John Lothian Newsletter: Credit Suisse Seeks to Run Exchange; Nine more banks added to Libor probe; Private investors optimistic for economic recovery

Oct 26, 2012

Credit Suisse angles to convert one of its trading platforms into an exchange, in a bid to create the first US exchange owned entirely by a bank. The LIBOR investigation isn’t going away; it’s getting bigger, as nine more banks are added to the list of companies suspected of manipulating the now-disgraced benchmark rate. On a positive note, a recent investor survey reveals that a significant majority of those polled are expecting better times to arrive within the next year. In First Read today, Jim Kharouf revisits the ever-on-dragging Hehmeyer vs. Alaron dispute, and notes that it appears to have finally been staked to death; and ALTSO and Rocktoberfest in Chicago take a solid step towards helping needy kids get prosthetic limbs.

First Read

Rocktoberfest Rocks Chicago
Congratulations to A Leg To Stand On, which held its first Rocktoberfest fund raising event in Chicago last night. The very well attended show featured some great Chicago musical talent from the industry. A tip of the cap to co-founder Mead Welles, Gabriella Mueller and A.J. Warco from ALTSO for putting their passion into a great cause of providing limbs for kids around the world. Since 2002, ALTSO has helped 8,318 children in 13 countries. Did you know just $250 can buy a child a prosthetic limb?

Here’s the promo for the New York and Chicago events, and ALTSO’s story:


Hehmeyer Wins Case – Back to Business
BY Jim Kharouf
In July, I wrote a column about Alaron’s lawsuit against Chris Hehmeyer, the current NFA chairman, former CEO of Penson GHCO and current CEO of HTG Capital Partners.

Well, the verdict is in. The judge in the Circuit Court of Cook County dismissed the case with prejudice on Wednesday, which means it cannot be re-filed. It’s final. And actually, it should not have even come to this. Alaron’s president Steve Greenberg agreed to a legally binding arbitration case with Penson, and separately with Penson’s general counsel Carl Gilmore in 2010 over the transfer of Alaron accounts held at Penson to Peregrine Financial Group (PFG) in 2009. The NFA rulings went in favor of Penson and Gilmore.

But that didn’t work for Greenberg. So he sued Hehmeyer in court alleging “negligent misrepresentation, fraudulent misrepresentation, intentional interference with contractual relationships between Alaron and its introducing brokers” and interference with the sale of Alaron’s customer business to PFG. The suit called for $4 million in damages and another $12 million in punitive damages.

After listening to arguments from both sides, Circuit Court judge Sanjay Tailor tossed out the case, essentially saying “This looks just like the legally binding arbitration you already lost.”
In the end, this was either simply one industry person suing another as is his right, or it was a frivolous lawsuit and a waste of time.

In a broader context, the futures industry is at a point when its leadership’s focus should be on restoring the trust of customers and growing volumes. Let’s not waste more time.


Spotting broker red flags
Larry Schneider – Futures Magazine
In the world of futures trading, speculators know what they’re getting into as soon as a trade is entered. Go short cattle on strong supply numbers, then a mad cow scare hits, causing multiple limit up moves. Doesn’t matter the scenario, trading involves risk. But traders never should have to be concerned that their money on deposit with regulated entities might be in jeopardy.

**** I disagree with the last sentence. You should ALWAYS be concerned where you are sending your money, even to a regulated entity. An FCM is not a bank, even though some banks own FCMs. Even with all the new rule proposals, FCMs will not be banks. Even JP Morgan offered their customers the option of sweeping excess funds out of the FCM to the bank side.


CME to Pay $2 Million to Farmers, Ranchers Hit by Peregrine Collapse
By Jacob Bunge – Dow Jones
CME Group Inc. is set to become a major claimant to the estate of Peregrine Financial Group Inc. as the exchange operator prepares to make good on some customer losses next month.

**** It could be worse, they could have received SpongeBob silver coins.


ICAP wins Interdealer Broker of the Year award from AsiaRisk magazine
ICAP, the world’s leading interdealer broker and provider of post trade risk and information services, has been named interdealer broker of the year at the 2012 AsiaRisk Awards. This is the fourth time ICAP has received the award in the last five years.

*** Can anyone tell me why there are so many awards these days?


Is high-frequency trading a threat to stock trading, or a boon?
Washington Post
Andy Brooks and Gus Sauter have been managing funds at two of the nation’s best-known investment firms for decades, but they can’t agree on what to make of the Wall Street phenomenon of high-frequency trading.

**** One way or another, HFT needs to solve its public relations problems.


US swaps reform triggers futures rush
Michael Mackenzie and Gregory Meyer in New York –
Looming US rules for “over-the-counter” derivatives deals are starting to transform credit and energy markets as traders adjust to new strictures and costs. Tradeweb, the electronic fixed income trading platform, has seen a fourfold jump in US credit derivative index volume over the past week since barriers to trading between market participants were lowered.

**** Futures: Faster, Cheaper, Better?


Big listings bring Bursa Malaysia to fore
Jeremy Grant –
Tajuddin Atan, chief executive of Bursa Malaysia, cannot quite believe what has happened to his exchange. From being a sleepy southeast Asian backwater dwarfed by the markets of China and Japan, Malaysia’s bourse has been catapulted to global prominence after a wave of big-ticket listings.


CFTC could force funds to break US or European law
Lukas Becker – Risk magazine
European hedge funds could be forced to choose whether to break new over-the-counter derivatives rules in either the US or Europe, because proposed guidance on the cross-border application of the Commodity Futures Trading Commission‘s (CFTC) Dodd-Frank Act rules does not include foreign OTC trading rules in its so-called substituted compliance regime – in which overseas entities are allowed to use local law.

***** I love irony.


FN100 Most Influential Women: Trading and Technology
Financial News
Financial News has published its 2012 list of the most influential women in Europe’s financial markets [ ]. Here are the profiles of those working in trading and technology.

**** How many are WILD members? Recruiting list?


SIFMA’s Board of Directors Announces Newly Elected Officers
The Board of Directors of SIFMA announced that it has elected several members to leadership positions on the Board for 2013.The new principal officers include: Chet Helck, Raymond James Financial as Chair; Jim Rosenthal, Morgan Stanley as Chair Elect; Bill Johnstone, Davidson Companies as Vice Chair; and Bernard Beal, M.R. Beal & Company as Treasurer.

**** Do the officers get badges?


Taking Early Exits Off Wall Street
After five years in investment banking, Matt Wolf decided he’d had enough. While the 35-year-old vice president enjoyed his close-knit team of colleagues at Morgan Stanley MS -0.47% in Manhattan, he had reached a breaking point: Too many takeout-fueled late nights, too many canceled trips with his wife and too many judgmental looks at social gatherings. His pay—still generous, but lower than he had expected before the financial crisis—was no longer worth the sacrifices.

***** The risk reward has shifted?


Citi Chairman Is Said to Have Planned Pandit’s Exit for Months
Even though Mr. Pandit and the board have publicly characterized his exit as his decision, interviews with people close to the board describe how the chairman maneuvered behind the scenes for months ahead of that day to force Mr. Pandit out and replace him with Michael L. Corbat, the board’s chosen successor.

***** Just doing his job.


JLN Interest Rates

US rejects calls to scrap Libor from bailout
By Shahien Nasiripour in Washington
The US Treasury and the Federal Reserve have rejected calls to stop using the London interbank offered rate – a lending gauge at the centre of a manipulation scandal – in their bailout programmes.

**** Don’t pull out that bottom piece on the Jenga game.

Greece Reaches Agreement With International Lenders
The New York Times
Greece has reached an agreement with its international lenders on a harsh new austerity package and a brace of controversial labor market reforms, the country’s finance minister said Wednesday.

Greece’s shadow economy: Blessing or curse?
The Economist
BERLIN taxi-drivers tend to argue that if all Greeks paid their taxes the euro zone would be in less of a pickle. But that line of thought may be wrong. Greece’s shadow economy—the activities of those who pay neither tax nor social insurance—seems to be something of a safety-net preventing the country from going into free-fall.


MarketsWiki Page of the Day
Charles Scharf


Rajat Gupta; Hal Weitzman; Joseph Saunders; Charles Scharf

Companies, Organizations and Groups

PFGBest; Visa Inc.


30,001,548 pages viewed, 7,185 articles, 149,172 edits
MarketsWiki Statistics

**** MarketsWiki just passed the 30 million page view mark! Whew! Also worth noting, MarketsReformWiki is steaming towards 2.5 million views; it’s currently at 2,442,800.

Lead Stories

Credit Suisse Seeks to Run Exchange
Credit Suisse Group AG is quietly pushing to turn one of its trading venues into an exchange, an unusual bid that, if successful, would create the only U.S. stock exchange owned outright by a Wall Street bank.

Nine more banks added to Libor probe
Shahien Nasiripour in Washington –
Nine of the world’s biggest banks are facing increased scrutiny from US state prosecutors probing alleged attempts to manipulate the lending gauge known as Libor.

Private investors optimistic for economic recovery
London Stock Exchange
63 per cent of UK private investors feel optimistic about the UK economy over the next 12 months, up from 47 per cent one year ago, according to a survey of over 1,000 investors by London Stock Exchange and research firm ONVA.

Banks cut commodity VAR as regulatory reform bites
Mark Pengelly –
Higher capital requirements and regulatory reform are causing banks to dramatically curb their risk-taking in commodity and energy markets, according to market participants.

Investment Banker, Equity Trader Annual Pay to Shrink Again -Study
Dow Jones
Annual compensation for equity traders is on track to shrink about 20% from last year, while about one-fifth of Wall Street professionals who qualify for bonuses won’t receive anything, according to a closely watched compensation study due out next week.

Tallying the Costs of Bank of America’s Countrywide Nightmare
If only there were mulligans on ill-advised Wall Street takeovers. When Bank of America bought Countrywide Financial, the subprime lending specialist, it initially paid $4 billion. Some analysts have pegged the true financial toll — including write-downs, legal expenses and settlements — at upward of $40 billion.

As a Benchmark Loses Prominence, Brazil Seeks Alternatives
Investment benchmarks are meant to be stable, authoritative guideposts for sizing up assets and performance. In Brazil, a system that has been in place for decades may soon change and force fund managers to dive into riskier investments in order to meet performance goals.

IMF Warns on Impact of Portuguese Austerity
Austerity imposed under Portugal’s E78 billion ($101 billion) bailout program is having a bigger impact on the economy than previously thought, raising risks of further fiscal slippage and higher public debt, the International Monetary Fund warned Thursday.

Greeks fail to agree on bailout terms
Peter Spiegel in Brussels and Dimitris Kontogiannis in Athens –
Greek politicians on Thursday failed again to finalise an overhauled bailout that would give them two additional years to meet tough deficit targets after a holdout leader of a small coalition party continued to resist sweeping labour reforms.


CFTC Said to Allow More Swaps Trading Via Phone in Final Rule
Matthew Leising – Bloomberg
The Commodity Futures Trading Commission will allow more swaps to be traded over the phone than initially indicated under proposed Dodd-Frank Act reforms, according to people familiar with the matter.

CFTC Advances Rules to Rein In Swaps Trade
Swaps trading is one the last bastions of Wall Street where brokers arrange deals over the phone. That clubby way of doing business could go the way of the rest of Wall Street, where trading takes place on computers, under a roughly 500-page draft set of rules designed to push the market away from the opaque world of over-the-counter, phone-based trading, into more transparent electronic venues.

SEC Approves Mortgage Trade Disclosure Rules for Finra’s Trace
The U.S. Securities and Exchange Commission approved rules intended to increase transparency in a corner of the market for mortgage- and asset-backed bonds.

IMF’s Lagarde urges action on unfinished financial reforms
Reuters via Yahoo! News
Unfinished financial reforms are hampering recovery in key parts of the global economy and weighing on economic growth, the head of the International Monetary Fund warned on Thursday.

FSA says tougher jail term would aid market abuse crackdown
Reuters via Yahoo! News
LONDON – Tougher jail sentences would help Britain crack down faster on market abuse, such as the rigging of the Libor interest rate, by encouraging suspects to cooperate, the head of Britain’s financial watchdog said.

Basel executive rejects reform criticism
Brooke Masters, Chief Regulation Correspondent –
Bank safety rules cannot be reduced to a simple formula and recent calls to scrap the “Basel III” reform package because of its complexity are unrealistic, the secretary-general of the Basel Committee on Bank Supervision warned on Wednesday.

FINRA reviewing conflicts of interest at U.S. brokerages
Wall Street’s industry-funded watchdog wants to learn more about how brokerages are managing conflicts of interest, including compensation that may motivate brokers to push certain securities to investors, a top U.S. regulator said on Wednesday.

FSA confirms new rules that will hard-wire common sense into the mortgage market
The Financial Services Authority (FSA) has published new rules that put common sense at the heart of the mortgage market and will prevent future borrowers ending up with a mortgage they cannot afford.

Tobin tax will raise cost of hedging risk -Italy bourse watchdog
The Italian government’s planned tax on financial transactions will raise the cost of hedging risk, the country’s stock market regulator said on Thursday.

Financial Stability Board (FSB): Progress Note On The Global LEI Initiative
Following endorsement of the FSB report and recommendations by the G-20, the FSB LEI Implementation Group (IG) has been tasked with taking forward the planning and development work to launch the global LEI system by March 2013.

[France] Key support measures and technical arrangements implemented by the AMF for application of EU Regulation n° 236/2012

[France] AMF draws the attention of investors to the application on 1st November 2012 of the European Regulation on short selling

BC Securities Commission launches new saveSMART InvestRight program

Canadian Securities Regulators Seek Comment on Amendments Relating to Direct Electronic Access [CSA]

Canadian Regulators Publish Consultation Paper on a Statutory Best Interest Duty [CSA]

DFSA Promotes Continuous Professional Development
The Dubai Financial Services Authority (DFSA) celebrated, today, the achievement of sixteen (16) of its employees who recently achieved the Advanced Diploma in Anti-Money Laundering (AML) from the International Compliance Association (UK).

Exchanges & Trading Facilities

CME Group Net Income Falls 31 Percent as Rates Volume Decreases
Matthew Leising – Bloomberg
CME Group Inc. (CME), the world’s largest futures market, said third-quarter profit fell 31 percent as trading in interest-rate contracts, its largest asset class, declined the same amount.

CME expects aluminium premium swaps trades by end-year
Reuters via Yahoo! Finance
CME Group expects to see the first trades in its new aluminium swap futures contract by the end of this year as it taps consumer frustration with having to pay steep surcharges to get metal in the midst of a glut, the exchange’s head of metals said.

Military Veteran Forum for Human Resources and Veterans Program Executives Convenes at New York Stock Exchange on Monday, Nov. 5
NYSE Euronext (NYX) and Four Block will convene an open forum for Human Resources and Veterans Program executives who seek to effectively recruit, retain and engage military veterans.

Sixth Swiss Structured Products Fair: Visitors discover the potential of structured products

NZX Q3 Shareholder Metrics – NZX Q3 2012 Results – Steady Growth And Ongoing Investment

[CBOE] Restriction on Transactions in Satcon Technology Corporation (“SATC & adj. SATC1”)

[CBOE] Automated Improvement Mechanism in CFLEX 2.0

[CBOE] Changes to Market-Maker Continuous Electronic Quoting Obligations in Hybrid Classes

Hess AG IPO on the Prime Standard

Program Trading Averaged 34.1 Percent of NYSE Volume during Oct. 15-19

Direct Edge Trading Notice #12-44: Fee Schedule Changes For EDGA And EDGX Effective November 1, 2012

Bahamas International Securities Exchange Closed Due To Hurricane Sandy

No Trading On Wiener Boerse On October 26, 2012

Hedge Funds & Managed Futures

STREET MOVES: Mannion to Depart Citadel’s Trading Division
Jacob Bunge – Dow Jones
Martin Mannion, one of the executives who helped to build a key trading division of hedge fund operator Citadel LLC, plans to depart the firm. Mr. Mannion currently is chief operating officer of Citadel Execution Services, part of the Chicago-based company’s securities-trading unit that accounts for 13% of daily turnover in U.S. stocks and one in five options contracts traded.

KKR Said to Struggle With $8 Billion Goal for LBO Fund
KKR & Co. co-founders Henry Kravis and George Roberts are struggling to wrap up their first main buyout fund in six years as the firm’s prior fund underperforms and investors scale back private-equity commitments.

BlueMountain to Saba Searching for Yield in Bond Exotica
Mary Childs – Bloomberg
BlueMountain Capital Management LLC and Saba Capital Management LP are leading investors into the debt market’s darker corners to boost returns, buying securities from collateralized loan obligations to bonds that seldom trade.

Billionaire Hedge Fund’s Naval Prize Nabs 1% of Payday
Drew Benson and Katia Porzecanski – Bloomberg
For all the embarrassment billionaire Paul Singer caused Argentina by seizing one of its navy ships, the biggest triumph in a decade-long dispute brings him just 1 percent closer to recouping his $1.6 billion claim.

Einhorn to Quantitative Easing: Drop Dead
Hedge-fund manager David Einhorn is a big critic of quantitative easing – and he thinks the U.S.’s current monetary policy should essentially be reversed.

Interactive Data Reports Third-Quarter 2012 Results
Marketwire via Yahoo! Finance
Interactive Data Corporation today reported its financial results for the third quarter ended September 30, 2012. Interactive Data’s third-quarter 2012 revenue was $218.1 million compared with $217.9 million in the third quarter of 2011. Excluding the impact of changes in foreign exchange rates, Interactive Data’s organic (non-GAAP) revenue for the third quarter of 2012 grew by 1.4% from the third quarter in 2011.

Winters’ boutique adds to talent pool
Giles Turner – Financial News
Renshaw Bay, the investment boutique led by former JP Morgan banker Bill Winters, has made two more hires. The firm now has 16 registered employees – up from seven at the start of the year.

Havers departs Baird after 10 Years
Kiel Porter – Financial News
Simon Havers, former chairman of the British Venture Capital Association, has left his role as head of the European private equity operations at investment bank Baird & Co after more than a decade at the firm.

Infrastructure sees surge in fundraising
Sarah Krouse – Financial News
Fundraising for unlisted infrastructure funds surged in the fourth quarter of the year, with two fund closes signalling “increasing momentum” in the sector, according to new research.

Popularity of Currency Bets on the Rise
Low interest rates and the stop-and-start climb from the trough stocks fell into four years ago have prompted private clients to ask their advisers for more investment products than ever. The result has been a profusion of nimble new index and mutual funds, structured investments, hedge funds and private-equity plays.

Shift from stocks to bonds at AllianceBernstein
The Wall Street Journal
AllianceBernstein used to be known for its stock mutual funds. That is changing.

Ramius Managed Futures Mutual Fund Added to Recommended List on Fortigent Alternatives Platform
Business Wire via Yahoo! Finance
Ramius LLC , the global alternative investment management business of Cowen Group, Inc., today announced that the Ramius Trading Strategies Managed Futures Fund has been added to the recommended list of mutual fund products on the alternatives platform of Fortigent, LLC, a leading provider of high-net-worth solutions and consulting services to RIAs, banks and trust companies.

High-Yield Loses Allure for Denmark’s $137 Billion ATP Fund
Denmark’s biggest pension fund, ATP Group, is scaling back its investments in high-yielding debt securities, as it predicts a rally in corporate and emerging market bonds may be close to ending.

Janus Capital Group posts 8.4 percent drop in earnings
Denver Post
Janus Capital Group Inc., owner of the Janus, Perkins and Intech fund families, said third-quarter profit fell 8.

Banks & Brokers

S&P downgrades France’s biggest bank
Scheherazade Daneshkhu in Paris –
The vicious circle linking the outlook for banks with their economies continued on Thursday night after Standard & Poor’s rating agency cited increased economic risks as the main reason for downgrading BNP Paribas, France’s biggest bank and changed the outlook to negative for 10 other French banks, including Societe Generale and Credit Agricole.

Falling trading volumes hit Tradition
Tim Cave – Financial News
Compagnie Financière Tradition, the interdealer broker listed on the Swiss exchange, reported a slump in revenues of nearly 20% during the third quarter, in a clear sign of the depressed trading volumes racking financial markets.

Investment banking made simple enough to bore people
Lisa Pollack | FT Alphaville
There are only so many ways to outperform in banking. But these days balance sheets are constrained, regulations are biting, and financial ‘innovation’ raises eyebrows. It’s just dull, in some respects.

RBS Hires UBS’s Hulina to Head Currency, Emerging-Markets Sales
Royal Bank of Scotland Plc., Britain’s biggest publicly owned lender, hired Ed Hulina from UBS AG as head of foreign-exchange and emerging-market sales for the Americas.

Citigroup Productivity Worst of Big Banks Shows Challenge
Michael Corbat , Citigroup Inc.’s new chief executive officer, says he wants to run a more efficient bank. That means rousing or cutting one of Wall Street’s least productive workforces.

JPMorgan Trader Fired for Metal Mispricing Loses Lawsuit
A former JPMorgan Chase & Co. commodities trader, fired for mispricing aluminum trades, lost a lawsuit against the bank when a London judge ruled he couldn’t explain why the errors had all been profitable.

Russian brokers go head-to-head in London
Tim Cave – Financial News
A fast-growing Russian broker has hired a new chief regulatory officer for its fledgling international business, and is looking to double its headcount in the unit over the next year, as it seeks to go head-to-head with rival firms to capture lucrative order flow between London and Moscow.

‘Unusual Selling’ Inside JPMorgan
CNBC via Yahoo! Finance
A chorus of high-level executives inside JPMorgan (JPM) are selling down their stakes in the company, in what some experts are citing as “unusual” activity within the nation’s largest bank by deposits.

Christopher Flint Named President of Lincoln Financial Securities Corporation
PR Newswire via Yahoo! Finance
Lincoln Financial Network, the retail distribution division of Lincoln Financial Group, announced that Christopher Flint, Senior Vice President, Head of Advisor & Acquisition Strategies for LFN, has been appointed President of Lincoln Financial Securities Corporation (LFS).

ANZ Hires Former Deutsche Head of Swaps Trading Jampala
By Gillian Tan – WSJ
Australia & New Zealand Banking Group ANZ.AU -0.59% has appointed former Deutsche Bank DBK.XE -0.78% Head of Swaps Trading Rakesh Jampala as its Sydney-based Head of Rates, people familiar with the matter said Thursday.

Lehman Brokerage Clients ‘On Brink’ of 100% Payback
Dow Jones
The trustee unwinding Lehman Brothers Inc. said remaining customers of the brokerage are at “the brink of a 100% distribution” if a court approves recent settlements, which would mean all of LBI’s customers would get paid in full.

Perella Weinberg hires Gatto
Deal Journal, The Wall Street Journal
Independent advisory shop Perella Weinberg Partners said today that long-time Wall Street M&A banker Joseph Gatto is joining as a partner.

Lazard, Evercore Results Beset by Dearth of Deals
Lazard Ltd. and Evercore Partners Inc. posted weaker third-quarter advisory revenue amid a skittish deal market, while Lazard unveiled a $125 million program to cut costs and staff.

TIAA-CREF Survey Reveals Lack of Personalized Financial Advice Leaves Americans at Risk
Business Wire via Yahoo! Finance
TIAA-CREF, a leading financial services provider, today released findings from a study revealing that only one-third of Americans consistently take action after receiving financial advice.

Clearing & Settlement

SGX enhances transparency of clearing house processes with new rules and refinements
Singapore Exchange (SGX) is consulting the securities and derivatives markets on new rules and refinements to make its clearing and settlement processes more transparent and clearer to market participants. With the proposed amendments, market participants can better understand their rights and obligations. The amendments cover topics such as margins and collateral provided to the clearing house, actions to be taken to manage the default of a Clearing Member, and processes by which customers can have their trades settled during such an event.

CME Group Clearing Advisory: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (OB, OH, I, ON) Effective Friday, October 26, 2012

CME Clearing: Performance Bond Requirements – Electricity, Ethanol, Natural Gas, and NGL outrights; Refined Product Inter-Commodity Spread Credits – Effective Tuesday, October 30, 2012

Indexes & Products

New SPDR ETF launched on Xetra

FTSE/ATHEX Global Traders Index Series New Indices Creation

AdvisorShares’ HDGE To Change Name

Babson Capital Launches Global Short Duration High Yield Fund


Broadridge Reinforces Global Commitment To SWIFT – Earns Renewal Of Accreditations For Reconciliation And Corporate Treasury Solutions

Stenham Selects MSCI’s RiskMetrics HedgePlatform

Eze Castle Integration Releases 2012 Hedge Fund Technology Benchmark Study
Eze Castle Integration, Inc., a leading provider of strategic IT solutions and private cloud services to hedge funds, today released its 2012 Hedge Fund Operations & Technology Benchmark Study, which surveyed 320 hedge funds and alternative investment firms about operational and technology decisions. The study found that Dodd-Frank regulations and other demands for transparency play a crucial role in which technology systems firms decide to adopt.


CFTC Obtains Federal Court Order Against Nicholas Cosmo For Engaging In Unauthorized Futures Trading That Resulted In Tens Of Millions Of Dollars In Investor Losses
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Leonard D. Wexler of the U.S. District Court for the Eastern District of New York entered a default judgment and permanent injunction order against defendant Nicholas Cosmo, formerly of Lake Grove, N.Y., charged with defrauding investors of tens of millions of dollars in a commodity futures trading scheme (see CFTC Press Release 5606-09, January 27, 2009).

Insider trading wiretaps under scrutiny in Rajaratnam appeal
Reuters via Yahoo! News
A panel of judges explored the ramifications Thursday of a potential reversal of hedge fund tycoon Raj Rajaratnam’s conviction as they heard arguments on whether FBI wiretap evidence should have been allowed at his insider-trading trial.

Former UBS Trader Faces New Charges
U.K. prosecutors added two new false-accounting charges to the case against former UBS UBSN.VX -1.62% trader Kweku Adoboli, who took the witness stand Friday in a case that finds him accused of a $2.3 billion fraud.

Environmental & Energy

UK auctions 4.319 mln EU carbon permits at 7.47 eur/t
Britain sold 4.319 million spot European Union carbon permits on Thursday at 7.47 euros ($9.69) a tonne each, the UK Debt Management Office said, in its thirtieth and final auction for the second trading period of the EU’s Emissions Trading Scheme.

Dutch Vote Boosts Pressure to Support Carbon Fix, Lawmaker Says
The Dutch government will be under pressure to endorse planned European Union curbs on supply in the carbon market after a motion by the country’s parliament yesterday, an EU lawmaker from the Netherlands said.

TEXT-S&P report:Tighter CO2 rules drag on european utility earnings
Strict new limits on carbon emissions to be introduced in Europe next year will increase carbon liabilities and drag on the earnings of Western European power generators, says Standard & Poor’s Ratings Services today in the report: “Europe’s Tightening CO2 Emission Rules Add Costs And Uncertainties For Utilities”


Chi-X Japan PTS Receives Exemption From Take-Over-Bid Rule
The Financial Services Agency announced today that as of 31 October2012, Chi-X Japan Limited, a wholly owned subsidiary of alternative trading venue operator Chi-X Global Holdings LLC, will be designated as a proprietary trading system on which transactions are exempt from the Take-Over-Bid rule of the Financial Instruments and Exchange Act.

HKEx Welcomes World’s First RMB-traded Equity Security Outside Mainland China
Hong Kong Exchanges and Clearing Limited (HKEx) welcomes the pending debut next Monday of the first renminbi (RMB)-traded equity security on The Stock Exchange of Hong Kong Limited (the Stock Exchange). It will be the first RMB-traded equity security outside Mainland China and the Exchange’s first dual counter equity security.

Bank of China 3Q Net Profit Rises 17%, Beat Estimates; But Concerns Linger
Dow Jones
Bank of China Ltd. on Thursday reported a better-than-expected rise in third-quarter net profit, although the pace of profit growth remains much slower than during the heyday of state-owned lenders when they had a virtual monopoly of the banking sector.

Carlyle and KKR place bets on southeast Asia
Deal Journal, The Wall Street Journal
Carlyle Group said it has sealed its first Southeast Asia deal, while peer KKR said it has officially opened an office in Singapore to serve as the regional hub for investments.

Playing Hardball With Chinese Investors
Should the U.S. block investment by Chinese companies in America until China opens its market wider to U.S. business? That idea, which is popping up in some trade circles, derives from the well-known principle of reciprocity—in this case, doing unto others as they do unto you. It generally guides trade pacts, including those governing the U.S. and China, in the form of rules intended to produce mutual benefit.

SGX welcomes Gaylin Holdings to Mainboard

TAIFEX Monthly Newsletter – October 2012

Hong Kong’s Securities And Futures Commission: Broker Convicted Of Illegal Short Selling

Hong Kong’s Securities And Futures Commission: Hontex’s Repurchase Offer To Close Without Extension

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