John Lothian Newsletter: NYSE Euronext, ATG Announce Brazil Trading-Platform JV; ICE Sees Futures Shift Reviving Slowed Swaps Trade; CME Delays Deliverable Swap Futures Until Dec. 3

Nov 6, 2012

NYSE Euronext pairs up with Brazil’s ATG to create a new trading platform for Brazilian stocks. IntercontinentalExchange says they expect more and more traders will begin to use energy futures rather than swaps, as the regulatory landscape continues to shift. In the wake of Hurricane Sandy, CME Group elects to delay the launch of their new deliverable swap futures product until early December.

First Read

ADM Investor Services Companies and Trading Technologies Enter into Global Software and TTNET Distribution Agreement
London based ADM Investor Services International Ltd. and Chicago based ADM Investor Services, Inc. together with Trading Technologies International, Inc. (TT) today announced that the ADM Investor Services companies have chosen TT’s low-latency, high-performance fully managed hosting solution, TTNET, to provide global derivatives market access to their institutional clients.

**** Oh to be a broker again!


Eurex Clearing to launch Europe’s first central clearing service for the bilateral securities lending market
Eurex Clearing, one of the leading CCPs globally, announced today that it will go live with Europe’s first central counterparty (CCP) service for the bilateral securities lending market on 22 November.

**** I need pictures on this one.


NYSE Euronext benefits from cost-cutting
Philip Stafford –
NYSE Euronext, the exchanges operator, reported better than expected third-quarter results on Tuesday after deepening a cost-cutting programme. The group said earnings had been hit by lower average daily volumes in its derivatives business, and by tough comparative figures from a year ago when markets were roiled by concerns about European and US sovereign debt.


Stock exchange: JSE plan viewed with caution
Andrew England and William Wallis –
The Johannesburg Stock Exchange stands out in Africa as by far the continent’s largest, most liquid and best regulated market and in recent years it has sought to use its status to reach beyond its borders. But its ambitions have, so far, gone largely unfulfilled as, like other South African organisations, it has come up against fears about the country’s dominance, national interest and the underdeveloped nature of fellow African markets.


Greg Coffey – behind the curtain
Harriet Agnew – Financial News
Considered one of the finest traders of his generation by some, dismissed as a ‘bull in a bull market’ by others, few in the hedge fund industry divide opinion like the ‘Wizard of Oz’, writes Harriet Agnew.

**** What would journalists do without cliches?


The Best Route to Play Commodities?
It used to be that most individual investors seeking to bet on commodities faced a stark choice: buy shares in companies that produce raw materials, or drill for oil near the bullion buried in the backyard.

**** Gentlemen do not play commodities, they speculate.


War of words erupts among rating agencies
Stephen Foley in New York –
Jules Kroll leaned over the table and slapped down two documents, side by side. “This one is our report on the deal,” he says, pointing to the (much) thicker of the two. “This little doily underneath is the DBRS report.”

**** Fight, fight, fight…..


The Dollar Is Still King, For Now
Take a sputtering U.S. economic recovery. Add in one of the closest presidential elections in history. Top it with a natural disaster that exposes the woefully inadequate state of infrastructure in some of the country’s richest parts. The question is natural: Where is the U.S. heading? Back to its heyday of financial and political prominence as Barack Obama and Mitt Romney promise? Or toward a slow but inexorable decline, as some economic figures and the effects of superstorm Sandy might suggest?


SEC Announces Assistance to Filers Affected by Hurricane Sandy
In a continuing effort to provide assistance to individuals and entities attempting to comply with filing and other obligations under the federal securities laws in the aftermath of Hurricane Sandy, the SEC today said it is preparing relief measures that would extend filing deadlines for those affected by Hurricane Sandy and its aftermath.

**** Very decent of them.


Major Exchanges Running on Regular Power Again
Telis Demos – WSJ
After spending nearly a week running on diesel-powered generators, some of the major data centers that power U.S. stock trading are getting back on the main juice.

**** There is always a little juice in the markets.


German Equity Forum to take place in Frankfurt from 12 to 14 November 2012
This year’s German Equity Forum will take place in Frankfurt from 12 to 14 November 2012. The capital market conference is Europe’s largest information and networking platform for companies, investors and analysts from the financial industry and is jointly organised by Deutsche Börse and KfW.




Harrell Smith; Adrian Farnham; Shawn Bernardo; Rick Lane; Alex McDonald; Sean Tully

Companies, Organizations and Groups

Commodity Markets Council; Portware; Standard & Poor’s Corp.


30,403,126 pages viewed, 7,199 articles, 149,473 edits
MarketsWiki Statistics

Lead Stories

NYSE Euronext, ATG Announce Brazil Trading-Platform Joint Venture
Luciana Magalhaes – Dow Jones
NYSE Euronext (NYX) and Brazil’s ATG will form a joint venture to create a new trading platform for Brazilian stocks, executives for the two companies announced Monday at a news conference. The new company will be called Americas Trading System Brasil, or ATS Brasil, and will be controlled by ATG, said NYSE Euronext President and Deputy Chief Executive Dominique Cerutti and ATG President Fernando Cohen. They said initial investments in the joint venture will total $100 million.

ICE Sees Futures Shift Reviving Slowed Swaps Trade
Jacob Bunge – Dow Jones
IntercontinentalExchange Inc. (ICE) expects financial and commodity firms to ramp up trading in new energy futures markets as more heavily regulated swap products are left behind, executives said Monday. Broader distribution and more familiar rules around futures trading are seen helping drive a rebound in business for ICE, which suffered over the summer as swap traders stepped back from off-exchange commodity markets ahead of stricter regulations.

CME Delays Launch of Deliverable Swap Futures Until Dec. 3
Katy Burne – Dow Jones
CME Group told customers Monday it is postponing a rollout of a new kind of interest-rate futures contract due to the disruption from Hurricane Sandy. A spokesman for the Chicago exchange operator said “As a result of the storm on the U.S. East Coast and its significant impact on our customers, we are delaying the launch,” noting it would be put back from mid-November until Dec. 3. “This move is designed to give our market participants additional time to prepare for the launch,” he added.

S&P faces class action lawsuit over CPDOs
Neil Hume in Sydney –
Standard & Poor’s faces the prospect of further legal action in the Australian courts over the rating of risky structured products after a litigation specialist said it would back a class action lawsuit.

D. Börse faces E100-E150m capital shortfall
Philip Stafford –
Deutsche Börse needs around E100m-E150m in additional capital for Eurex, its clearing house, to meet incoming requirements from European regulators as it prepares for the implementation of wide-ranging reforms of derivatives markets.

European and U.S. Officials Said to Meet Privately on Swaps
By Silla Brush – Bloomberg
European and U.S. officials are meeting privately in Washington this week to discuss ways to coordinate rules governing swaps traded by Goldman Sachs Group Inc., JPMorgan Chase & Co. and other firms, according to two people with knowledge of the matter.

MF Global customers sue PricewaterhouseCoopers in amended lawsuit
Reuters via Yahoo! News
NEW YORK – Former customers of MF Global Holdings Ltd’s broker-dealer have added accounting firm PricewaterhouseCoopers LLP as a defendant in a lawsuit stemming from the collapse of the brokerage.

Biggest banks given extra time on reform
Brooke Masters in London –
Global financial reform efforts are falling behind schedule, regulators have conceded. They are giving the biggest banks extra time to write so-called “living wills” and acknowledge that fewer than one-third of the big financial centres will have Basel III rules in place on time.


G20 acknowledges slippage on swaps reform
Reuters via Yahoo! News
MEXICO CITY – International groups tasked with safeguarding the world banking system conceded they would miss a deadline for new rules aimed at limiting risk and boosting transparency in the $648 trillion over-the-counter swaps market.

Remarks To The ALI CLE 2012 Conference On Life Insurance Company Products By Norm Champ Director, Division Of Investment Management U.S. Securities And Exchange Commission

Financial Stability Board Reports To G20 On Progress Of Financial Regulatory Reforms

AMF updates list of unauthorised websites offering binary options trading

The Autorité des Marchés Financiers announces the upcoming disappearance of the qualified investors file

Exchanges & Trading Facilities

ICE gets UK approval for European CDS
Philip Stafford –
IntercontinentalExchange, the US futures exchange, has won UK regulatory approval to clear European sovereign credit default swaps as the industry prepares for wide-ranging reforms of the off-exchange derivatives market.

ICE’s Plans to Clear Sovereign CDS Draw Scrutiny
Katy Burne and Jacob Bunge
IntercontinentalExchange Inc. (ICE) said Monday it is close to gaining approval to clear credit derivatives tied to European government debt, but critics warned the plan may not fully protect the market in a crisis. On an earnings call Monday, ICE Chief Financial Officer Scott Hill said the company expects approval from the Securities and Exchange Commission in the “not too distant future” to clear European sovereign credit default swaps, which act like insurance against a borrower failing to meet its debt obligations. ICE’s European subsidiary already has permission from the U.K.’s Financial Services Authority.

NYSE Euronext Announces Third Quarter 2012 Financial Results
NYSE Euronext (NYX) today reported net income of $108 million, or $0.44 per diluted share, for the third quarter of 2012, compared to net income of $200 million, or $0.76 per diluted share, for the third quarter of 2011. Results for the third quarter of 2012 and 2011 include $18 million and $29 million, respectively, of pre-tax merger expenses and exit costs

NASDAQ OMX October 2012 Volumes

Trading On The Warsaw Stock Exchange: October 2012

BME Expands Its IBEX 35 Index Family – The New Indices Will Be Calculated And Disseminated In Real Time As Of 22nd November
BME expands its IBEX 35 index family with three new tradable indices, all of which are based on the IBEX 35. The new indices, called IBEX 35 TRIPLE LEVERAGE NET, IBEX 35 X5 LEVERAGE NET and IBEXs 35 X5 SHORT will start to be calculated and disseminated in real time from November 22nd.

NASDAQ OMX Welcomes BlackPearl Resources To The Main Market

[CBOE] New “J” Origin Code for Joint Back Office Orders

NZX Energy Service Provider Agreement Renewal

TMX Group Top 20 Largest – Consolidated Short Position Report – Highlights – October 31, 2012

Direct Edge Trading Notice #12-50: Update to Trading Notice #12-43

Hedge Funds & Managed Futures

Partners’ founders put more skin in the game
Paul Hodkinson – Financial News
The founding executives of Partners Group are selling a roughly 6% stake in the Swiss fund of funds manager in a bid to raise additional money for investment alongside the group’s existing investor base. The move comes as private equity firms face pressure to increase the amount of money they co-invest.

Monday’s Bond Sales on Track for 2012 Record
Patrick McGee and Katy Burne – Dow Jones
Abbott Laboratories (ABT) unit AbbVie Inc. is selling the largest bond offering in more than three years Monday, in what could be the busiest day of 2012 for corporate-bond sales.

Banks & Brokers

Stifel Financial and KBW Announce Strategic Merger
Marketwire via Yahoo! Finance
Stifel Financial Corp. and KBW, Inc. today announced that they have entered into a definitive merger agreement to create the premier middle-market investment bank with a specialized focus on the financial services industry.

Neonet Continues To Expand Its Execution Services Client Base By Onboarding Prize Capital Market
Neonet, the independent execution service provider, today announced an agreement with Prize Capital Markets, an Oslo-based brokerage firm, to deliver managed execution services for trading in primarily Nordic equities.

ICAP launches global iron ore desk and appoints new brokers in London and Singapore
ICAP plc, the world’s leading interdealer broker and provider of post trade risk and information services, today announces the launch of a global iron ore desk based out of London and Singapore.

Goldman Sachs names Mark Tucker to board
Associated Press via Yahoo! News
The Goldman Sachs Group Inc. said Monday that Mark Edward Tucker has been appointed to its board.

Georg Jensen Sold To Investment Group For $140 Million
Investcorp, which provides alternative investment products, said Monday that it has signed a definitive agreement to acquire Georg Jensen for $140 million from private equity group Axcel Capital Partners.

HSBC delays decision on whether to leave London
Reuters via Yahoo! News
LONDON – Europe’s biggest bank HSBC will defer a decision on whether to move its headquarters from London until 2015 because of regulatory uncertainty, chairman Douglas Flint told British lawmakers on Monday.

HSBC cuts 30,000 jobs, sees more to come
Reuters via Yahoo! News
LONDON – HSBC has reduced its number of staff by almost 30,000 in the last two years and said more job cuts are likely across the bank to achieve its cost efficiency targets. The bank had 266,700 staff at the end of September, down from 296,000 at the end of 2010 and down about 21,000 this year.

Ex-Plymouth Argyle director sues Barclays
Richard Partington – Financial News
A former director of Plymouth Argyle Football Club is taking Barclays to court over what he has described as a “disastrous” pre-crisis investment.

Morgan Stanley Announces Key Executive Changes; Paul J. Taubman to Retire at End of Year; Colm Kelleher to Become President of Institutional Securities Business

E*TRADE Financial Corporation Announces Proposed Offering of Senior Notes

Clearing & Settlement

LME Clear Appoints Chris Jones As Chief Risk Officer
The London Metal Exchange (LME) is pleased to announce that Chris Jones has been appointed as the chief risk officer for LME Clear, marking an important step in the LME’s self-clearing programme.

Iris Weidinger And Steffen Koehler Become Members Of The ECC Management Board
Iris Weidinger and Steffen Köhler have now been appointed as members of the management board of European Commodity Clearing AG (ECC) following notification to the Federal Financial Supervisory Authority (BaFin). The appointments are in addition to their existing executive functions within European Energy Exchange AG (EEX). At its meeting on 11 October 2012, the Supervisory Board adopted this resolution regarding their appointment to the clearing house’s management board.

Not-Ready-for-Real-Time Players Handicap Themselves
Three in five financial institutions cannot perform real-time reconciliation because they haven’t started working on it for any of their asset classes, according to a recent survey. And they don’t think they’ll be ready to start work on this regulation-essential project before the end of next year, stated the survey […]

CME Group Clearing Advisory: Brent CFD Listing Cycles Amendment on NYMEX Trading Floor and CME ClearPort

Indexes & Products

ETFGI Global ETF And ETP Industry Insights, October 2012

ETFGI: October Net New Asset Flows Into ETFs And ETPs Globally Were US$13.5 Billion, Down From The Previous Month’s Total Of US$40 Billion In September As Investors Face Increasing Political, Economic, Fiscal And Superstorm Sandy Impact Uncertainty

IndexIQ Announces October 2012 Performance of Its IQ Hedge Family of Investable Benchmark Hedge Fund Replication Indexes


Trading Technologies’ X_TRADER Named “Best Buy-Side Commodities Trading Platform”
Trading Technologies International, Inc. (TT), a leading global provider of professional derivatives trading software and solutions, announced that its flagship product, X_TRADER, was named “Best Commodities Trading Platform” at the prestigious Buy-Side Technology Awards in London last Friday.

OneTick Named Best Big Data Provider for the Buy-Side at Buy-Side Technology Awards 2012
OneMarketData, LLC, the leader in tick data management and analytics, today announced that OneTick, the single solution for tick data management, analytics and complex event processing (CEP), was named “Best Big Data Provider for the Buy-Side”at the Buy-Side Technology Awards.

Advise Technologies Recognized as Best Buy-Side Newcomer and Best Buy-Side Product at Buy-Side Technology Awards 2012
Advise Technologies, LLC, a software solutions provider for global regulatory compliance, today announced it was named “Best Buy-Side Newcomer” at the Buy-Side Technology Awards.

Instinet’s Newport Named Best EMS in AsianInvestor Awards
Instinet Incorporated, an independent, global agency-only broker* that will soon serve as the equity trading arm of the Nomura Group, today announced that its Newport EMS has been named “Best EMS” in the 2012 AsianInvestor Service Provider Awards.

SunGard’s Fox River Execution Solutions Provides Macquarie Group with its Canadian Trading Algorithms
SunGard has extended its Fox River Execution Solutions (“Fox River”) suite of award-winning algorithms to Canadian institutions via Macquarie Group’s (“Macquarie”) global equities platform. Macquarie’s Canadian institutional customers can now seamlessly trade inter-listed equities on all available trading venues in both Canada and the U.S. and settle in a single currency, helping improve efficiency.

ATG Announces the Creation of ATS Brasil with NYSE Technologies
Americas Trading Group (ATG) today announced the formation of a new company that will develop a liquidity center targeting the Brazilian exchange market called Americas Trading System Brasil or ATS Brasil. Utilizing trading solutions developed by NYSE Technologies, the technology unit of NYSE Euronext, ATS Brasil will offer customers a new equities matching platform in Latin America.


Prosecution ends Adoboli cross-examination
Vivek Ahuja – Financial News
Kweku Adoboli, the former UBS trader standing trial over a $2.3bn trading loss, has told a court that the version of events he gave to representatives of the Swiss bank last September was “aimed at protecting other staff” from blame.

UBS “rogue trader” denies he was addicted to gambling
Reuters via Yahoo! News
Accused UBS “rogue trader” Kweku Adoboli denied on Monday that he was addicted to gambling, saying that big losses on his personal betting accounts were due to his life spiraling out of control.

Former UBS Banker Bagios Said to Plan Guilty Plea
Christos Bagios, a former banker at UBS AG and Credit Suisse Group AG arrested amid a U.S. crackdown on offshore tax evasion, is scheduled to plead guilty in federal court, according to a person familiar with the matter.

FINRA Files Cease-And-Desist Order Against WR Rice Financial Services And Its Owner Joel Wilson For Fraudulent Conduct
The Financial Industry Regulatory Authority (FINRA) announced today that it has filed a Temporary Cease-and-Desist Order (TCDO) to halt further fraudulent sales activities by Michigan-based WR Rice Financial Services and its owner Joel I. Wilson, as well as the conversion of investors’ funds or assets.

ASIC to seek penalties against operators of unregistered offshore managed investment funds

New Zealand’s Financial Markets Authority: Receivers And Managers Appointed To Ross Asset Management

Environmental & Energy

SunGard Identifies Ten Ways that the Dodd-Frank Act is Affecting the Energy Industry
Press Release
Sid Jacobson, partner in the energy and utilities consulting business of SunGard Global Services, said, “Swap market regulations like those found in the Dodd-Frank Act are expected to change the way the energy industry does business, especially in terms of transaction life cycle decisions, data and processes. Implementing straight-through processing and operational efficiencies in a holistic compliance program will help firms realize benefits such as reduced operating costs that will help offset the investment required in people, process and systems.”

Netherlands Will Join Phase 3 Carbon Permit Sales on EEX
European Energy Exchange AG will boost the number of European Union carbon permits for sale in November and December after the Netherlands joined the list of countries that will sell permits from Nov. 20.

Gas Flaring is Wasting Fuel and Fueling Climate Change
The Guardian
Gas flaring in 20 of the world’s leading oil-producing countries contributes as much to climate change as a major economy like Italy, new estimates show. While flaring has been cut by 30 percent since 2005, $50 billion worth of gas is still wasted annually, the World Bank said.


HKEx And Beijing Xicheng District Government Sign MOU
Hong Kong Exchanges and Clearing Limited (HKEx) and the Beijing Xicheng District Government signed a Memorandum of Understanding (MOU) today (Tuesday) on cooperation and exchange of information.

Tiger Management L.L.C. Announces Strategic Partnership with Tiger Pacific Capital LP, a New Asian-Focused Manager
Business Wire via Yahoo! Finance
Tiger Management L.L.C. has announced a strategic partnership to focus on investing in Asian equities. Tiger Pacific Capital LP is a new investment company, whose founding partners are Run Ye, Junji Takegami and Hoyon Hwang.

HKEx Monthly Market Highlights – October 2012

HKEx On-Floor & Off-Floor Trading Statistics – October 2012

Shanghai Stock Exchange Guides Listed Companies’ Rewards To Investors

Frontier Markets

Credit Suisse to Form Asset Manager Aventicum Capital With Qatar
The venture, to be overseen by Credit Suisse Qatar head Aladdin Hangari, will operate out of two hubs including a Doha- based unit focusing on investments in the Middle East, Turkey and other frontier markets starting in early 2013, the bank said today in a statement.


Quote Of The Day From Credit Suisse: “US Stock Market More Reliable Despite Crashes”
Zero Hedge
Just in case anyone wanted to know what not to say to defend the absolute horrific mess of self-aware vacuum tubes and errant algos, formerly known as “the market”, here is a great primer from Credit Suisse’s trading strategist Phil Mackintosh.

John Lothian Newsletter

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