Established U.S. exchanges are viewing newcomer options exchange MIAX with suspicion and concern. The CFTC is planning a quick appeal for its recently-rejected trading limit rules. In Europe, 11 countries in the EU are giving a thumbs-up to a controversial financial transaction tax. In today’s First Read, catch the brand new MarketsWiki.tv interview with Jim Marzano, CEO of analytics company Metrixx, who talks with JLN’s Jim Kharouf about his product offerings, social media, and the future of technology in the financial industry. We welcome two new sponsors to MarketsWiki, and there’s also a reminder in there to get tickets for the fast-approaching Rocktoberfest to benefit ALTSO.
MarketsWiki Welcomes AlgoFast and Gate 39 Media as Sponsors
John Lothian News is pleased to announce AlgoFast, a new event driven algo trading platform, and Gate 39 Media, a full-featured financial marketing agency, have agreed to become Friend Level sponsors of MarketsWiki.
AlgoFast (www.algofast.com) was founded by Justin Bouchard, who also owns Bouchard Trading and Bouchard Systems. He has 10 years of trading experience including fixed income, equity, energy, and currency markets. You can follow AlgoFast on Twitter at @algofast.com.
Gate 39 Media (www.gate39media.com) was founded by Shane Stiles, who launched the agency in 2001. Gate 39 is very popular in the futures industry and has done a lot of work for futures commission merchants, introducing brokers and commodity trading advisors. You can follow Shane on Twitter at @shanestiles.
A Leg to Stand On Benefit Hedge Fund Rocktoberfest Update, October 25, Chicago City Winery
This Thursday, October 11 will be the New York ALTSO Rocktoberfest benefit at 483 Park. Tickets are still available but going fast.
The Chicago event at the City Winery on October 25 is looking great! We have added special guests Jon Langford and Sally Timms from the Mekons and the Waco Brothers along with the Wrong Boys, Jen Justice Band, Flyte, Deep Cover, Matthew Scharpf and John Maher. Our list of Chicago sponsors has grown and now includes Seamless, ICE, CBOE, Hanley Trust, XFA, Eagle Seven, Cheiron Trading and others TBA.
We suggest you get your tickets soon as this event will sell out. Come for a great evening of amazing wine, fabulous food, charity auctions and incredible music, while helping children around the world get A Leg to Stand On!
Three Executives Said to Leave NYSE’s Liffe Amid Shake-Up
Nandini Sukumar – Bloomberg
Three senior executives at NYSE Euronext’s Liffe derivatives exchange are departing as the company overhauls its operations. James Brown, head of U.K. business development for the Equity Derivatives and OTC Services division of NYSE Liffe, and account managers Tina Staples and Stuart Lorberg, are leaving the company, according to three people familiar with the situation. James Dunseath, a spokesman for Liffe in London, declined to comment.
**** There is the clearing house, then there is cleaning house.
Birley departs NYSE Euronext clearing team
Dow Jones Newswires
Patrick Birley, an expert in trade-processing operations, has left NYSE Euronext three months after joining to help the Big Board parent build a new clearinghouse. Birley, who previously worked for rival London Stock Exchange Group, at NYSE Euronext had focused on shepherding customers toward a new trade-clearing facility that is planned for launch in June 2013.
**** Then there is a clean house.
Metrixx Founder Jim Marzano on the Intersection of Bond Analytics and Social Media
Jim Marzano was the first person to trade the Chicago Board of Trade’s 30-year bond contract in 1977. Today, he’s looking to create another first as the founder and CEO of Metrixx — a bond, fx and commodities analytics company that also integrates social media for the trading community. Marzano spoke with JLN editor-in-chief Jim Kharouf about Metrixx, what it brings to the analytics space and how social media can help replace some of that market knowledge that used to be on the trading floor.
**** Jim Marzano keeps reinventing himself and he has a vision to reinvent the way traders interact and share information. And he has some great analytics. You are going to want to check out Metrixx.
SunGard/PRMIA Survey Finds a Quarter of Firms Exiting Businesses Due to Capital Requirements
Financial institutions around the world are feeling the impact of increased capital requirements on certain business lines, with 25 percent exiting these businesses, according to the fourth annual survey by the Professional Risk Managers’ Association (PRMIA), which was co-sponsored by SunGard.
**** Who needs capital?
Newedge launches enhanced FX prime brokerage platform
Newedge announced today the launch of a new Foreign Exchange (FX) Prime Brokerage (PB) platform. While forex has been a part of the company’s suite of prime brokerage services for institutional clients, this enhanced version will provide institutional clients with access to the global currency market – the largest, most liquid market in the world.
**** I have long told you I have big shiny forehead. I proved the first part when I recently bought a hat at the outdoor outfitters Cabela’s. The hat said it was for the “cranium enhanced.”
Large Hedge Funds Have Performed Better Than Small Funds In Down Years, Shows New PerTrac Study
PerTrac, the leading provider of analytics, reporting and communications software for investment professionals, today released the sixth annual version of its analysis of performance trends for hedge funds of different sizes and ages. The study, Impact of Size and Age on Hedge Fund Performance: 1996 – 2011, shows that the average large fund outperformed the average small fund in the negative performance years of 2008 and 2011. During the 41 months since 1996 in which hedge funds of all sizes posted negative performance results, the average large fund lost less than the average small fund in 61% of these monthly periods.
Larry Fink: How to restore confidence in the financial markets
The Wall Street Journal
Larry Fink, the chairman and chief executive of BlackRock, has said in an opinion piece for The Wall Street Journal that it is understandable why investors and politicians are sitting on the sidelines, but such an instinct is exacerbating the “silent crisis of inadequate retirement savings”. We’ve republished the full article below.
**** Who needs capital?
Investment banks: too big to shrink
William Wright – Financial News
Austerity and investment banking are not words that often appear in the same sentence. So many investment banks have found the enforced restraint of the past few years something of a struggle. Everything has been cut back, from bonuses, staff and expense accounts, to risk-taking, proprietary trading and leverage.
**** That market can take care of that problem.
Sungard job opening: Senior Digital Communications Manager
The SunGard Financial Systems senior digital communications manager will support a central digital brand and content strategy with project management responsibility, and direct responsibility for developing a central program for search engine optimization and search engine marketing. This person will also maintain the top level FS pages of the Web site, ensuring content is up to date, on-message and meets quality standards. This person will liaise with marketers across our lines of business in instituting consistent SEO/SEM techniques. This person will also be responsible for working with the Web team for all technical site development specifications, and with the communications and marketing teams regarding writing/content optimization.
**** All 10 fingers required for this digital position.
ChartIQ Selects Barchart for Real-Time Market Data
ChartIQ, the leader in social and mobile stock charting, today launched real-time iPad stock and forex charts, based on market data from Barchart. Customers can now subscribe to real-time equity and forex feeds directly through ChartIQ Pro on their iPad and receive live, streaming stock charts anytime, anywhere.
**** Can you hear me now?
Facebook Fought SEC to Keep Mobile Risks Hidden Before IPO Crash
When Facebook Inc. (FB) filed its proposal Feb. 1 to go public, it touted the effectiveness of ads linked to customers’ friends, citing research from Nielsen, the audience-counting company. Barbara Jacobs, an assistant director for corporation finance at the U.S. Securities and Exchange Commission, was skeptical, as she and her staff vetted the filing to ensure Facebook had disclosed all material information to investors. The claim appeared to be drawn from marketing materials, not a Nielsen study, she wrote to Chief Financial Officer David Ebersman, 42.
“Once called the IPO of the century, Facebook has dropped 45 percent through Oct. 5. That’s the worst offer-to-date performance of any U.S. IPO raising at least $1.5 billion since 2007, when MF Global Holdings Ltd. (MFGLQ) went public, according to data compiled by Bloomberg.”
**** How bad is Facebook? It is the worst IPO since MF Global. Let’s hope for a happier ending for Facebook.
Banks Chasing Asian Millionaires Create Singapore’s Canary Wharf
Singapore ’s Marina Bay area is emerging as the city’s new financial hub, with banks including Standard Chartered Plc and Barclays Plc taking bigger offices as they pursue Asia’s expanding ranks of millionaires.
Argentina says ‘Arrh, no!’ to Paul Singer’s $20 million demand for seized ship
New York Post
They’d rather walk the plank than contribute to this pirate’s booty. A Ghana court yesterday was told Argentina will not fork over $20 million to New York hedge-fund honcho Paul Singer to free up the three-masted tall ship the billionaire seized last week.
Orc invites you to FIA Booth #321
FIA Expo, Chicago, October 31- November 1, 2012
Do we have a treat for you? Come by our Booth #321 to catch up with industry friends, for Halloween goodies and to see how we are improving products to help you take advantage of current market trends. Need a pass? Don’t worry, we have one for you.
**** See yesterday’s newsletter for many more links for free passes to the FIA Expo hall.
How the Presidential Election Impacts Dodd-Frank: UBS Lobbyist John Savercool Interview
John Savercool, senior lobbyist and managing director of UBS Americas knows his politics. A 23-year veteran of Capitol Hill, Savercool recently spoke at the CTA EXPO in Chicago about the presidential election and prospects for Mitt Romney and President Obama next month. Savercool sat down with JLN editor-in-chief Jim Kharouf and spoke about the impact the presidential election will have on financial markets and Dodd-Frank, his expectations for coming Dodd-Frank rules, and what legislation is on his radar for next year.
MarketsWiki Page of the Day
William R. Hambrecht
MarketsWiki Recent Updates
Companies, Organizations and Groups
29,391,689 pages viewed, 7,147 articles, 148,429 edits
Rival Exchanges Push Back on Planned Miami Options Market
Jacob Bunge – Dow Jones
The planned launch of a new U.S. stock-options platform has drawn criticism from two established operators, which asked regulators to scrutinize the transparency of the proposed market.
Trading-Limit Ruling Appeal Considered by CFTC
Silla Brush – Bloomberg
The U.S. Commodity Futures Trading Commission may decide as soon as this week to appeal a judge’s ruling against trading limits for oil, natural gas and other commodities, according to two people briefed on the matter.
Eleven euro states back financial transaction tax
Reuters via Yahoo! News
Eleven euro zone countries agreed on Tuesday to press ahead with a disputed tax on financial transactions aimed at making traders share the cost of fixing a crisis that has rocked the single currency area.
Firm Reviewing Trades to See If Cancellations Needed-FINRA Spokeswoman
Matt Jarzemsky – Dow Jones
An unnamed firm was reviewing errant stock trades made Tuesday to determine whether it would seek to have them canceled, a spokeswoman for the Financial Industry Regulatory Authority said.
Bloomberg Investigates Spanish Bond Benchmark Error
Financial-data provider Bloomberg LP Tuesday said it is investigating the cause of an error that led it briefly to switch a closely watched benchmark for Spanish bonds–a move that caused some confusion in currency markets and is said to have helped pull the euro sharply lower in early trading.
U.S. Sues Wells Fargo, Accusing It of Lying About Mortgages
PETER LATTMAN – NYTimes.com
United States prosecutors sued Wells Fargo on Tuesday, accusing it of lying about the quality of the mortgages it handled under a federal housing program. It was the latest in a series of lawsuits related to banks’ lending practices during the housing boom.
EU fin mins blocked on thorny banking union
Associated Press via Yahoo! News
Europe made little progress Tuesday in its efforts to secure the region’s stricken financial system and ensure that failing banks never risk an entire country’s economy again when finance ministers from the 27-country European Union failed to agree on how a single banking supervisor should be set up.
German regulator: “no euro zone bank watchdog until 2014”
Reuters via Yahoo! News
Plans to establish a euro zone bank regulator by January 1, 2013, may be delayed by a year, Germany’s markets regulator said on Tuesday, a potential setback to efforts to help distressed euro zone countries and their banks.
U.S. approves stress test rules for 100 banks
Bank regulators approved regulations requiring more than 100 large financial institutions with more than $10 billion in assets to conduct annual stress tests to ensure they have enough capital in the event of a deep recession.
India flash crash to see tighter controls
James Crabtree in Mumbai – FT.com
Indian authorities are set to tighten trading rules as part of a probe into last week’s “flash crash”, which briefly wiped close to $60bn from leading equities and heightened investor concerns about fragile markets in Asia’s third-largest economy.
A Bigger Paycheck on Wall Street
SUSANNE CRAIG and BEN PROTESS – NYTimes.com
It still pays to be on Wall Street. The financial industry in New York has slashed jobs by the thousands over the last two years. For those who remain, annual compensation in total is at near-record levels, according to a report released Tuesday by the New York State comptroller.
ISDA/AFME Response Re. EU Regulation On CDS And Short Selling – ESMA Consultation On Market-Making Exemption
Statement by Commissioner Semeta on an EU Financial Transactions Tax – ECOFIN Council
Finansinspektionen And Riksbank: Minutes Of The Meeting Of The Council For Cooperation On Macroprudential Supervision Held On 2 October 2012
Deciphering Chaos: Keynote Address Of Commissioner Bart Chilton Before The High-Frequency Trading Leaders Forum, Chicago, IL
Exchanges & Trading Facilities
DGCX Records Highest Monthly Volumes in History
Dubai Gold and Commodities Exchange (DGCX) registered its highest ever monthly volumes in September, reaching 971,675 contracts, a 100% increase from the same month last year.
NYSE Euronext Announces Trading Volumes for September 2012 and Other Metrics
Business Wire via Yahoo! Finance
NYSE Euronext (NYX) today announced trading volumes for its global derivatives and cash equities exchanges for September 20121. Trading volumes in September 2012 were down year-over-year, but rebounded across the four principal trading venues from lower levels recorded in August 2012.
NZX Announces Change To Senior Management Team
NZX is pleased to announce the appointment of Mandy Simpson as Head of Operations, with responsibility for Market and Issuer Services, effective November 19 2012. Mandy joins NZX from Fronde where she is CFO and GM of Technology Solutions. Prior to Fronde, Mandy held a number of finance and operational roles in New Zealand and the United Kingdom, including several years in the Regulatory News Service at the London Stock Exchange.
Interdin Joins Turquoise As New Member Firm
Turquoise Global Holding Limited (Turquoise), the pan-European multilateral trading facility (MTF), today welcomes Interdin as a new member firm on its cash equities market. Interdin is the second Spanish firm with access to the platform, and Turquoise’s 17th new member firm of 2012.
NASDAQ Announces End-Of-Month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date September 28, 2012
New MEFF Members
NASDAQ OMX September And 3Q12 Volumes And Revenue Capture
BM&FBOVESPA Announces Trading Times That Will Come Into Effect As Of October 22
Hedge Funds & Managed Futures
Hedge funds reap gains from MBS
Sam Jones, Hedge Fund Correspondent – FT.com
Hedge funds are reaping some of their biggest profits from the securitised mortgage market since 2007, when mispricings in complex debt securities led to huge windfalls for savvy traders such as John Paulson and the near-collapse of the global banking system.
Budget cuts hit hedge funds’ trading desks
Harriet Agnew and Tim Cave – Financial News
Hedge funds are moving aggressively to cut costs on their trading desks, according to research from Greenwich Associates, reflecting wider pressure across the trading industry to downsize amid a slowdown in activity.
Gross’s Burning Bond Market Fails to Frighten Investors
Bloomberg via Yahoo! Finance
Paul Smith, a retired attorney in Oakton, Virginia, lost 30 percent of his 401(k) retirement savings during the financial crisis. He shifted to bond funds from stocks and now holds at least 60 percent of his retirement savings in fixed income. While payouts from some of the bond funds barely keep up with inflation, Smith said, he’s worried that stocks could see another decline.
Banks Weigh Flip in Portugal CDS
Katy Burne – WSJ
The prolonged rally In Portuguese sovereign bonds and derivatives designed to insure them is causing some banks to consider changing the way they quote credit-default swaps on the country, according to officials at inter-dealer brokers GFI Group and ICAP.
Has Glencore become ‘too big to fail’?
Javier Blas – FT.com
The global financial crisis of 2008-09 made clear that large global banks, such as Goldman Sachs, are just too big to fail. Could a future crisis in the commodities market reveal that trading houses such as Glencore pose a similar problem?
If You Want A Job With Whitney Tilson, Don’t Send Him A Resume — Try Something Much More Aggressive
Like most big name hedge fund managers, Whitney Tilson , the founder of T2 Partners, gets a lot of emails and resumes from people seeking a job at his fund.
Banks & Brokers
ICAP appoints head of Financial Futures and Options broking for Asia Pacific region
ICAP plc, the world’s leading interdealer broker and provider of post trade risk and information services, today announces the appointment of Richard Vine as head of Financial Futures and Options broking for Asia Pacific (APAC), based in Singapore.
Jefferies Appoints Michael Eastwood Head of Americas Equity Research
Business Wire via Yahoo! Finance
Jefferies today announced the hiring of Michael Eastwood as a Managing Director and Head of Americas Equity Research. Mr. Eastwood brings to Jefferies over 20 years of securities research experience.
Goldman Pushes On Limits in Volcker Rule
JOHN CARREYROU – WSJ.com
Goldman Sachs Group Inc. is lobbying regulators to exempt investment vehicles known as credit funds from the “Volcker rule” in a bid to preserve the firm’s lucrative merchant-banking unit. But if Goldman fails, it has a backup plan.
Bankers finally get a bit of love from Londoners
Ben Wright – Financial News
Maybe the tide of popular opinion against bankers is turning. Well, in South Kensington anyway. At last night’s Intelligence Squared debate at the Royal Geographical Society, the motion – London should love its bankers – was carried with 338 votes for, 281 against and four don’t knows.
City watchdog takes a gamble on capital
Brooke Masters and Patrick Jenkins in London – FT.com
The Financial Services Authority’s decision to relax capital requirements for new UK lending and to allow banks to dip more easily into their stocks of easy to sell assets is a bold combination of political theatre and economic theory.
BofA Merrill gives Hume-Kendall new Europe role
Giles Turner – Financial News
Rupert Hume-Kendall, a senior banker within Bank of America Merrill Lynch, has been promoted to a newly created European role, focused on relationship building within the region.
Morgan Stanley Schedules Quarterly Investor Conference Call
Morgan Stanley will announce its third quarter 2012 financial results on Thursday, October 18, 2012 at approximately 7:15 a.m. (ET). A conference call to discuss the results will be held on Thursday, October 18, 2012 at 10:00 a.m. (ET).
Clearing & Settlement
EU clearing houses results reflect tough environment
Tim Cave – Financial News
The financial results for two of Europe’s largest equities clearing houses have highlighted the difficulties faced by the operators, amid a slump in trading volumes and an increasingly competitive post-trade environment.
Indexes & Products
STOXX Introduces Low Risk Weighted Index Concept
Anatomy Of A Brokerage IT Meltdown
Mathew J. Schwartz – InformationWeek
The network slowdown was one of the first clues that something was amiss at GunnAllen Financial, a now defunct broker-dealer whose IT problems were only a symptom of widespread mismanagement and deeper misconduct at the firm.
KVH To Launch Private Cloud Package – Delivering Flexibly Constructed Highly Secure And High-Performance Dedicated Cloud Environments
UBS trader masked risk exposure of $12 billion, court told
Reuters via Yahoo! News
LONDON – Alleged rogue trader Kweku Adoboli exposed Swiss bank UBS to billions of dollars of hidden market risk for weeks on end, peaking at nearly $12 billion on August 8 last year, a London court heard on Tuesday.
[ASIC] Sydney mortgage broker banned, Australian credit licence cancelled
Fifth Autorité des Marchés Financiers Enforcement Committee Conference
Environmental & Energy
EU should return allowances near phase 3 end — Ieta
The European Commission should return back-loaded EU emissions trading scheme (ETS) allowances in the latter years of the scheme’s third phase, the International Emissions Trading Association (Ieta) said today.
The Neuroscience Of Climate-Change Apathy (And How To Fix It)
Scores of studies and analyses suggest that the costs of ignoring climate change are likely to far outweigh the costs of avoiding it, but estimates of business-as-usual climate change continue to tick upward. Before we can understand and manage climate-change risk, we need to understand and manage the brains that evolution gave us.
Global clean energy investment set to fall for first time in eight years
Global clean energy investment looks to be heading for a dip this year following a weak performance over the third quarter of 2012.
Senior Chinese officials snub IMF meeting
Claire Jones in Tokyo and Jamil Anderlini in Beijing – FT.com
Beijing’s finance chiefs have pulled out of annual meetings of the International Monetary Fund and the World Bank in Tokyo, amid wrangling between China and Japan over a group of islands in the East China Sea.
New Research from SunGard Reveals Needs of Advisors and Investors in Asia Not Being Fully Met
New research undertaken by wealth industry expert Scorpio Partnership on behalf of SunGard, has found that wealth management firms in Asia are not fully supporting the technology and service requirements of their advisors and high net worth clients, potentially impacting service capability and client confidence. This is a key conclusion drawn from the report, ‘Future Advisor Asia’, which examines how Asia’s wealth management sector is meeting the changing needs of the region’s growing high net worth population.
Singapore moves closer to getting yuan-clearing bank
Reuters via Yahoo! Finance
Singapore has issued full banking licences to two Chinese lenders, moving it a step closer to getting a yuan-clearing bank that will let it compete more aggressively with Hong Kong in the growing market for yuan-denominated trades and financial products.
RTS Expands Operations in Hong Kong with Platform Equinix
Equinix, Inc., the global interconnection and data center company, today announced that RTS Realtime Systems Group, a leading global trading solutions provider, has expanded its operations in Asia by deploying in Equinix’s Hong Kong International Business Exchange data center.
Tokyo Stock Exchange: Selection Of Corporate Value Improvement Award Finalists
With respect to the Corporate Value Improvement Award established by Tokyo Stock Exchange, Inc. (TSE), the “Listed Company Award Selection Committee” selected the following five finalists for FY2012.
Thailand Rises To Third Place In CG Watch 2012
The Thai capital market holds the third place, following Singapore and Hong Kong, in CG Watch 2012 – a survey on corporate governance of Asian capital markets conducted by the Asian Corporate Governance Association and CLSA Asia-Pacific Markets.
Monetary Authority Of Singapore To Designate Tax Crimes As Money Laundering Predicate Offences
Iran Cites I.M.F. Data to Prove Sanctions Aren’t Working
New York Times
Iran has insisted that a forecast by the International Monetary Fund shows that the country’s economy is growing, but some economists said that didn’t account for the recent fall of Iran’s currency.
Iran budget under pressure, Ahmadinejad says
Reuters via Yahoo! News
DUBAI – Iran’s state budget is under pressure and the government has cut spending in some areas, President Mahmoud Ahmadinejad was quoted as saying as the country struggles to cope with Western economic sanctions.
Gulf Sukuk Beat Loans for First Time Since 2006: Islamic Finance
Persian Gulf Islamic bond sales are beating Shariah-compliant loans in the Middle East, Europe and Africa for the first time since 2006 as borrowers seize on tumbling yields to finance roads and airports.
India Central Bank Imposes Fine on ICICI Bank, ING Vysya
India’s central bank has fined ICICI Bank Ltd., the country’s second-largest bank by assets, and another private-sector lender for their failure to abide by its rules.
Younger Indians Eager to Embrace Foreign Big-Box Stores and Malls
VIKAS BAJAJ – NYTimes.com
A long-festering controversy about whether India should allow foreign retailers like Wal-Mart into the country has often been cast as a battle between millions of small shopkeepers and large corporate interests. But in much of the country, including in this eastern city, the issue often divides Indians as much by age as by their livelihoods.
The Egyptian Exchange (EGX) Monthly Statistical Report September 2012
Total number of listed companies on the main market amounted to 213 at the end of September 2012. Meanwhile, the number of listed companies on Nilex reached 22 at the end of September 2012.
Berkeley Futures Joins DGCX As Broker Clearing Member