising – Bloomberg
Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.

Colombia aims to ‘internationalize’ bourse
Colombia aims to “internationalize” its capital markets further in the coming years, attracting more foreign companies to its stock market and bring in overseas investors seeking to tap into higher yielding emerging markets, the head of the stock exchange said on Monday.

DealBook: Financial Firms Said to Be Seeking Bloomberg Alternative
New York Times
Nine Wall Street firms have been actively involved in creating an alternative to one of Bloomberg L.P.’s most widely used programs, its chat messaging network, people briefed on the effort said.

Technology chief exits Bloomberg
Tim Cave – Financial News
The chief executive of Bloomberg’s enterprise products and solutions business has left the data giant just a year after joining from rival operator NYSE Technologies, Financial News has learnt.

Former Senator to Run Wall St. Lobby Group
New York Times
The Securities Industry and Financial Markets Association announced that Judd A. Gregg, a former Republican senator from New Hampshire, would become the group’s chief executive.

MF Global trustee liquidates broker’s CME memberships
The trustee liquidating MF Global has sold a collection of the bankrupt broker’s CME Group memberships for amounts below recent selling prices, according to a list of transactions published by the exchange on Monday.

Apple tax fallout set to have global impact
Richard Waters in San Francisco and James Politi in Washington –
The clamour surrounding Apple’s tax affairs in Washington on Monday is set to reverberate around the world in the coming days, following revelations that taxpayers abroad have suffered more than those in the US from the company’s tax avoidance tactics.

Oil inquiry widens to trading houses
Javier Blas in London –
The European Commission investigation into the possible manipulation of energy price benchmarks has widened, with Brussels seeking new information from trading houses, including Glencore, following last week’s raids on oil majors.

Enron No Lesson for Traders as Price Manipulation Probed
Ben Moshinsky, Lynn Doan & Jim Brunsden – Bloomberg
Enron Corp.’s 2001 collapse revealed the extent of its manipulation of spot gas prices. Twelve years later, European Union regulators may discover energy traders never learned the lessons of the scandal.

Tip Puts Lobbyist’s Career on Hold
Mark Hayes was a Washington policy wonk on a long and steady ascent: a senior Senate health-care aide, a role writing President Barack Obama’s health-care overhaul and a spin through the revolving door to a lobby firm where he banked 20 years of contacts. A series of emails to a client was all it took to put that carefully crafted career on hold.


Finansinspektionen – Swedish Financial Supervisory Authority – New Discount Rate For Insurance

[ASIC] Essington School students get MoneySmart

Exchanges & Trading Facilities

HKEx To Introduce More Mainland-Related Futures
Hong Kong Exchanges and Clearing Limited (HKEx) plans to introduce new stock index futures and stock futures on three A-share Exchange Traded Funds (ETFs) as part of its continuing efforts to expand its suite of Mainland China-related products.

CME Halted Silver Trading 4 Times Sunday as Prices Slid 9%
Dow Jones
Exchange operator CME Group Inc. said it halted silver trading four times Sunday evening due to highly volatile markets, a spokesman told Dow Jones Newswires.

IntercontinentalExchange Announces 2013 Annual Meeting Results
IntercontinentalExchange, a leading operator of global markets and clearing houses, announced today the result of the company’s 2013 Annual Meeting of Stockholders, which was held May 17, 2013.

NASDAQ OMX And Smarsh Establish Partnership To Deliver Deeper Compliance Risk Capabilities
Smarsh, the leading provider of hosted archiving and compliance solutions for email and electronic communications, announced today at FINRA’s 2013 Annual Conference a new partnership with NASDAQ OMX to offer Smarsh archiving and compliance solutions to corporations, broker-dealers, exchanges and regulators alongside NASDAQ OMX’s SMARTS market surveillance and compliance solutions.

CBOE Holdings Files Additional Definitive Materials With Respect To 2013 Annual Meeting
In particular, the additional definitive materials note that Douglas H. Shulman has withdrawn his candidacy for election to the company’s Board of Directors at the 2013 Annual Meeting of Stockholders.

Borsa Italiana Launches Single Stock Dividend Futures On IDEM

NYSE Member Firms Report First-Quarter 2013 Results

QIWI Plc Depositary Receipts Admitted To Trading On The Moscow Exchange

Kansas City Board Of Trade Memorial Day Trading Hours – Schedule For Days Surrounding The Memorial Day Holiday

Hedge Funds & Managed Futures

BlackRock to Buy Real Estate Investment Firm
The money manager BlackRock agreed on Tuesday to buy the European and Asian real estate investment firm MGPA for an undisclosed fee. MGPA had around $12 billion in assets under management at the end of March.

Riverstone leads talks on $1bn commodities venture
Javier Blas, Commodities Editor –
US private equity group Riverstone is leading talks on an investment of as much as $1bn in a new commodities investment venture to be run by a former Deutsche Bank executive who aims to plug a funding gap left by the banks.

Performance Update EDHEC-Risk Alternative Indexes: Hedge Funds Extend Gains In April
In April, the stock markets’ winning streak extended to six months. The S&P 500, with a 1.93% return, reached an all-time high while equity implied volatility remained extremely low, with the VIX at 13.5%. High-grade bonds rebounded (Lehman Global: 0.89%, Lehman US: 0.29%), credit spreads tightened slightly (index: 0.18%) and convertible bonds recorded another impressive performance (2.33%) confirming a trend established for almost a year. Commodities suffered a crushing 4.67% loss, the worst since May 2012, led by base metals and crude oil. The dollar, finally, slid significantly (-0.98%) erasing last month’s gains.

Hedge-Fund Billionaire Uses Data Analysis to Guide Giving
The Chronicle of Philanthropy
The hedge-fund titan John Arnold and his wife, Laura, plan to spend most of their $4-billion fortune on efforts to better understand the foundation of major societal issues such as obesity, pension reform, and crime and find solutions, The Wall Street Journal writes in a profile of the couple and their giving approach.

Rich Returns From a Poor Man’s Hedge Fund
Investor fascination with hedge funds has been on full display for the past two weeks as managers filed their quarterly holding reports, known as 13Fs. Everyone wants to know what John Paulson or David Einhorn or David Tepper is loading up on and what they’re getting rid of. And yes, there’s an exchange-traded fund to feed that fascination.

Default Swaps on Junior Bank Debt Fall on ISDA Rule Speculation
The cost of credit-default swaps insuring subordinated European bank debt fell to the lowest in three years amid speculation changes to rules governing the securities will devalue existing contracts.

Altegris Macro Strategy Fund Adds Global Strategies Of 300 North Capital And Willowbridge Associates To Portfolio

Primary Capital plots first fund under new CEO
Alec Macfarlane – Financial News
Primary Capital, a UK lower mid-market buyout firm, has begun talks with existing investors about launching a fourth fund, the first under its newly appointed chief executive, according to two people familiar with the situation.

Funds Get Active Over Director Pay
Mutual-fund firms are joining activist investors in getting more aggressive over demands for change in how board members are paid at U.S. companies.

GASPARINO: Steve Cohen May Have Screwed Himself With His In-Your-Face Art Purchase
Business Insider
Back in March, hedge fund manager Steve Cohen had a huge week of exorbitant purchases , spending over $200 million on art and real estate. At the time it was seen as a real insult to investigators, who have been circling around him for awhile.

CalPERS Announces Candidates For Board Election – Random Drawing June 6 Will Determine Ballot Order

Subscription starts for DF Deutsche Forfait AG corporate bond

Banks & Brokers

Citi names new heads of mortgages, private bank, Citi Holdings
Reuters via Yahoo! News
NEW YORK – Citigroup Inc Chief Executive Michael Corbat named Jane Fraser as the new head of the bank’s mortgage business on Monday ,as current CitiMortgage CEO Sanjiv Das plans to leave the bank to pursue other opportunities, according to an internal memo.

BGC Partners Receives HSR Approval for Proposed Transaction with NASDAQ OMX
BGC Partners, Inc., a leading global brokerage company primarily servicing the wholesale financial and real estate markets, today announced that it has received regulatory approval for the proposed sale of certain assets comprising its platform for the fully electronic trading of benchmark, on-the-run US Treasuries to NASDAQ OMX Group, Inc.

Marex hires trio in latest strategy development
Suzi Ring – Financial News
Marex Spectron has boosted its team of equities brokers with three hires, according to the UK’s Financial Services Register, amid signs of a wider strategy overhaul at the commodities brokerage in recent weeks.

Morgan Stanley to sell India wealth management unit to StanChart
Reuters via Yahoo! Finance
Morgan Stanley said on Monday it has signed an agreement to sell its Indian wealth management unit to Standard Chartered. Financial terms of the deal were not disclosed.

Ex-Goldman banker Thornton steps down from HSBC board
Reuters via Yahoo! News
LONDON – John Thornton, the former Goldman Sachs president who specializes in Chinese affairs, is stepping down from the board of HSBC to spend more time on his other business interests, Europe’s biggest bank said on Monday.

UBS Hires Sylvia Coutinho From HSBC for Brazil CEO
UBS AG , the biggest Swiss bank, hired Sylvia Coutinho from HSBC Holdings Plc , to be chief executive officer of its Brazilian unit.

Board at J.P. Morgan in Flux
J.P. Morgan Chase & Co. is preparing for a shake-up of its board even if every director wins re-election at Tuesday’s shareholder meeting and James Dimon keeps his dual job as chairman and chief executive.

JPMorgan, under pressure, gives polling information to investors
JPMorgan Chase & Co , under pressure from the New York Attorney General’s office, has agreed to give investors information about upcoming ballot votes, after the company that collects votes on the measures stopped giving out polling information last week.

Morgan Stanley sued in ‘pay-to-play’ retirement plan case
Reuters via Yahoo! News
Morgan Stanley has been sued by an Alabama medical laboratory that claims it steered retirement plan business to ING U.S. Inc and others in exchange for extra fees in an illegal “pay-to-play” scheme.

HSBC: John Thornton to Resign Chairmanship Of HSBC North America
Dow Jones
Banking and financial services provider HSBC Holdings PLC, said Monday that John L. Thornton has decided not to seek re-election to the board of HSBC at the Annual General Meeting on May 24, and to resign his Chairmanship of HSBC North America Holdings Inc. with effect from the same date.

R.B.S. Appoints New Chairman for Asia
New York Times
The Royal Bank of Scotland said on Monday that Donald Workman would succeed John McCormick as the executive chairman of its Asia unit, in the latest high-level management change at the bank.

Indexes & Products

Deutsche Bank to Launch Euro-Hedged ETF for Germany

Semi-Annual Changes To The NASDAQ OMX CRD Global Sustainability Index

Moscow Exchange Indices Weekly Review: May 13-17, 2013

Arrow Plans Three Active Income ETFs


SunGard Introduces New Consolidated Protegent Compliance Platform to Help Firms Efficiently Manage Regulatory Compliance
SunGard has developed the Protegent Compliance Platform, a new consolidated technology platform to help financial firms achieve competitive advantages by streamlining their regulatory compliance management.

University of Illinois at Chicago Chooses OneMarketData to Support Quantitative Finance Curriculum
OneMarketData, LLC, a leader in tick data management and analytics, today announced that the University of Illinois at Chicago’s (UIC) College of Business Administration has selected OneTick, a single solution for complex event processing (CEP) and tick data management that spans both historical and real-time market data, to support the school’s research in market microstructure and quantitative finance.
(via email)

Largest dealer on Nyse Liffe RSJ chooses Kx Systems for algo trading
Kx Systems, the leader in high-performance database and time-series analysis, confirms today that RSJ a.s. (RSJ), the biggest trader on NYSE Liffe and a large trader on other derivatives exchanges, has chosen Kx’s kdb+ to support its algorithmic trading.


CFTC Revokes Registrations of Georgia Resident Robert A. Christy and his company, Crabapple Capital Group LLC
The U.S. Commodity Futures Trading Commission (CFTC) today announced the revocation of the registrations of Robert A. Christy of Milton, Georgia, and his company, Crabapple Capital Group LLC (Crabapple) of Alpharetta, Georgia.

Environmental & Energy

Hot In My Backyard
NPR – This American Life
After years of being stuck, the national conversation on climate change finally started to shift — just a little — last year, the hottest year on record in the U.S., with Hurricane Sandy flooding the New York subway, drought devastating Midwest farms, and California and Colorado on fire. Lots of people were wondering if global warming had finally arrived, here at home. This week, stories about this new reality.

**JK – I tuned into a good part of this over the weekend. The segment, (Act Two) called “Right Man For The Job” on the former Republican Congressman Bob Inglis was particularly interesting.
***Also, please note the ACCO event, today, May 21st, which addresses climate investment. This show highlights Bill McKibben’s divestment campaign in Act Three of the show.

“If people aren’t pissed off, it ain’t working”: A chat with green billionaire Tom Steyer
Tom Steyer spent years as a wildly successful hedge fund manager, a vigorous philanthropist, and a sought-after funder of Democratic politicians, but most of that activity took place beneath the public radar.


SGX enters discussions on sale of Philippine Dealing System stake
Singapore Exchange (SGX) today said The Philippine Stock Exchange, Inc (PSE) wishes to enter discussions with SGX on the sale of its 20% stake in Philippine Dealing System Holdings Corp (PDS). SGX and PSE have signed a memorandum of agreement on the discussions. The discussions are preliminary and there is no assurance any definitive or binding agreement will result.

Tokyo Commodity Exchange Monthly Foreign Customer Trades Hit All-time High In April
The Tokyo Commodity Exchange, Inc announced today that the April 2013 monthly volume of customer trades (sell & buy) originating overseas marked all-time high with 2,244,433 contracts renewing the record made in February 2013 with 1,920,053 contracts. This volume accounts for 34.3% of total monthly trades recording the highest ratio.

Thai Listed Firms’ Post Earnings Of THB 241 Bln In Q1/2013

HKEx Announces Founding Members For Its Mainland Market Data Hub

Re-Appointments In The Monetary Authority Of Singapore Board Of Directors

Hong Kong’s Securities And Futures Commission Suspends Lam Ka Wo For Three Years

Frontier Markets

Qatar sets up $1 billion energy infrastructure fund
Reuters via Yahoo! Finance
Three Qatari state-backed entities, including the Gulf Arab nation’s acquisitive sovereign wealth fund, are setting up a $1 billion fund to invest in overseas energy infrastructure assets.

Bank Of London And The Middle East Opens First Overseas Representative Office In Dubai
Bank of London and The Middle East (BLME), the largest Islamic Bank in Europe, today announced the opening of its representative office in the Dubai International Financial Centre (DIFC).

Afghanistan’s forgotten crisis: its economy
Victor Mallet in Delhi –
As long ago as 1841, those who tried to govern Afghanistan complained about the country’s paltry income. Nearly two centuries later, those sentiments are echoed by the foreign advisers who have struggled to revive the Afghan economy since the overthrow of the Taliban government in 2001.

Resuming Same Day Trading Mechanism At Egyptian Exchange Trading Platform

Dubai Financial Market Achieves 100 % Compliance In Q1 Results Disclosure Of UAE Companies

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