John Lothian Newsletter: Investors skirt new shorting curbs to bet on EU woes; Regulators to fortify bank capital after Libor, fines and fraud; Barclays case shocks the energy market

Nov 2, 2012

Investors, told to stop speculating on EU government bond defaults, promptly begin the search for a different investment vehicle that will allow them to continue trading the same outcome. Bank regulators are increasing capital requirements after ongoing fraud and poor decision making shows no signs of subsiding. Barclays sets aside more money to pay fines for allegedly having “done an Enron” to the US power market. Take a look at First Read and the Exchanges section for a rundown of October exchange volume numbers; the first wave of reports suggests a continuation of the familiar pattern of, “Overall pretty lousy; in a couple of places, downright awful; and surprisingly good bright spots here and there.”

First Read

Short-sighted on short selling
Christian Voigt – FOW
During the early stages of the financial crisis, politicians pulled every plug and threw every switch that they thought might help to stabilise banks. As part of this process, several European countries imposed bans on the short selling of shares in selected financial institutions (FIs) and credit default swaps (CDSs) for euro-area bonds.
jlne.ws/Vi0SiW

**** I say ban bans.

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Stock certificates feared ruined by Sandy
Stephen Foley in New York – FT.com
Trillions of dollars of stock certificates are feared ruined after Hurricane Sandy flooded a vault at the Depository Trust & Clearing Corp, the Wall Street-owned organisation that manages important parts of the US trading infrastructure. The DTCC houses 1.3m paper certificates for shares, bonds and other financial instruments, including foreign securities, at the organisation’s headquarters in Manhattan’s financial district.
jlne.ws/Vi0Sj0

**** There are electronic records on all this. This is just an anachronism.

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MGEX Reports Volume and Open Interest Growth
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), today announced a 16 percent increase in total Exchange volume from October 2011. Additionally, total volume had a 17 percent increase from September 2012. Total Hard Red Spring Wheat (HRSW) and Apple Juice Concentrate (AJC) reached 106,796 contracts traded. Futures contracts traded accounted for 106,372 contracts of total volume, while options contracts accounted for 424 contracts.
jlne.ws/Vi0Sj6

**** Nice percentage gain, but we need to work on those options numbers.

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OneChicago Announces Trading Volume for October 2012
OneChicago, LLC (OCX), an equity finance exchange, today announced that October 2012 volume of 424,573 was up 149% over October 2011.
jlne.ws/Vi0Szm

**** The exchange with the CEO on the ball puts up big growth.

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Vix Futures Records All-Time Total Monthly Volume Record in October
The CBOE Futures Exchange, LLC (CFE) announced today that trading in futures on the CBOE Volatility Index (VIX) reached an all-time volume high for any month in its history. During October, a record 2,443,878 VIX futures contracts changed hands, beating the September record of 2,400,552 contracts. VIX futures average daily volume (ADV) in October was 116,375 contracts, 172 percent over October 2011.
jlne.ws/Vi0UHA

***** Small exchanges are putting up big growth numbers. Hmm…..

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MarketAxess to double size in Europe
Stephen Foley in New York – FT.com
MarketAxess, the US owner of an electronic platform for trading corporate bonds, is more than doubling the size of its operations in Europe ahead of new rules bringing transparency to bond trading on the continent. The company is planning to acquire Xtrakter, a financial market data group owned by the clearing house Euroclear, for $42m in cash. The price is about 1.8 times the company’s expected revenues this year.
jlne.ws/Vi0Szt

***** MarketsWiki and MarketsReformWiki sponsor on the move.

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Automated Trader interview with CFTC’s O’Malia: transcript
Automated Trader
Scott O’Malia of the Commodity Futures Trading Commission, spoke with Automated Trader Editor Adam Cox about his philosophy as a regulator, his views about waging public campaigns and transparency and where he believes the focus should be in high frequency trading regulation. Below is a transcript of the interview.
jlne.ws/Vi0Szv

***** When you are a regulator, not everything that looks like a nail needs a hammer.

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If You Think Sandy Was Brutal, Try Critics of the New York Stock Exchange
DAVID WEIDNER – WSJ
It wasn’t just profits and losses that were at stake. There also was the human capital. The New York Stock Exchange was correct in closing the market for two days because of Sandy.
jlne.ws/PK5Mnz

***** Humans matter. Fairness matters. Reputation matters. NYSE did the right thing.

***** What the critics of the NYSE need is a drink. And there is a new one called The Sandy. It is a watered down Manhattan.

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Birth of a market? As Dodd-Frank takes hold, swaps futures are in the limelight
Automated Trader
Attempts to get a market going in swaps futures have been tried before, but with Dodd-Frank on the way and an increasing focus on capital efficiency, the time for this kind of product could finally be at hand.
jlne.ws/TcBYwP

***** Trumpets should be blaring while you read this.

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Banks more open to futures as derivatives rules set in
Reuters
Large banks are becoming more supportive of some futures contracts that they have previously failed to back, as new rules designed to reduce the risks of privately traded derivatives draw more investors towards exchange-traded products, some exchange heads said on Wednesday.
jlne.ws/Vi0SzF

**** If you trade it, trade it as a futures. End of story. Cheaper, faster, better. If this was not the case before, the new regulations and capital requirements have made it that way.

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Icap boosts exchange team with Chicken coup
Tom Osborn – Financial News
Icap has re-hired the former operations chief of its electronic broking unit to help run its new securities exchange, as the interdealer broker evaluates the potential for listing other securities such as derivatives on the platform.
jlne.ws/Vi0SPU

***** Alumni, not Chicken Coup.

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The lights are out but Wall St is at work
David Gelles and Tom Braithwaite in New York – FT.com
Big name financial institutions, white-shoe law firms and small hedge funds alike scrambled to serve clients, days after the storm brought much of New York to a standstill.
jlne.ws/Vi0SPX

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Greek editor cleared over Swiss bank list
Kerin Hope in Athens – FT.com
A Greek investigative journalist who published the names of 2,000 Greeks with bank accounts at a Swiss branch of HSBC was acquitted on Thursday night of violating data protection laws after a marathon 11-hour court hearing.
jlne.ws/Vi0SPZ

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The Bruce-Bharara Bromance
PETER LATTMAN – NYTimes.com
Preet Bharara, the United States attorney in Manhattan, had already had a pretty good week as he and his family traveled to Hartford last Thursday for a Bruce Springsteen show. But at the concert, things got even better for Mr. Bharara, who has made no secret of his fierce devotion to Bruce.
jlne.ws/Vi0SQ6

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13 Things to Teach Your Children that Will Make Their Financial Lives Easier
U.S.News & World Report LP via Yahoo! News
A well-known proverb says if you train a child properly, they’ll remember that training when they’ve grown. That’s probably especially true when it comes to their finances. Even when they’re too young to understand money, what you teach them will affect how they deal with finances throughout their lives.
jlne.ws/Vi0Vex

***JM: Next week, “13 Things Parents Should Learn First In Order To Better Teach Their Children”. Yes, it’s the same article.

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MarketsWiki.tv

Todd Fulton

Todd Fulton of Pioneer Futures on What Investors Want in Emerging Managers (Part 1 of 2)
Todd Fulton, Vice President, Managed Futures at Pioneer Futures, has been around the CTA space for more than 20 years. He spoke with JLN Managed Futures editor Jim Kharouf about just what it is that attracts investors to emerging CTAs, why he isn’t sold on Sharpe ratios, what fees really are and the future for managed futures.

Watch the video »

JLN Managed Futures

This issue of JLN Managed Futures comes just as the FIA is concluding its annual Chicago Expo. It has been a strange conference, with Hurricane Sandy preventing more than a few attendees, exhibitors, panelists, and even the industry’s top regulator from making the trip. But, as they say, the show must go on. In other news, the one-year anniversary of the MF Global bankruptcy figured prominently in news stories and conference panels. Upwards of 85 percent of fund managers are not prepared for the sea of regulatory change. And, a Forbes article describes how NOT to run a hedge fund. But first, Todd Fulton of Pioneer Futures explains the role of emerging CTAs in part one of his interview with Jim Kharouf.

Hedge fund analyst faces public fury over false Sandy Twitter reports
CBS 6 Richmond
As Superstorm Sandy slammed into the East Coast on Monday night, one Twitter user in New York City posted a flurry of alarming reports about fallout from the storm.
jlne.ws/SnZF5a

**DA: Have you seen this story? What a piece of work, this guy. Would he yell “fire” in a crowded theater if there was money in it?

It brings up an interesting point, though. There is a lot of money pouring into using social media analytics in algos. Could a coordinated social media blitz generate enough bad signals as to create a flash crash? I hope we never find out.

Sourcing Hidden CTAs
James Bibbings, NIBA Journal
As 2012 comes to a close it’s apparent the commodity interest markets have had a tough year. We’ve continued to watch the developments of MF Global, seen Peregrine Financial Group (“PFG”) come unglued and nearly watched Knight Capital crumble after a trade error. We’ve seen commission rates continue lower, talked to clients who are uneasy about investing in our industry, and have had to deal with the many considerations of the Wall Street Reform Act (“Dodd Frank”). Yet, even with all the setbacks, the managed futures space has continued to grow; attracting interest from investors the world over. This article intends to examine several ways that your brokerage can separate itself from the pack and take advantage of the growing interest in the managed futures asset class. http://jlne.ws/RhNaGv

JLN Interest Rates

Hurricane Sandy Caused Up To $20 Billion In Insured Losses And $50 Billion In Economic Losses
Disaster modeling company Eqecat now estimates that Hurricane Sandy caused up to $20 billion in insured losses and $50 billion in economic losses, the company said on Thursday. The insured loss estimate is double what Eqecat forecast previously. The firm said subway and electrical outages will produce much more substantial losses than had been expected.
jlne.ws/Toxv85

A year after MF Global failure, customers safer than before collapse
Futures Magazine
For more than 160 years, no customer had ever lost a penny as the result of default by a futures industry clearing member. MF Global’s failure last October, followed by fraud at PFGBest nine months later, shattered this uninterrupted legacy of trust in our industry.
jlne.ws/Sbw6ms

Transcript of ’44 Bretton Woods Meeting Found at Treasury
NY Times.com
A Treasury economist rummaging in the department’s library has stumbled on a historical treasure hiding in plain sight: a transcript of the Bretton Woods conference in 1944 that cast the foundations of the modern international monetary system.
jlne.ws/WOd2AC

MarketsWiki

People

Shane Stiles; Todd Fulton; Vincent Viola

Companies, Organizations and Groups

Gate39MEDIA; Pioneer Futures, Inc.

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30,251,427 pages viewed, 7,192 articles, 149,362 edits
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Lead Stories

Investors skirt new shorting curbs to bet on EU woes
Reuters via Yahoo! Finance
New rules to stop speculators making Europe’s debt crisis worse by betting on government bond defaults are prompting investors to find alternative ways to insure against or profit from bad news in the region.
jlne.ws/Vi0VeF

Regulators to fortify bank capital after Libor, fines and fraud
Reuters via Yahoo! Finance
Banks will have to hold more capital after recent hefty fines, trading losses, money laundering and rate-rigging showed that operational risks are not being covered properly.
jlne.ws/Vi0T6v

Barclays case shocks the energy market
Javier Blas, Commodities Editor – FT.com
The multibillion US electricity market has seen some Hollywood-style action. “It is like that battle scene from Braveheart: hold … hold … unleash hell!” That is how one electricity trader at Sempra Energy describes Barclays’ trading style in an instant-message exchange dated February 2007. “That’s funny as hell,” the bank’s trader responds. US regulators weren’t so amused.
jlne.ws/Vi0TmY

US swaps shake-up set to boost exchanges
Michael Mackenzie and Gregory Meyer in New York – FT.com
Some four years after the demise of Lehman Brothers and near-failure of AIG illustrated the systemic risk of over-the-counter derivatives and prompted a regulatory backlash, the vast US swaps industry faces being cut down to size. The explosive growth of US swaps in recent decades was built on offering investors a customised risk management product that contrasted with the much smaller and more rigid listed futures alternative.
jlne.ws/Vi0T6B

MF Global Unit Administrator Says 90% of Funds Recovered
By Kit Chellel – Bloomberg
Administrators of MF Global Holding Ltd.’s U.K. subsidiary said that one year after the brokerage firm collapsed they have recovered about 90 percent of funds belonging to the unit’s clients and 75 percent of assets due creditors.
jlne.ws/Vi0T6D

FERC Takes Aim at Wall Street
BEN PROTESS and MICHAEL J. DE LA MERCED – NYTimes.com
Wall Street finds itself in a bare-knuckle brawl with a government agency. Yet the fight is not with the Federal Reserve or another banking regulator, but a less-known agency more accustomed to patrolling the nation’s energy pipeline than a trading floor.
jlne.ws/Vi0Vvc

Greece’s Botched Rescue Is Frustrating to Behold, Lipsky Says
Bloomberg via Yahoo! Finance
Efforts to rescue Greece have failed to provide the basic structural reforms needed to help bring competitiveness to its economy, said John Lipsky, the International Monetary Fund’s former first deputy managing director.
jlne.ws/Vi0Vvd

Fixing Greek Debt Remains Elusive Euro-Zone Target
CHARLES FORELLE AND MARCUS WALKER – WSJ.com
In a string of meetings beginning next week, European leaders will again wrestle with how to keep Greece from running out of cash, but they almost certainly won’t solve the far bigger question of how to cut down the growing pile of debt that is slowly suffocating the country.
jlne.ws/Vi0Vvf

Maple, TMX Combination May Offer C$1 Billion Benefits for Customers
Wall Street Journal Blogs
Clients of Canada’s dominant exchange operator could see the amount of capital they need to trade cut by more than C$1 billion, though a senior executive at TMX Group Inc. said it would take around two years for the full benefits to emerge.
jlne.ws/Vi0Tn6

Niederauer Says NYSE Open Was Smooth as Closure Ends
Nina Mehta and Whitney Kisling – Bloomberg
The New York Stock Exchange (NYX) opened on time by running on backup power from generators following the longest weather-related shutdown in more than a century. Brokers on the NYSE floor experienced limited Internet and mobile-phone connections while still being able to trade from the exchange.
jlne.ws/Vi0Tna

Call for co-operation on trade finance
Sophie Baker – Financial News
Institutional investors have been urged to move into the trade finance market to provide a secondary source of funding to companies as European banks continue to deleverage.
jlne.ws/Vi0VLC

Storm over ‘Lagarde list’ intensifies
Kerin Hope in Athens – FT.com
Greece’s parliament has been asked to investigate why two former finance ministers did not pursue possible tax evaders on the so-called “Lagarde list” of 2,000 Greeks with Swiss bank accounts.
jlne.ws/Vi0VLK

Regulatory

Remarks Before The FIA Expo By CFTC’s Chairman Gary Gensler
Good morning, I want to thank the Futures Industry Association (FIA) for inviting me to speak at your Expo 2012 in Chicago. I’m only sorry that Hurricane Sandy prevented me from being there for my scheduled speech yesterday. It would have been my fourth year at the Expo. I’m glad that you could arrange for me to speak to you from a distance.
jlne.ws/Vi0VLQ

Sandy Delays Swap-Collateral Rules Until Nov. 13, CFTC Says
Silla Brush – Bloomberg
CME Group Inc., Intercontinental Exchange Inc. and LCH.Clearnet Group Ltd. clearinghouses for swaps will have a five-day delay to implement Dodd-Frank Act collateral protection rules because of disruptions from superstorm Sandy.
jlne.ws/Vi0TDF

CFTC’s Division of Clearing and Risk Issues Staff Interpretation Regarding Part 22
The staff of the Commodity Futures Trading Commission’s Division of Clearing and Risk today issued an interpretation regarding Part 22, under which Futures Commission Merchants and Derivatives Clearing Organizations must legally segregate each Cleared Swaps Customer’s collateral, but are permitted to operationally commingle the collateral of their Cleared Swaps Customers.
jlne.ws/Vi0W27

Swap-Trading Rules Won’t Be Finished by November, O’Malia Says
Silla Brush and Kim Chipman – Bloomberg
Swap-trading rules governing firms such as CME Group Inc. (CME) and ICAP Plc (IAP) won’t be completed by mid- November at the main U.S. derivatives regulator, according to Commodity Futures Trading Commissioner Scott O’Malia.
jlne.ws/Wbb26t

Scila Nominated As Rising Star By Deloitte Sweden
Deloitte Sweden will present awards for Sweden Technology Fast 50 and Rising Stars on Tuesday, November 6th. These are awards for Swedish technology companies, and Deloitte have organised the event since 2003. Scila is nominated in the category Rising Stars.
jlne.ws/Vi0W2a

ESMA Publishes Its Opinion On The Emergency Measure By The Greek HCMC Under The Short Selling Regulation
jlne.ws/Vi0TU2

ESMA Publishes Its Opinion On The Emergency Measure By The Spanish CNMV Under The Short Selling Regulation
jlne.ws/Vi0W2g

UK’s Financial Services Authority Requires SIPP Operators To Raise Disclosure Standards
jlne.ws/Vi0TUd

FSB Releases Reports On Progress In Implementing The SIFI Framework
jlne.ws/Vi0WPH

New Zealand’s Financial Markets Authority: New Regulations Target Lowball Share Offers
jlne.ws/Vi0WiH

Exchanges & Trading Facilities

CBOE Holdings, Inc. Reports Third Quarter 2012 Results
CBOE Holdings, Inc. (NASDAQ: CBOE) today reported third quarter 2012 net income allocated to common stockholders of $45.2 million, or $0.52 per diluted share, compared with $40.6 million, or $0.45 per diluted share in the third quarter of 2011. On an adjusted basis, net income allocated to common stockholders was $37.7 million, or $0.43 per share, compared with $44.7 million, or $0.50 per diluted share, in the same period last year. Operating revenues of $128.3 million for the third quarter decreased 11 percent compared with $143.6 million in the third quarter of 2011.
jlne.ws/TcDajP

The Options Industry Council Announces Options Trading Volume Declined 17% In October
The Options Industry Council (OIC) announced today that 324,329,913 total options contracts were traded in October which is 17.05 percent less than the 390,982,436 contracts traded in October 2011. On average, 15,444,282 contracts changed hands each day, which is down 17.05 percent from the 18,618,211 contracts traded on average in October of last year. Volume numbers for October reflect that there were two fewer trading days in October as a result of market closures due to Hurricane Sandy.
jlne.ws/Vi0WiO

OCC Announces Average Daily Cleared Contract Volume Down 17% in October, Futures and Securities Lending Activity Up 31%
OCC announced average daily cleared contract volume in October was 15,598,902 contracts, a 17 percent decline from October 2011. Total cleared contract volume reached 327,576,945 contracts for the month, representing a 17 percent decline from the October 2011 volume of 393,461,669 contracts. OCC’s year-to-date total contract volume is down 14 percent with 3,385,778,300 contracts in 2012.
jlne.ws/Vi0WPU

Average daily volume of 7.6 million contracts at Eurex Group in October
In October 2012, the international derivatives markets of Eurex Group recorded an average daily volume of 7.6 million contracts (October 2011: 10.7 million). Of those, 5.3 million were Eurex Exchange contracts (October 2011: 7.3 million), and 2.4 million contracts (October 2011: 3.4 million) were traded at the U.S.-based International Securities Exchange (ISE).
jlne.ws/Vi0X68

ISE Reports Business Activity for October 2012
The International Securities Exchange (ISE) today reported average daily volume of 2.4 million contracts in October 2012. This represents a decrease of 30.2% compared to October 2011. Total options volume for the month was 50.4 million contracts. ISE was the third largest U.S. equity options exchange in October with market share of 17.7%*.
jlne.ws/Vi0X69

Xetra orderbook turnover at 84 billion euros in October
Order book turnover on Xetra and the Xetra Frankfurt specialist trading stood at E88.7 billion in October – a decrease by 19 percent year-on-year (October 2011: E109.5 billion). Of the E88.7 billion, E84.1 billion were attributable to Xetra – a decrease by 20 percent y-o-y (October 2011: E104.6 billion). E4.6 billion were attributable to the Xetra Frankfurt specialist trading – a decrease by 7 percent y-o-y (October 2011: E5.0 billion). Order book turnover on Tradegate Exchange* totalled approximately E2.6 billion in October.
jlne.ws/Vi0Wz6

BATS Global Markets Reports October Volume; Sets Monthly U.S. Equities Market Share Record With 13%
BATS Global Markets (BATS), a leading operator of securities markets in the U.S. and Europe, today reported October U.S. equities market share of 13.0%, a new record for the company. In Europe, BATS Chi-X Europe reported market share of 24.8%, maintaining its position as the largest equity market in Europe during 2012.
jlne.ws/Vi0Wz9

KCBT HRW Wheat Futures & Options Volume Increases in October
Kansas City Board of Trade HRW wheat futures and options volume and open interest increased during the month of October when compared to last month.
jlne.ws/Vi0X6g

NASDAQ OMX Nordic Trading Statistics October 2012
The share trading on NASDAQ OMX Nordic decreased by 24.0 % to a daily average of 1.9bn EUR, compared to 2.5bn EUR in October 2011. Compared to the previous month, September 2012, the daily average decreased by 5.0%.
jlne.ws/Vi0X6i

Key figures SIX Swiss Exchange and Scoach Switzerland: October 2012
A total of 2,629,544 trades were executed on SIX Swiss Exchange and Scoach Switzerland in October, which represents an increase of 6.6% over the previous month. Trading turnover was at practically the same level as the previous month at CHF 71.0 billion.
jlne.ws/Vi0Wzo

Boerse Stuttgart reports turnover of around EUR 7 billion in October
Boerse Stuttgart’s order book statistics show that its turnover reached around EUR 7 billion in October 2012. The trading volume therefore fell slightly month on month. At around EUR 3.2 billion, securitised derivatives accounted for the largest share of turnover in October. This means that the transaction volume was around 10 percent below the previous month’s figures in a generally weak market environment.
jlne.ws/Vi0ZuS

Nordic Growth Market NGM AB: October turnover exceeds 2.5 billion SEK (301 million Euro) at NGM
Nordic Growth Market NGM generated a total turnover which exceeded 2.5 billion SEK (301 million Euro) for October 2012, an increase of nearly 2 percent compared to last month.
jlne.ws/Vi0ZuV

[OSE] Trading Overview in October 2012
OSE announced a trading overview (preliminary estimates) in October 2012. Trading value of Nikkei 225 Leveraged Index ETF (1570) and Nikkei 225 Inverse Index ETF (1571) in October 2012 recorded the highest. Trading volume of OSE-FX in October 2012 was 433,617 units, which showed a 93.1% rise over the preceding month.
jlne.ws/Vi0Zv4

Tokyo Grain Exchange Monthly Trading Report – October 2012
jlne.ws/Vi0ZLo

Chi-X Australia Marks First Year of Operations
Chi-X Australia Pty Ltd, a wholly owned subsidiary of alternative trading venue operator Chi-X Global Holdings LLC, marked its first anniversary yesterday and has established a pattern of continued growth in market share culminating in a high of 8.99% on 12 October 2012.
jlne.ws/Vi0ZLr

London Stock Exchange hosts African Investment Summit
London Stock Exchange today welcomes Dr. Ngozi Okonjo-Iweala, Minister of Finance of Nigeria as the keynote speaker at its annual African Investment Summit. Dr. Okonjo-Iweala celebrated the launch of the Summit by opening London trading. She was joined by senior executives from some of Africa’s leading businesses.
jlne.ws/Vi0XDf

[ASX] Exchange-traded government bonds a step closer
Retail access to exchange-traded government bonds is a step closer today, after the Senate passed the Commonwealth Government Securities Legislation Amendment (Retail Trading) Bill. ASX welcomes the development as a prerequisite to the quoting of Australian Government bonds on a securities exchange in Australia.
jlne.ws/Vi0XDl

Johannesburg Stock Exchange Adds Silver And Platinum Commodities To Quanto Futures Product Range
The Johannesburg Stock Exchange (JSE) has again expanded its commodities product range by adding silver and platinum quanto futures to its existing gold, copper and Brent crude Quanto Futures which were launched earlier this year.
jlne.ws/Vi101Y

[CBOE] Regulation SHO Rule 204 – Close Out Requirement, Hurricane Sandy FAQ
jlne.ws/Vi1023

TSX Block List Leaders – October 2012
jlne.ws/cSTW6v

BM&FBOVESPA Market Holiday – All Souls’ Day
Friday (November 02) is national public holiday in Brazil and there will be no trading on BM&FBOVESPA.
jlne.ws/Vi10it

Hedge Funds & Managed Futures

Hedge Funds Care Canada Gala Raises Nearly C$200,000 for Prevention and Treatment of Child Abuse
GlobeNewswire via Yahoo! Finance
More than 200 Canadian hedge fund industry professionals and supporters gathered at Spice Route in Toronto October 23rd for the ninth annual “Open Your Hearts to the Children Gala.”
jlne.ws/Vi0Yas

Hedge fund Edoma Partners to shutter
Reuters via Yahoo! Finance
Pierre Henri-Flamand, a former head of proprietary trading at Goldman Sachs, is to shut his hedge fund Edoma Partners just two years after its vaunted launch. Flamand cited “unprecedented market conditions” for the closure of his London-based fund, which has struggled with poor performance and watched its assets under management shrink to $855 million from a peak of more than $2 billion.
jlne.ws/Vi10yU

Hasenbichler Asset Management expands research team
Hasenbichler Asset Management has added two investment professionals, Georg Reiter and Helmuth Vollmeier, to its Research and Operational team. Bernd Hasenbichler says: “Having a stronger team in today’s environment will consolidate our robust operational and investment infrastructure to better heighten our potentials to our clients“.
jlne.ws/Vi0YHh

Pimco’s Gross Says Quantitative Easing Not Leading to Investment
Bloomberg
Bill Gross, who runs the world’s biggest mutual fund at Pacific Investment Management Co., said there is no evidence that investments is being incented by the Federal Reserve’s quantitative easing program.
jlne.ws/Vi0YHt

Pimco Seeks Protection From Fed’s Inflation in Australia, U.S.
Bloomberg
Pacific Investment Management Co., which runs the world’s biggest mutual fund, favors inflation protection in Australia and the U.S., betting stimulus efforts around the world will stoke faster price increases.
jlne.ws/Vi0YXO

Hedge fund cashes in on Greek bonds
Reuters via Yahoo! Finance
London-based hedge fund Adelante Asset Management has made a 70 percent gain on a sale of Greek bonds, showing the potential for big profits from betting on a recovery in the fortunes of a country effectively off-limits to investors a few months ago.
jlne.ws/Vi10Pq

As Redemptions Surge, The Dreaded Hedge Fund “Gate” Is Back
Zero Hedge
Hedge Fund “gating”, or the forced administrative limit on how much money hedge fund investors can redeem at any given moment, is one of those bad memories that most wish could remain dead and buried with the peak of the credit crisis, when virtually every hedge fund was swamped with redemption requests as impatient LPs couldn’t wait to get what was left of their money back.
jlne.ws/Vi0YY1

JLT unveils second expansion deal in a month
Mark Cobley – Financial News
JLT Benefit Solutions, the pensions consultancy, today announced its second expansion deal in a month, with the addition of 100 staff and 500 pensions clients from a Dutch insurance group.
jlne.ws/Vi0Zei

Platts Completes Acquisition Of Kingsman, Broadening Biofuels Capabilities And Expanding Into Agriculture
jlne.ws/Vi0Zeq

Banks & Brokers

Regulators say four big banks must hold more capital
Reuters via Yahoo! Finance
Global regulators on Thursday said Citigroup Inc, Deutsche Bank, HSBC and JPMorgan Chase & Co will need to hold the most extra capital of 28 banks considered so large and complex they need an extra buffer to absorb potential losses.
jlne.ws/Vi0Zex

UBS May End Up Cutting More Than 10,000 Jobs – Report
Dow Jones
Swiss bank UBS AG may cut as many as 14,000 jobs, Swiss weekly Bilanz reports in an advance copy of its Friday edition, citing an unnamed source at the bank.
jlne.ws/Vi1160

UBS closes London-based distressed debt desk
Reuters via Yahoo! News
LONDON – UBS is closing its London-based distressed debt trading desk as the bank winds down its fixed income business as part of a wider plan to cut 10,000 jobs and shrink its investment bank, banking sources said on Thursday.
jlne.ws/Vi116b

Heritage Capital closes after 11 months
Matt Turner – Financial News
Heritage Capital UK, the merchant bank led by industry veteran Joe Dryer, has applied to cancel its regulatory authorisation and vacated its office just 11 months after a management buyout from Swiss lender Banque Heritage.
jlne.ws/Vi12a3

Aberdeen chief calls for banks to do the splits
Mike Foster – Financial News
Martin Gilbert, chief executive of Aberdeen Asset Management, has called for the complete separation of retail and investment banking and the introduction of risk-adjusted leverage in the sector.
jlne.ws/Vi11my

Knight Capital back in business
CNN Money
A day after a power outage knocked Knight’s systems offline, the market maker is once again taking orders.
jlne.ws/Vi11mE

Barclays Fined Record Amount For Channelling Enron, Manipulating California’s Electricity Market
Zero Hedge
It just is not Barclays’ year. After being exposed (so far the only one) as a ringleader in a massive LIBOR-rigging scandal which cost Bob Diamond his job, yesterday the British bank added insult to injury, after the Federal Energy Regulatory Commission (FERC) fined it $470 million – the largest penalty ever levied by the energy regulator, and even larger than the bank’s LIBOR fine – for getting caught doing what Enron got caught doing about a decade ago: manipulating California’s electricity markets.
jlne.ws/Vi11mH

RBS Net Loss Widens as Restructuring Continues
Dow Jones
Royal Bank of Scotland Group PLC Friday posted a third-quarter net loss as the state-owned bank continues to reshape its business in an effort to return to profitability and private ownership.
jlne.ws/Vi11D2

Deutsche Bank Names Chief of North American Unit
MARK SCOTT – NYTimes.com
Jacques Brand was appointed chief executive of Deutsche Bank’s North American operations on Thursday. Mr. Brand, 52, will also join the bank’s group executive committee, according to a company statement. He previously was global head of investment banking coverage and advisory in Deutsche Bank’s corporate banking and securities unit.
jlne.ws/Vi12H0

Canada will push to keep bank capital rules on schedule
Reuters via Yahoo! News
OTTAWA – Canada will urge all countries to stick to the agreed schedule for implementing tougher bank capital rules at a November 4-5 meeting of finance ministers and central bankers from the Group of 20 nations, a senior finance ministry official said on Thursday.
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Mid-Sized Banks Split From Wall Street in D.C. Lobbying
Bloomberg
Mid-sized banks that mostly let Wall Street and small firms speak for the industry during the debate over the Dodd-Frank Act have decided it’s time to carve out their own agenda in Washington.
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Commerzbank awaits bonus dispute fate
Richard Partington – Financial News
Commerzbank will learn next week whether it can appeal a High Court order to pay 104 ex-Dresdner Kleinwort bankers E52m in unpaid bonuses.
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Investment bank of the Week: Goldman Sachs
Shanny Basar in New York – Financial News
Goldman Sachs has earned over $60m in advisory fees from The Walt Disney Company since the turn of the century, and it added to that tally this week by advising the renowned movie company on its $4bn acquisition of LucasFilm.
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Deutsche Bank Fund Administration Services Launched on Autobahn App Market
Deutsche Bank is leading the fund services industry in innovation by launching the industry’s first App-based fund solution that provides access to Deutsche Bank’s fund administration services as well as award-winning research and analytical tools in one place via the Bank’s Autobahn App Market.
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ITG Reports Third Quarter 2012 Results – Steady Rate Capture And Expense Discipline Offset By Global Volume Weakness
Net income of $0.2 million, or $0.01 per diluted share compared to net income of $10.5 million, or $0.25 per diluted share for the third quarter of 2011. Net income for the third quarter of 2012 included a $1.3 millionincome tax benefit, or $0.03 per diluted share, from resolving a contingency in the U.S. The reserves related to this income tax contingency were not excluded from adjusted results when they were established in previous reporting periods.
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ITG To Launch POSIT Match – New Daily Match At 9:45 ET To Provide Valuable Institutional Liquidity
ITG (NYSE: ITG), a leading execution and research broker, today announced the upcoming launch of POSIT Match, a new point-in-time match for U.S. equities. POSIT Match will take place daily at 9:45 AM Eastern Time, starting on Friday, November 16.
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Clearing & Settlement

Asia Risk Congress: Local trade repositories are necessary, says HKMA’s Lee
Nick Sawyer – Risk.net
The setting up of multiple domestic trade repositories is necessary to ensure smaller local financial institutions can meet the derivatives reporting requirements agreed by the Group of 20 (G-20) nations, according to Esmond Lee, executive director, financial infrastructure, at the Hong Kong Monetary Authority.
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Launch Of KDPW’s Trade Repository
As of 2 November 2012 KDPW (The National Depository for Securities, Poland) launched trade repository service. The KDPW trade repository operates under the Trade Repository Rules approved by the KDPW Management Board.In the first operating phase, both participation and reporting trade to the repository will be free of charge.
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CME Group Clearing Advisory: New Dates for Customer Gross Margining and LSOC
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CME Clearing – Performance Bond Requirements – Refined Products Inter-Commodity Spread Credits – Effective Tuesday, November 6, 2012
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Indexes & Products

Russian ETFs Get Ready to Trade
ETF Trends via Yahoo! Finance
The Russian stock market is geared for a transformation after recent changes to legislation has allowed the introduction of exchange traded funds. The move should help bolster liquidity in the local market and allow more foreign investment to flow into the country.
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Lyxor Switches To FTSE For Its Global Real Estate Indices
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Technology

MarketAxess to acquire Xtrakter
Press Release
MarketAxess, the operator of an electronic trading platform for U.S. and European corporate bonds, emerging markets bonds and other types of fixed-income securities, has agreed to acquire Xtrakter, the provider of regulatory transaction reporting, financial market data and trade matching services to the European securities markets. Xtrakter is a wholly owned subsidiary of Euroclear SA/NV.
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Settrade.Com Launches Settrade Streaming App For iPhone 5
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Enforcement

Federal Court In Idaho Orders Brad Lee Demuzio And Demuzio Capital Management, LLC, To Pay Over $3 Million In Connection With CFTC Commodity Pool Forex Fraud Action
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge B. Lynn Winmill of the U.S. District Court for the District of Idaho entered a consent order for permanent injunction against defendant
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Environmental & Energy

Editorial: A Vote for a President to Lead on Climate Change
NY Mayor Michael Bloomberg on Bloomberg News
The devastation that Hurricane Sandy brought to New York City and much of the Northeast — in lost lives, lost homes and lost business — brought the stakes of Tuesday’s presidential election into sharp relief.
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Bloomberg backs Obama over climate change
Financial Times
The issue of climate change has been thrust into the US election spotlight after New York mayor Michael Bloomberg endorsed President Barack Obama for re-election.
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Bloomberg endorses Obama over climate change. Here’s why.
The Washington Post
For a day or two, global warming might actually become a big issue in the presidential race. On Thursday, New York City Mayor Michael Bloomberg (R) came out and endorsed President Obama’s re-election bid, arguing that Hurricane Sandy had brought climate change to the forefront — and commending Obama’s record on this front.
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Asia-Pacific

Asia needs more independent asset managers
Henny Sender – FT.com
In 1998, as the Asian financial crisis raged through South Korea and the rest of the region, Sung Taek Hwang decided to leave his comfortable position at Hyundai Financial to establish his own independent securities firm. It was not an auspicious time. The Korean won plummeted, dragging down many companies that had borrowed dollars and no longer had the ability to repay.
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Japan is in worse than a deflationary trap
Barry Wood – MarketWatch
A couple years ago, an American journalist 10 years resident in Tokyo offered a provocative assessment: Japan, he said, had decided to gracefully withdraw from the world stage.
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Corporate chiefs take on SGX CEO in Bull Charge 2012
A number of corporate chiefs have signed up to take on Singapore Exchange (SGX) CEO Magnus Bocker in the highlight event – Chief Challenge – of Bull Charge 2012. Organised by SGX, Bull Charge is once again rallying listed companies and Singapore’s financial industry to raise funds for charity. The Guest-of-Honour for this year’s Bull Charge is Mr Ng Nam Sin, Assistant Managing Director, Monetary Authority of Singapore.
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HKEx Changes Of Designated Securities For Short Selling
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Frontier Markets

BSE Appointment Of MD & CEO
The Chairman and the Board of Directors of BSE Limited (BSE) are pleased to announce the appointment of Shri Ashishkumar Chauhan, currently working as Interim CEO, as Managing Director & Chief Executive Officer (C.E.O.) of BSE Limited.
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World Bank earmarks $245 million for Myanmar, outlines work plan
Reuters via Yahoo! News
WASHINGTON – The World Bank on Thursday earmarked $245 million in credit and grant funding for Myanmar under an 18-month work plan, the first lending to the southeast Asian nation in 25 years and another sign the country is opening up after years of military rule.
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27 Abu Dhabi Securities Exchange Listed Companies Disclose Financial Statements For The 3rd Quarter 2012 Within 31 Days
Abu Dhabi Securities Exchange (ADX) announced today that 27 companies, out of 66 companies listed on ADX, have disclosed their financial statements for the third quarter of 2012.
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MCX Weekly Market Report October 25, 2012 – November 01, 2012
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