John Lothian Newsletter: Commission weighs slashing FTT for repo trades; SHFE Plans to Expand Warehouse Network in Competition With LME; HKMEx’s Cheung Said to Quit Rusal Board Amid Hong Kong Inquiry

May 28, 2013

Constructors of the newly proposed financial transaction tax in Europe are backing away from an across-the-board implementation as opposition from many corners continues unabated. The Shanghai Futures Exchange opens its metals warehouses to overseas participants in a bid to take business from the LME. The head of the recently-closed Hong Kong Mercantile Exchange steps down from corporate boards and public office as irregularities at the former exchange are investigated.

First Read

Singapore cements offshore renminbi ambitions
Jeremy Grant in Singapore – FT.com
Singapore cemented its ambitions to become an offshore centre for the use of the Chinese currency as HSBC and Standard Chartered became the first banks to issue bonds denominated in renminbi, creating a new market in what are likely to be known as “Lion City” bonds.
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**** The King of the Bond Jungle.

++++

LME appoints Nick Ong-Seng as Executive Director: Regulation and Compliance
The London Metal Exchange (LME) is pleased to announce the appointment of Nick Ong-Seng as Executive Director: Regulation & Compliance. Nick will replace Diarmuid O’Hegarty, whose new position as Chief Operating Officer will come into effect on Nick’s arrival in August.
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***** Got that, NOS replaces DOH?

++++

Nobody wants to be in charge of spending $500 billion in China’s sovereign wealth fund
Quartz via Yahoo! Finance
Running China’s main sovereign wealth fund is a powerful job that a series of powerful leaders and executives don’t seem to want. The chairman’s position has been left open at the China Investment Corporation since Lou Jiwei left in March to become China’s finance minister.
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***** Sounds like a “don’t lose your head” position.

++++

President wants to merge Prague and Warsaw stock exchanges
Prague Monitor
Czech President Milos Zeman came out in favour of the merger of the Prague and Warsaw stock exchanges into one institution seated Warsaw, adding that a “Central European stock exchange” would be a stronger counter-player of the other exchanges, at a Polish-Czech economic forum Friday.
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***** Consolidation takes Central European turn.

++++

Time to get comfortable with SEFs
Mark Brennan : Fidessa // Regulation Matters
The CFTC’s 29th meeting on Dodd-Frank rules, held in Washington, D.C. on May 16th, has been widely covered in the financial press. Final SEF (Swap Execution Facility) rules – including the so-called “Made Available to Trade” (MAT) rule – and minimum block sizes for swaps (among other rules) were approved by the Commission.
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****** I have a new laptop and sofa from which I trade, I call it a Sofa Execution Facility.

++++

Memorial Day thoughts on trading and happiness
MrTopStep.comBy Vikram | MrTopStep.com
Oh, the spreadsheet may say you can, but if your identity is partly tied up in your account balance, you really can’t afford it. We all make this mistake sometimes. We confuse our net worth and our self worth.
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***** I am good enough, smart enough and gosh darn it my account balance even likes me.

++++

Why Billionaires John and Laura Arnold Won’t Leave Their Kids Money
Opposing Views
Houston billionaires John and Laura Arnold have decided not to leave their staggering fortune to their three children. In October 2012, John closed his hedge fund company, Centaurus Energy, and retired after making about $4 billion in the last 10 years. Arnold, who began his career at the infamous Houston energy company Enron, wants to give the money away to support innovative ideas and solve society’s problems, reports the Wall Street Journal.
jlne.ws/10ZIRng

***** What to do with great wealth is a troubling question. Leaving it to your kids has not proved to be a great solution. The wealth I want to leave to my children is a company with a history of innovation, integrity and entrepreneurship. I want to leave them something that they can build on, giving them jobs and purpose, not a pile of cash to waste.

++++

Bring your own service: Employees want social tools at work, despite company restrictions and hesitation, reports new Microsoft survey
PR Newswire via Yahoo! Finance
Nearly half of employees report that social tools at work help increase their productivity, but more than 30 percent of companies underestimate the value of these tools and often restrict their use, according to new Microsoft research released today.
jlne.ws/10ZIRDu

***** We have the opposite issue.

++++

MarketsWiki

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jlne.ws/18cuSCY

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Lead Stories

Commission weighs slashing FTT for repo trades
Anish Puaar and Tim Cave – Financial News
The European Commission is open to slashing the levy for repurchase agreements under its proposed financial transactions tax, in one of the first signs that lawmakers are softening their stance on the controversial new rule.
jlne.ws/10ZIRDv

SHFE Plans to Expand Warehouse Network in Competition With LME
Bloomberg
The Shanghai Futures Exchange said it will open its delivery warehouse network to overseas investors while adding depots at home and abroad as competition with the London Metal Exchange intensifies.
jlne.ws/10ZIRDx

HKMEx’s Cheung Said to Quit Rusal Board Amid Hong Kong Inquiry
Yuliya Fedorinova – Bloomberg
Hong Kong Mercantile Exchange Chairman Barry Cheung resigned as a member of the board of Russian aluminum producer United Co. Rusal, which he chaired until October, because he is under police investigation, three people familiar with the situation said.
jlne.ws/10ZIRDw

Europe’s austerity-to-growth shift largely semantic
Reuters via Yahoo! Finance
To listen to some European leaders, especially in France, you would think the era of austerity was over and the euro zone was going full steam ahead to revive economic growth. In reality, the shift is more in words than deeds. The rhetoric has changed but there has been no policy U-turn.
jlne.ws/10ZIQj1

Exchanges seek to bridge derivatives divide
Anish Puaar – Financial News
The world’s exchanges are among the biggest winners to emerge from the G20’s post-crisis reform programme, which is pushing many over-the-counter transactions onto public platforms. But one issue has put them on the back foot.
jlne.ws/10ZIQj2

Julius Baer Gets Request for Data on U.S. Clients
WSJ.com
Swiss private bank Julius Baer Group AG Tuesday said it has received a request from U.S. authorities for information about American clients, a development that comes as the two countries continue to wrangle over alleged tax evasion involving accounts in the Alpine nation.
jlne.ws/10ZIQj5

Rich country investors return home for stable cash income
Reuters via Yahoo! Finance
The world’s biggest investors may be rethinking 20 years of boosting overseas holdings and are instead seeking more stable cash income at home, as aging societies and tighter regulation dull risk appetite.
jlne.ws/10ZIQj8

Watchdog says Libor Still Exposed to Manipulation
Dow Jones
Germany’s banking watchdog BaFin Tuesday warned that the process for setting the benchmark lending rates, Libor and Euribor, are still exposed to manipulation despite the introduction of certain security standards.
jlne.ws/10ZIRU0

Regulatory

SEC Refocuses on Accounting Fraud
JEAN EAGLESHAM – WSJ.com
U.S. securities regulators are turning back toward Main Street, renewing their focus on accounting fraud and other financial-disclosure failings.
jlne.ws/10ZIQjc

Nine European Associations Warn About The Negative Impact Of The Proposed FTT
jlne.ws/10ZIRU5

Exchanges & Trading Facilities

Chi-X Global To Leverage Trade Reporting Functionality In Japan
Chi-X Global Holdings LLC today announced that its subsidiary Chi-X Japan Limited plans to introduce a new service, Chi-Net, designed for cross order types. The new service is scheduled to launch in Q4 2013.
jlne.ws/10ZIQzu

Second Burgundy Dress Rehearsal Completed
On Saturday 25 May the second and final dress rehearsal (DR2) for Millennium Exchange on the Burgundy markets was conducted. A number of members and information vendors participated and Oslo Børs completed all planned activities, including a failover and recovery where the trade was resumed at the secondary data center (SDC).
jlne.ws/10ZIQzv

Hellenic Exchanges S.A. HELEX Q1 2013 Financial Results – E4.0m Net After Tax Profits
jlne.ws/10ZIRU6

Charles Li, HKEx Chief Executive, Live And Direct – Latest Charles Li Direct
jlne.ws/10ZIQzw

FESE: Call For An IPO Task Force To Be Established By The EcoFin Council
jlne.ws/10ZIRUb

Constellium lists on NYSE Euronext in New York and Paris
jlne.ws/10ZIRUc

NYSE Group Inc. Issues Short Interest Report
jlne.ws/10ZIRUg

NYSE MKT Issues Short Interest Report
jlne.ws/10ZIRUi

TOM MTF Statistics Week 21, 2013
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Hedge Funds & Managed Futures

Hedge Fund Performance Update: Dan Loeb Is Crushing It In 2013, Everyone Else – Not So Much
Zero Hedge
Just like last year, when it was the turn of Europe-focused crushed and battered hedge funds to generate outsized returns due to some brief ECB-inspired euphoria, if only for a brief period, and then promptly fall back into obscurity, so now it is the time of the “Japan” strat. As the latest HSBC hedge fund performance report confirms, the best YTD returns are, as expected, those for Japan-focused funds at least until the already fading Abenomics euphoria reverts them back to the mean.
jlne.ws/10ZIQzC

The pension gap
John Authers – FT.com
With its national parks and miles of stunning coastline, the English county of Devon has obvious attractions to pensioners. But there are less obvious attractions, too. Devon’s pension fund pays relatively little in fees to investment managers compared with other English counties – yet the performance of the fund is in line with its peers. Staffordshire’s pension fund pays more than three times as much, for a fund that is almost identical.
jlne.ws/10ZIQzE

Abu Dhabi Wealth Fund Cutting Reliance on External Fund Managers
Bloomberg
Abu Dhabi Investment Authority, among the world’s biggest sovereign wealth funds, is curbing reliance on outside fund managers and reducing holdings in developed- world shares in favor of emerging market investments.
jlne.ws/10ZISaE

Blackstone notifies Cohen’s SAC it intends to pull money: pension consultant
Reuters via Yahoo! News
By Matthew Goldstein – Billionaire hedge fund manager Steven A. Cohen is losing the financial support of Blackstone Group Inc, the largest outside investor in his embattled SAC Capital Advisors, which is yanking much of its client money, according to a letter reviewed by Reuters.
jlne.ws/10ZISaF

Morgan Stanley Said to Move Asia Hedge-Fund Event to New York
Bloomberg
Morgan Stanley will hold a gathering in New York to showcase Asian hedge funds to investors after pulling its capital introductions event in China because of the bird flu, said three people with knowledge of the matter.
jlne.ws/10ZISaH

They’re ba-ack! Private equity firms attempt to crack one of Europe’s toughest markets
Alec Macfarlane – Financial News
Almost exactly eight years on from being branded “locusts”, a host of German private equity firms are raising funds to invest in the country’s Mittlestand market.
jlne.ws/10ZIQzJ

Research finds ‘top quartile’ claims stretch the truth
Dan Dunkley – Financial News
In private equity, the phrase “top quartile” has become so commonplace it has almost lost its meaning. Two years ago, Erik Hirsch, chief investment officer at global investor Hamilton Lane, remarked that he would start a party the moment a firm admitted it was not top quartile, such is the prevalence of the phrase in day-to-day fundraising.
jlne.ws/10ZISaJ

Towers Watson stages a fund-of-funds rethink
Harriet Agnew – Financial News
Towers Watson, a critic of the fund of hedge funds industry, is planning to enter the sector, according to two people familiar with the situation.
jlne.ws/10ZIQQ1

Deutsche Bank’s Hungate to Head Cotton at Singapore Trader
Bloomberg
Nick Hungate joined RCMA Commodities Asia Pte Ltd. as global head of cotton today as the Singapore- based firm expands agricultural trading.
jlne.ws/10ZIQQ2

Hedge fund women not bashing Paul Tudor Jones for saying having babies makes women lousy traders
New York Post
Women working in the hedge-fund world know how hard it is for them to get ahead. That could explain why so few of them were willing to speak out against hedge fund legend Paul Tudor Jones, whose recent comments that having babies turns women into lousy traders kicked off a storm of controversy on Thursday.
jlne.ws/10ZISaP

EDHEC-Risk Institute And CACEIS Launch New Research Chair On Risk Assessment And Performance Reporting
CACEIS and EDHEC-Risk Institute have announced the creation of a new research chair at EDHEC-Risk Institute entitled “New Frontiers in Risk Assessment and Performance Reporting.” This new three-year chair will follow on from the previous CACEIS research chair at EDHEC-Risk Institute on “Risk and Regulation in the European Fund Management Industry.”
jlne.ws/10ZIQQ5

CFTC Commitments Of Traders Reports Update
jlne.ws/10ZIQQ7

Subscription for Rickmers Holding GmbH corporate bond
jlne.ws/10ZIQQ8

Banks & Brokers

How Mervyn King Lost the Banks Battle
WSJ.com
There was never really much doubt who would win the Great British Bank Capital War. For the past year, the U.K. banking sector has had to contend with a destabilizing campaign of regulatory innuendo.
jlne.ws/10ZISr6

Monte Paschi might not be an isolated bank case in Italy: Chairman
Reuters via Yahoo! News
BAGNAIA, Italy (Reuters) – The crisis that has hit Italy’s third-largest lender Banca Monte dei Paschi di Siena might not be an isolated case, Monte Paschi Chairman Alessandro Profumo said on Friday.
jlne.ws/10ZISr9

RBS names former regulator Pain as head of conduct
Reuters via Yahoo! Finance
State-backed British lender Royal Bank of Scotland (RBS.L) has appointed Jon Pain, a former director at the country’s financial services regulator, as its new head of conduct, it said on Monday.
jlne.ws/10ZISra

Former HSBC man Booker takes helm at Co-op Bank
Reuters via Yahoo! Finance
LONDON – Britain’s Co-operative Group has named former HSBC banker Niall Booker as the man to steer its banking arm back to health after concerns over its capital position emerged this month.
jlne.ws/10ZIQQe

RBS board has held CEO successor talks: report
Reuters via Yahoo! News
LONDON – Directors of Royal Bank of Scotland have held recent talks on identifying a replacement for its chief executive Stephen Hester, Sky News said on Sunday citing sources.
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Barclays Australia CEO Cynthia Whelan Resigns -Source
Dow Jones
Barclays Australia chief executive officer Cynthia Whelan has resigned from the bank, a person familiar with the matter said.
jlne.ws/10ZISrd

Clearing & Settlement

SGX launches depository services for RMB bonds
Singapore Exchange (SGX) today launched depository services for renminbi-denominated (RMB) bonds. This new service will support Singapore’s development as an offshore RMB hub as issuers and investors of RMB-denominated bonds coming to SGX will find a seamless and more efficient process for managing their RMB assets with the depository of such bonds at SGX. The first RMB bond deposited with SGX is the offshore RMB-denominated Senior Unsecured Notes issued by Standard Chartered PLC.
jlne.ws/10ZISre

CLSA Becomes The First Asian Broker To Go Live With Global Electronic Trade Confirmation On SWIFT
SWIFT, the financial messaging provider for more than 10,000 banking organisations, securities institutions and corporate customers in 212 countries and territories, today announced that CLSA has become the first Asian broker to go live on SWIFT’s Global Electronic Trade Confirmation (“GETC”) solution for the automation of allocation and confirmation processes.
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CME Group Clearing Advisory: FIXML 5.0 API Enhancement – Previous Executing Firm
jlne.ws/10ZITLG

CME Group Clearing Advisory: Union Registry Closure Notification for Conversion of Phase 2 Allowances to Phase Allowances and Delisting of Daily EUA Contracts
jlne.ws/10ZISri

CME Group Clearing Advisory: COMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (HX, OG, SO) Effective Tuesday, May 28, 2013
jlne.ws/10ZITLK

CME Group Clearing Advisory: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (OB, OH, I, ON) Effective Tuesday, May 28, 2013
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Indexes & Products

Athens Exchange: Capping Factors For The ATHEX Composite Index
jlne.ws/10ZITLO

The Index Committee Announces The Moscow Exchange Indices Review
jlne.ws/10ZITLQ

Moscow Exchange Indices Weekly Review: May 20-24, 2013
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TSE has published the index value of TSE Home Price Index for March.
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Technology

KPMG In Germany Selects Sungard’s Adaptiv Analytics To Help Support Assessments Of Credit Valuation Adjustments Under Basel III
KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) has chosen to use SunGard’s Adaptiv Analytics to help provide its clients with assessments of credit valuation adjustments (CVA) and to support their use of simulation-based approaches to compute derivatives exposures for internal risk steering and regulatory capital calculations.
jlne.ws/10ZISHH

OTC Markets Group And Exchange Data International Launch OTC Corporate Actions Data Service
New Service Helps Investors Mitigate Trading Risk Associated With Corporate Actions
jlne.ws/10ZISHI

Thomson Reuters Launches Elektron Managed Services In Australia In Co-Location With ASX
Thomson Reuters Elektron Managed Services To Provide Cost- Effective, Low-Latency Access To Financial Markets Data To Support Programmatic Trading Strategies In Australia
jlne.ws/10ZISHK

Fusion Media Networks Select Volta’s Great Sutton Street Data Centre To Benefit From Speed, Resilience And Connectivity
jlne.ws/10ZITLV

Haitong Futures Deploys FlexFutures Trading Platform
jlne.ws/10ZIU28

Enforcement

SEC Charges Dallas-Based Trader With Front Running
The Securities and Exchange Commission today announced fraud charges and an asset freeze against a trader at a Dallas-based investment advisory firm who improperly profited by placing his own trades before executing large block trades for firm clients that had strong potential to increase the stock’s price.
jlne.ws/13QbuZ6

FCA publishes a Decision Notice against Angela Burns deciding to ban and fine the former non-executive director £154,800 for failing to disclose her conflicts of interest
jlne.ws/10ZISHR

Court Dismisses hong Kong’s Securities And Futures Commission’s Appeal Against Fund Manager’s Acquittal
jlne.ws/10ZIU2c

Environmental & Energy

U.S. House votes to force approval of Keystone pipeline
Reuters
The House of Representatives approved a bill as expected on Wednesday declaring that a presidential permit was not needed to approve the Canada-to-Nebraska leg of the Keystone XL oil pipeline, a move that would take a decision on the project away from the Obama administration.
jlne.ws/10VhfjV

House Passes Keystone Bill as White House Vows Veto
Bloomberg
The U.S. House of Representatives passed legislation to approve the Keystone XL oil pipeline, the eighth time congressional Republicans have advanced a measure promoting the project.
jlne.ws/10OSVzf

COLUMN-Keystone XL double standard: Tale of 2 pipelines: Campbell
Reuters
A casual observer familiar with the Keystone XL saga would think the United States was making it very hard to build any oil sands-related pipelines. But nothing could be farther from the truth.
jlne.ws/11cQCFW

Asia-Pacific

Taiwan Futures Exchange Enters Into Partnership With Hanoi Stock Exchange
The Taiwan Futures Exchange (TAIFEX) and the Hanoi Stock Exchange (HNX) today signed a Memorandum of Understanding (MOU) to share information and best practices pertaining to product development, business and marketing initiatives, technology, and also in the areas of mutual interests of markets in Taiwan and Vietnam.
jlne.ws/10ZISY7

Thai Bourse Supports ASCO In Developing Small- And Medium-Cap Securities Analysis
The Stock Exchange of Thailand (SET) is adhering to the philosophy “Matching Your Right Financial Opportunities” by focusing on the expansion of quality investor base through the collaboration with the Association of Thai Securities Companies (ASCO) to work on third party database service project to provide a stock analysis information for small- and medium-cap securities that are listed under SET 101-250.
jlne.ws/10ZISY8

UK Banks Sell $245 Million Dim Sum Bonds in Singapore
FOX Business
HSBC Holdings PLC and Standard Chartered PLC issued 1.5 billion yuan of dim sum bonds in Singapore, becoming the first lenders to take advantage of the Southeast Asian country’s newly launched yuan-clearing system.
jlne.ws/10ZISYb

Japan’s Financial Services Agency Publishes An English Translation Of Briefing Materials Of 2013 Amendment Bill Of Financial Instruments And Exchange Act
jlne.ws/10ZISYc

Shenzhen Stock Exchange Market Bulletin 27 May, 2013 – Issue 2
jlne.ws/10ZIU2l

Shanghai Stock Exchange: Notice Of Taking ETFs As Underlying Securities Of Margin Trading And Securities Lending
jlne.ws/10ZIU2m

HKFE Announces Margin Rates For Adjusted PICC Futures Contracts
jlne.ws/10ZISYf

Shenzhen Stock Exchange Hosts The Capital Market Seminar For Financial Cadres In Local Governments
jlne.ws/10ZIU2r

SGX Welcomes Soilbuild Construction To Mainboard
jlne.ws/10ZIUiF

Frontier Markets

Govt policies are growth inhibitors of commodity futures
Business Line
It is over a decade since the Government allowed futures trading in commodities. In the years that have gone-by, commodity trading has grown by leaps and bounds, though there was a drop in the value of trade last fiscal. In 2012-13, the value of futures trading dropped to Rs 170 lakh crore from Rs 181 lakh crore the previous year.
jlne.ws/1425F7C

NSE to conduct mock trading on Saturday
The Economic Times
The National Stock Exchange will conduct mock trading sessions in futures & options, currency derivatives and capital segments on Saturday this week.
jlne.ws/18wa7zM

NASDAQ Dubai Plans Platform For Trading Sukuk And Bonds On-Exchange
NASDAQ Dubai, the Middle East’s international financial exchange, is preparing to open a platform on which investors can trade Sukuk (Islamic bonds) and conventional bonds.
jlne.ws/10ZIUiL

Dubai Financial Market Provides Market Participants And Employees With An “Open And Constant Platform” To Learn From The Thoughts Of HH Sheikh Mohammed Bin Rashid – Abstracts From “Flashes Of Thought” Displayed On Trading Floor Boards And HR Portal
jlne.ws/10ZISYg

Investment Prospects And Risk Take Center Stage At High-Level Forum Hosted By DIFC And MIGA
jlne.ws/10ZISYh

Nigerian Stock Exchange Weekly Report For The Week Ended May 24, 2013
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