Nasdaq rolls back the tarp on a new trading platform in the hopes of matching investors to Scandinavian bonds. The CFTC votes to appeal the recent court decision rejecting its position limit proposal. Broker ICAP decides to shut down NYSE floor trading operations as it works to weather the global low-volume storm. If you haven’t already, take a look at JLN’s first video in the new Restoring Customer Confidence series, as Ron Filler of New York Law School examines how gross margining can improve the risk to customer accounts.
|Restoring Customer Confidence||More ideas»|
Regulatory Changes: A Pretty Picture For Gross Margining
The Dodd-Frank Act has addressed numerous risks in the financial markets. Ron Filler, a Professor at New York Law School, says one provision, called gross margining, could alleviate segregated customer account risk, starting in January 2013.
About the Restoring Customer Confidence video series
The Restoring Customer Confidence video series answers that question by exploring potential solutions using expert interviews and simple animations.
John Lothian News interviewed more than a dozen professionals in the industry to get their ideas and solutions. As these ideas become practice, or as new concepts are adopted by the industry, we will continue to add them to the site.
Visit the video series page on MarketsWiki.tv over the next several weeks for new ideas and solutions.
CME Group wins anti-trust regulators’ approval to buy KCBT
Tom Polansek – Reuters
CME Group has received approval ahead of schedule from U.S. anti-trust regulators to buy the Kansas City Board of Trade, although the deal is not yet finalized.
**** The winning streak continues.
Eurex clearing service gains traction
Philip Stafford in London – FT.com
The number of institutions using Eurex’s new service for clearing interest rate swaps may double by the end of the year ahead of new rules overhauling off-exchange trading.
**** The brave new world of OTC clearing is full of opportunity.
The extraterritorial application of Dodd-Frank
Philip McBride Johnson – FOW
Imposing standards beyond national borders has always been a tricky task. On the one hand, financial markets are truly global today, and what happens in Jakarta can impact London and New York in very direct (and potentially damaging) ways. On the other hand, what right does one jurisdiction have to impose its rules on another sovereign state?
**** Something about carrying a big stick.
LSE defies tough market conditions
David Oakley, Investment Correspondent – FT.com
The London Stock Exchange produced strong results on Friday as it defied tough market conditions, helped by its diversification into areas beyond its traditional equity trading business.
**** Diversification still has value.
Icap looks beyond the trade lifecycle
Tom Osborn – Financial News
The European trading and technology landscape is increasingly littered with misnomers. As Icap’s results highlighted on Wednesday, interdealer brokers no longer simply function as brokers, much as exchange operators are no longer just platforms for buying and selling shares.
Regulator fears fraud from hedge-fund ad rules
Elisse Walter, a Democratic commissioner on the Securities and Exchange Commission, has concerns about hedge fund and private equity advertising.
**** How about the hedge fund fraud that happens now behind closed doors. Bring it into the light.
If the pensions cap doesn’t fit, remove it
Mark Cobley – Financial News
When it comes to telling consumers what their savings will be worth in retirement, does the pensions industry assume too much? Well, in future they may be able to assume what they like, so long as it’s “justifiable”. The Financial Reporting Council, which has a hand in regulating such matters, has suggested abolishing the current “cap” on what pension companies can assume their rate-of-return on investments will be. Currently this is 7%.
**** Get ready for the next crisis.
Companies want Congress to ‘just fix it’
Gillian Tett – FT.com
Six months ago, a striking – if not contentious – survey on CEO views was published at a Business Council meeting of US chief executives. As Congress dances dangerously close to the edge of the fiscal cliff of planned spending cuts and tax increases, the results of that survey are worth revisiting.
**** You made the mess, you fix it.
Sandy set to speed end of paper shares
Stephen Foley in New York – FT.com
Flood damage from superstorm Sandy, which may have ruined more than a million stock certificates held in a vault in lower Manhattan, could speed up a financial industry effort to end the use of paper certificates.
**** Make them in brass.
One Of The Points Argentina Is Making To Avoid Paying A Hedge Fund Actually Means A Lot To The Global Economy
Yesterday, Argentina filed for a re-hearing of its arguments against hedge fund manager Paul Singer and other investors in its sovereign debt that neglected to restructure their debt in 2005 and 2010.
High Frequency Trader Explains the Business
Bob Pisani – CNBC
High frequency trading is a hot topic these days, but the universe of such traders is small, and there’s almost no one of consequence who is willing to talk about it. Until now.
***JM: That’s odd — I’ve been reading boxes full of wide-ranging ideas from a number of incisive and thoughtful people on both sides of the issue for several months now. I’m not sure if those people should laugh or be vaguely annoyed to suddenly find themselves labeled as “no one of consequence”… but I’m leaning towards “laugh”. Just because you missed the boat, Bob, doesn’t mean there’s no ferry service. If you know what I’m sayin’…
TradingScreen CEO Philippe Buhannic on Dodd-Frank and the Futurization of Swaps
Philippe Buhannic, Co-Founder, Chairman and CEO of TradingScreen has had his feet firmly planted at the executive level in the financial industry for many years now, including in positions as a managing director at Credit Suisse First Boston (CSFB) and as chairman and CEO of Fimat Futures USA Inc. He recently talked with JLN Managing Editor Christine Nielsen about the current environment and outlook for the industry, including an anticipation for the futurization of swaps, a topic which has garnered a good deal of attention recently as Dodd-Frank regulation starts to take hold and new ways of doing business must be built.
JLN Interest Rates
Expect More From The Fed – And Soon
The Financial Times
The minutes of the US Federal Reserve released on Wednesday are an essential read for those interested in a real time snapshot of the complexity of modern day central banking. They are also a cautionary note for all who believe that, acting on their own, today’s hyper-active central banks can engineer good economic outcomes.
Obama leaves some wiggle room on fiscal cliff
Eurozone slides back into recession
Fed Could Step Up Bond Buying in 2013: FOMC Minutes
A number of Federal Reserve officials thought the U.S. central bank would need to step up asset purchases next year to fill the gap when their Operation Twist program expires, minutes of the Fed’s October meeting showed.
MarketsWiki Page of the Day
Lisa A. Dunsky
30,781,811 pages viewed, 7,221 articles, 149,984 edits
Nasdaq Opens Danish Bond Exchange in Loan Drought: Nordic Credit
The biggest exchange operator in the Nordic region is unveiling a new platform for corporate bonds as companies look for credit and investors search for higher- yielding Scandinavian debt.
CFTC to Appeal Ruling Rejecting Dodd-Frank Trading Limits
The U.S. Commodity Futures Trading Commission will appeal a judge’s ruling that rejected efforts to curb speculative derivatives trading after the 2008 financial crisis.
ICAP closes a US trading division
Philip Stafford in London and Arash Massoudi in New York – FT.com
ICAP, the world’s largest interdealer broker, has shut its New York Stock Exchange floor trading operations in the latest sign that the slump in equity trading volumes is squeezing the brokerage industry.
U.S. Federal Reserve releases scenarios for bank stress tests
Reuters via Yahoo! Finance
The U.S. Federal Reserve released on Thursday the economic scenarios, including a hypothetical sharp slowdown in China, that the biggest banks will use in the next round of stress tests to determine how they would withstand a financial shock.
SEC says credit rating industry remains plagued by weak oversight
The Wall Street Journal
US securities regulators said in a report yesterday that the credit ratings industry remains plagued by failures in meeting its own standards, weak oversight and poor documentation of its rating decisions, despite years of heightened scrutiny after the financial crisis.
MF Global report: watchdogs need better grip on finance
Poor supervision contributed to the downfall of futures brokerage MF Global, House Republicans said in a report released Thursday, underscoring how regulators struggle to get a grip on Wall Street despite the lessons of the financial crisis.
Senate confirms Gruenberg and Hoenig as FDIC leaders
The U.S. Senate on Thursday confirmed Martin J. Gruenberg as chairman and Thomas Hoenig as vice chair of the Federal Deposit Insurance Corp. The banking agency has been without an official leader since Sheila Bair stepped down as chair in July 2011.
Spain Suicides Spark Law Risking Bank Losses: Mortgages
Spain, responding to street protests and reports of suicides linked to foreclosures, introduced rules to help protect families from eviction, increasing the risk of creditor losses and weakening an already fragile banking system.
Greece Requests Information from UK Authorities Over Offshore Accounts
Greece Thursday requested information from British authorities seeking information about Greek citizens with offshore bank accounts, as part of its efforts to crack down on tax evasions.
Merkel has decided to pay up for the euro
Philip Stephens – FT.com
The other day I heard someone say that Angela Merkel intends to fight next autumn’s German election as the chancellor who saved Europe. Those still worried about the future of the euro will be reassured by her confidence. The crowds of striking workers who took to Europe’s streets this week to protest against austerity are less likely to applaud.
CFTC Approves Position Limit Appeal
The Commodity Futures Trading Commission (CFTC) will move forward with an appeal of a federal district court’s decision vacating the position limits rule. The Commission approved the appeal on a 3-2 vote.
SEC Issues Staff Summary Report of Examinations of Nationally Recognized Statistical Rating Organizations
The Securities and Exchange Commission today issued its second annual staff report on the findings of examinations of credit rating agencies registered with the SEC as Nationally Recognized Statistical Rating Organizations (NRSROs).
SEC Receives More Than 3,000 Whistleblower Tips in FY2012
Over the past year, the Securities and Exchange Commission received more than 3,000 whistleblower tips from all 50 states and from 49 countries, according to the agency’s 2012 Annual Report on the Dodd-Frank Whistleblower Program released today.
SEC Sued, MF Global, JPMorgan Suspended: Compliance
David Weber, a former U.S. Securities and Exchange Commission internal investigator fired for allegedly carrying a firearm while on duty, sued the agency for wrongful termination.
Remarks At The Financial Stability Oversight Council Meeting By SEC Chairman Mary L. Schapiro
Remarks During News Conference About Enforcement Actions Against BP By Robert Khuzami, Director Of The SEC’s Division Of Enforcement, U.S. Securities And Exchange Commission
Remarks At The 2012 SEC Government-Business Forum On Small Business Capital Formation By Commissioner Troy A. Paredes, U.S. Securities and Exchange Commission
Effective Small Business Capital Formation Requires Investor Protection To Foster Investor Confidence By Commissioner Luis Aguilar, U.S. Securities And Exchange Commission
Industry secures AIFMD changes in UK and Germany
Paul Hodkinson – Financial News
The private equity industry has scored two key victories on how the European Union’s Alternative Investment Fund Managers Directive will be implemented in the UK and Germany.
ESMA Publishes An Update Of The List Of Waivers Under MiFID
IMF publishes the results of Australia’s Financial Sector Assessment Program
Statement for the Record of Gerri Walsh, Vice President, FINRA Investor Education, Before the Special Committee on Aging
Exchanges & Trading Facilities
London Stock Exchange Group Interim Results For The Six Months Ended 30 September 2012
Total income up 10 per cent at £423.7 million (H1 FY 2012: £386.5 million); Revenue up 7 per cent to £349.8 million (H1 FY 2012: £328.1 million); Adjusted operating profit1 up 1 per cent at £217.2 million (H1 FY 2012: £214.3 million); operating profit of £186.8 million (H1 FY 2012: £192.5 million)
The New Zealand Market (NZX) Launches NASDAQ OMX’s X-stream Trading Platform
The New Zealand Market (NZX) has launched NASDAQ OMX’s world recognized trading platform X-stream, paving the way for a new era in global connectivity and product innovation going forward.
FIF Capacity Statistics For October 2012
Vienna Stock Exchange: Austrian Day 2012 In Zurich In Collaboration With UBS
On November 20, 2012, the Vienna Stock Exchange will hold a road show in Zurich.
Program Trading Averaged 28.1 Percent of NYSE Volume during Nov. 5-9
Restrictions on Transactions in Overseas Shipholding Group, Inc. (“OSG”)
Holiday Listing Schedule for Weekly Expirations
Website Location for Information about CBOE Volatility Index Settlement
Direct Edge Trading Notice #12-55: Route Peg Order Functionality
Hedge Funds & Managed Futures
Lightspeed Muscles In On Options Market With New Platform
Justin Grant – Advanced Trading
A little more than a year after buying Greenmoor Financial Group with an eye towards getting into the options trading business, direct market access provider Lightspeed Financial is rolling out an options trading platform.
Barclays’s $3 Billion of Bonds Tumble in First Day of Trading
Barclays Plc ’s $3 billion of notes that can be written off in a crisis tumbled in their first day of trading, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
In a Switch, Investors Are Buying European Bank Bonds
MARK SCOTT – NYTimes.com
European bank debt, once an investment pariah, is suddenly popular. In recent weeks, money managers have been readily buying the new bonds of the region’s financial institutions, deals that just months ago would have seemed unpalatable.
Einhorn, Paulson Maintain Large Gold ETF Positions
International Business Times
David Einhorn and John Paulson, two of the world’s most prominent hedge fund managers, maintained their significant positions in the two largest gold ETFs during the third quarter of this year.
Man Group sells Lehman estates exposure for $456 million
Reuters via Yahoo! Finance
LONDON – Hedge fund manager Man Group on Friday said it had agreed to sell its Lehman estates exposure to Hutchinson Investors for $456 million.
USB adds to hedge fund services
Finance and Commerce
U.S. Bancorp Fund Services, LLC, a Milwaukee-based subsidiary of U.S. Bancorp, is acquiring AIS Fund Administration, which provides administration services for $25 billion in hedge fund assets.
Haddington Energy Partners Closes On $350 Million Private Equity Fund For Midstream Energy Investments
Rothstein Kass Releases “Alternative Investment Fund Pro Forma Financial Statements Manual” for 2012
Banks & Brokers
Goldman Sachs Is Facing Its Own Fiscal Cliff
There’s a lot less gold to go around. Even Goldman Sachs doesn’t seem to realize how empty the mine is where it used to dig. On Wednesday, Goldman (GS) named 70 new partners. It’s the smallest class of new firm heavyweights since Goldman went public back in 1999. The last time the firm named new partners, in 2010, 110 Goldmanites got the call. Still, at least by one metric, the new partner class is not small enough.
Goldman Names 266 Managing Directors in Annual Promotion
Goldman Sachs Group Inc. promoted 266 employees to managing director, up from 261 last year, as the fifth-biggest U.S. bank tries to reward workers even as it cuts expenses.
Goldman Sachs Announces New Managing Directors
The Goldman Sachs Group, Inc. today announced that it has selected a new class of Managing Directors, effective from January 1, 2013, the start of the firm’s next fiscal year.
JPMorgan accused of blocking California power plan
The Sacramento Bee
State electricity officials leveled a startling new accusation Thursday at JPMorgan & Chase Co., saying the investment bank is stonewalling a power-plant renovation that could be needed to keep the lights on in Southern California.
JPMorgan faces U.S. action on anti money-laundering practices: WSJ
Reuters via Yahoo! News
U.S. regulators are expected to serve a formal notice to JPMorgan Chase & Co accusing the nation’s biggest bank of having weaknesses in its anti money-laundering systems, the Wall Street Journal reported, citing people close to the situation.
Awkward Spot for Citi’s CEO
SUZANNE KAPNER – WSJ.com
For Vikram Pandit, a trip to Tokyo for the International Monetary Fund and World Bank conference last month seemed routine. But Michael Corbat, the longtime Citigroup Inc. executive who joined Mr. Pandit there, knew better.
Investment bank of the Week: Visor Capital
Giles Turner – Financial News
One local investment bank in Almaty, the capital of Kazakhstan whose name means ‘city of apples’, managed to pluck a low hanging fruit this week in the shape of a potential £500m flotation on the London Stock Exchange – by securing the role of the listing’s domestic expert.
ABN AMRO warns bad loans, bank tax to hurt fourth-quarter earnings
Reuters via Yahoo! Finance
AMSTERDAM – Dutch state-owned bank ABN AMRO warned on Friday that higher impairments on loans and a 112 million euro bank tax would hurt fourth-quarter results.
Banker’s ex-girlfriends acquitted of insider dealing
Farah Khalique – Financial News
Two women have been acquitted of insider trading after being charged with profiting from sensitive information provided by an investment banking boyfriend that they unwittingly shared.
E*Trade Adds Former Fidelity Executive Lam to its Board
E*Trade Financial Corp. named James Lam, a former chief risk officer at Fidelity Investments, to its board, the fourth new director in the past year.
Clearing & Settlement
Sixteen banks back Deutsche Boerse rates clearing launch
Luke Jeffs – Reuters
Sixteen of the world’s top banks are backing a new interest rate swap clearing service from Deutsche Boerse in an early show of support for a move by the German exchange to tap derivatives reform.
Outdated Account Practices Threaten Clearing Firms, Report Says
Gregory Bresiger – Traders Magazine
Some clearing brokers are operating in the dark, using outdated, account opening practices. That’s what industry consultant Aite Group warned in a recent report and survey, which argues that that some fully disclosed firms have been falling behind in their methods of operation since the market meltdown of 2008. Many firms, Aite Group said, have moved slowly on making the opening process electronic and integrated with other parts of the firm.
Indexes & Products
RBS Debuts 5 New Rogers Commodity ETNs
ETF Database via Yahoo! Finance
RBS made a significant expansion to its lineup of ETNs this week with the debut of five products offering exposure to commodity indexes bearing the name of legendary hard asset investor Jim Rogers.
Change in Component Issues of OSE 300 Stock Price Index, OSE 250 Adjusted Stock Price Average
The Dow Jones Credit Suisse Hedge Fund Index Finished Down 0.18% in October
Fixnetix Deploys Market Data FPGA From NovaSparks For Asperatus Capital – Systematic Hedge Fund trades With Fastest Market Data Feeds
Ovum Reveals Compliance And Risk Regulations To Drive Technology Spending In 2013
A combination of a depressed world economy and tougher regulation will make the financial markets rally to IT in order to underpin more risk-averse business strategies, according to a new report from Ovum*.
Arcontech Strengthens Sales Team With Industry Veteran Darren Simons
BP to Pay $525 Million Penalty to Settle SEC Charges of Securities Fraud During Deepwater Horizon Oil Spill
The Securities and Exchange Commission today charged BP p.l.c. with misleading investors while its Deepwater Horizon oil rig was gushing into the Gulf of Mexico by significantly understating the flow rate in multiple reports filed with the SEC.
MassMutual to Pay $1.625 Million after SEC Investigation Highlights Prior Insufficient Disclosures about Annuity Product
The Securities and Exchange Commission today charged Massachusetts Mutual Life Insurance Company with securities law violations for failing to sufficiently disclose the potential negative impact of a “cap” it placed on a complex investment product that investors were planning to use for retirement.
Ex-Needham CFO Arrested in Theft From Firm
MICHAEL ROTHFELD AND CHAD BRAY – WSJ.com
As chief financial officer at Needham & Co., Glen W. Albanese worked on the brokerage firm’s charitable efforts after Hurricane Katrina and its scholarship fund for children of victims of the 2001 terrorist attacks. Now, federal authorities have accused him of directing money to a different cause: himself.
Investment banker guilty of insider dealing
In a prosecution brought by the Financial Services Authority (FSA) Thomas Ammann has pleaded guilty to two counts of insider dealing and two counts of encouraging insider dealing. Ammann will be sentenced on a date to be confirmed.
[ASIC] Former Hogan and Partners stockbroker pleads guilty to charges in Perth
Environmental & Energy
Brazil calls for delay in talks to cut emissions
The debate on whether the world needs stronger greenhouse gas cuts to keep the planet from warming by 2C should be deferred until next year, according to Brazil’s lead negotiator at the upcoming talks in Doha.
**RKB — His argument? Focus on Kyoto extension for the long term.
Blame Wimpy for Slow U.S. Response to Climate Change
In the halting, measured language we’ve come to expect from his impromptu public remarks, President Obama posed a core dilemma of climate change yesterday at his first post-election press conference. Explaining the possible repercussions of failing to act now, he said, climate change “is going to have an impact and a cost down the road, if we don’t do something about it.”
**RKB — Interesting look (in the wake of Obama’s slightly ramped up rhetoric) at the psychology behind climate inaction. That’s right. “I’d gladly pay you Tuesday for a hamburger today.”
Obama vows to move climate change agenda forward
President Obama yesterday committed to making action on climate change a central component of his second term, promising to play a personal role in trying to make the US an “international leader” on climate change action.
Singapore Exchange Seeks Infrastructure Bonds as IPOs Slump
Singapore Exchange Ltd. , Southeast Asia ’s largest bourse operator , is seeking to become a venue for infrastructure bonds as a slump in initial public offerings of shares threatens earnings.
Thirteen Thai Stocks Added To MSCI Indices Effective From Nov 30
Dalian Commodity Exchange – Burma Malaysia Derivatives (BMD) Chairman Dato’ Tajuddin Atan: Giving Play To The Coordination Role Of Exchanges
Press Conference By Ikko Nakatsuka, Japan’s Minister for Financial Services
Dalian Commodity Exchange: Circular On Trading Of New Contracts
Dalian Commodity Exchange: Assistant Chairman Zhang Yujun: Futures Market Continuing To Keep Sound And Stable Development Momentum
Broker Shwan Taha Dominates Foreign Stock Trades in Iraq
It was exceptionally cold in Sulaymaniyah, a city in northern Iraq’s Kurdish region, on the morning of Dec. 22. Shwan Taha was sitting in the airport lounge with a bag of gifts, waiting to get back to his wife and children at home in Istanbul.
MCX – COMDEX Weekly Market Report – November 09, 2012 – November 15, 2012