John Lothian Newsletter: Market Complexity Cited In Snafus; U.S. Steps Up Probes On Insider Trading; ‘Budgetary Crystal Meth’ Risks U.S. Haven Status, Gross Says

Oct 3, 2012

Regulators receive large boxes of input and opinions regarding the control of the modern financial trading system; but those opinions vary greatly on the nature of the bell, and who is best suited to put it on the cat.  Along with keeping control of the new electronic trading frontier, regulators in the U.S .are very busy looking into the less high speed practice of insider trading.  PIMCO’s Bill Gross holds nothing back, and says the future of the U.S. as an investment haven is in jeopardy if  the U.S. continues to fuel itself on addictive debt fixes.  

A week of interviews continues here at JLN!  In First Read, we present part three of the John Lothian Profiles series featuring CBOT icon Tom Cashman. Today’s part of the interview features his best and worst trading experiences.  MarketsWiki.tv has a fresh interview with Frank Pusateri, president and founder of CTA Expo, who talks about trends in the managed futures sector; and you’ve got one more chance to see the interview with Brian Fox of Confirmation.com.  JLN Forex has an interview with Michael Cairns, CEO of FX Solutions, who talks about his start in the industry, and where he sees the future of the forex world. Rounding it off is a MarketsReformWiki interview with Sungard’s Andrew Bateman, who talks with JLN’s Jim Kharouf about Dodd-Frank preparedness and Sungard’s offerings in that area.

First Read

Profiles: Tom Cashman (Part 3: Best & Worst Trades)
MarketsWiki.tv
In our third segment with CBOT member Tom Cashman, a 50 year member of the exchange, we ask him about what he learned from the markets the hard way and what his best and worst trades were like.
http://jlne.ws/P3bEaV

***John Lothian Profiles is a series of video interviews focused on the stories of a selection of traders and the lessons they learned about trading.

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[Video] Fidessa FragVision: In defence of derivatives
Steve Grob – Fidessa
FragVision Episode 7 looks at the common misconceptions about the derivatives industry and the likely impact of some of the new regulations that it is having to get to grips with.
jlne.ws/VtxQes

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Cinnober appoints Head of Sales for Scila Compliance
Automated Trader
Cinnober Financial Technology has engaged Michael Grecoff as Head of Sales for its recently launched trade monitoring service Scila Compliance.
jlne.ws/VtxPav

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LSE’s Milne resurfaces at benchmarking start-up
Cassie Werber – Financial News
The former head of post-trade services at the London Stock Exchange has resurfaced as the chief executive of a start-up benchmarking firm that plans to bid to become the next administrator of Libor. Singapore-headquartered Rate Validation Services on Monday announced the appointment of Kevin Milne as global chief executive officer. Milne left the LSE in June.
jlne.ws/VtxQey

**DA: From scandal comes opportunity. Will Rate Validation Services be part of LIBOR 2.0?

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High Frequency Trading: The ‘Evil, Red-Headed Stepchild’
Wall Street Journal Blogs
High frequency trading, which some consider the root of all evil in today’s markets, may be on the verge of new regulations that could help avert future catastrophe. The problem, though, is potential new rules may not solve all of the market’s problems, according to Larry Tabb of Tabb Group.
jlne.ws/VtxQuX

**DA: Interesting that the term “red-headed stepchild” still passes through today’s political correctness filters.

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U.S. market players urge caution on designing “kill switches”
Reuters via Yahoo! News
WASHINGTON – Brokerage and exchange technology gurus generally endorsed the concept of deploying “kill switches” to stop computer errors before they can unleash havoc on the market, but they warned regulators on Tuesday to ensure they are not set off too easily.
jlne.ws/VtxPqU

***JM: Already off the rails. The focus needs to be on correctly modeling the risk levels in an exchange’s activity; the sensitivity of the switch is a red herring. Kill switches should trigger every single time that an unacceptable event occurs in the system. Assuming you’ve correctly identified risk thresholds and behavior, if you have too many unacceptable events, you don’t make your kill switch less sensitive; you make your system cleaner.

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Hedge Funds Must Embrace The New Communications Landscape Post-JOBS Act
Nick Lawler- Seeking Alpha
In anticipation of the SEC‘s final rulemaking on the JOBS Act, the hedge fund industry is preparing for what are expected to be landmark changes. With the elimination of the prohibition against general solicitation and advertising, hedge funds will now have the ability to openly communicate with investors and the broader public. But to what extent will these changes affect the way hedge funds currently do business? And who will these changes benefit?
jlne.ws/VtxQLm

**DA: If I were a hedge fund, the first thing I would do is become a sponsor of MarketsWiki and JLN.

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Pearson CEO Marjorie Scardino to Step Down After Nearly 16 Years
JESSICA HODGSON – WSJ.com
Pearson PLC, publisher of the Financial Times and educational books and materials, said Wednesday that Chief Executive Marjorie Scardino will step down after almost 16 years at the helm of company, raising questions about the future of the flagship newspaper as the publisher continues to transform itself.
jlne.ws/VtxSmD

**DA: Transform if you must, just keep printing on pink paper.

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Another Scalia Vexes Regulators
JAMILA TRINDLE – WSJ.com
When Eugene Scalia stands up in court Friday to argue against new rules for mutual funds that trade commodities, he will be looking to serve Wall Street with a fresh win against the government.
jlne.ws/VtxQLE

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What’s in a name? For some Wall Street brokerages, not much anymore
Reuters via Yahoo! News
A Wall Street icon vanished last week after Morgan Stanley dropped Smith Barney from its brokerage title. But some in the industry say the firm’s well-known advertising slogan – “They make money the old-fashioned way. They earn it” – and the culture it conveyed had already become a thing of the past.
jlne.ws/VtxSD0

**DA: Add “brand equity” to the list of things that ain’t what they used to be.

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Dave Oxner Joins SIFMA As Managing Director
SIFMA today announced that it has appointed Dave Oxner as managing director of federal government affairs at SIFMA. Mr. Oxner joins SIFMA from the office of Senator Jerry Moran (R-Kansas) where he served as policy advisor.
jlne.ws/VtxR22

MarketsWiki.tv

Frank Pusateri of CTA Expo Discusses the Potential for Managed Futures ETFs
MarketsWiki.tv
Frank Pusateri is the president and founder of CTA EXPO, the conference group which hosts events for emerging managers in Chicago, New York, London and for the first time, in Miami on December 13. He spoke with JLN editor-in-chief Jim Kharouf about the trends he is seeing in the managed futures space, the challenges they face and the prospects for managed futures ETFs as well as mutual funds.
jlne.ws/SuCiZC

Brian Fox of Confirmation.com Talks About Exposing & Preventing Brokerage Fraud
MarketsWiki.tv
Brian Fox, founder and chief marketing officer of Confirmation.com, found his firm in the midst of one of the largest frauds in futures history several months ago. Hired by the National Futures Association to electronically confirm customer account balances that futures brokers report with the actual balances held at their banks, Confirmation.com helped expose the PFGBest fraud. Brian Fox spoke with John Lothian News editor-in-chief Jim Kharouf about the case, how the confirmation system works and just how far electronic confirmations in the futures brokerage space can go to prevent fraud.
http://jlne.ws/TNQRKx

JLN Forex

Five Minutes with Michael Cairns, CEO, FX Solutions

Michael Cairns is CEO of FX Solutions LLC and Managing Director, Americas and Middle East for the firm’s parent company, City Index Group. Cairns spoke with John Lothian News Editor-at-Large Doug Ashburn about the company’s history, the state of forex volumes, and emerging trends in FX.

Q. How did you get your start, and what brought you to New York from Northern Ireland?

A. My background is in trading. I worked previously in the U.K., first for Ulster Bank, then for National Westminster Bank. I came to New York 20 years ago to take up a position with NatWest Plc, to trade in interest rates – forward FX, interest rate futures, swaps, and some government securities as well.

I have been with FX Solutions since we started in 2001 and I’ve been responsible for a lot of the business rules and business logic calculations within our GTS trading system, a system launched in October 2002. We have added onto it and changed it through the years, but it is still our core system. We also offer the MetaTrader (MT4) trading platform, which is very well known globally, so we would be foolish not to incorporate into our offering as well.

In 2004-05 FX Solutions added a sister company called Financial Labs, consisting of a team of Harvard astrophysicists who algorithmically traded, via API, through multiple money-center banks. FX Solutions handled the reconciliations, the prime brokerage, and basically facilitated the trades. Although Financial Labs was sold on to Bank of America in 2007, much of our current risk management philosophy and price discovery comes from working with those guys.

In 2008 FX Solutions was purchased by City Index. Up until then, City Index had been involved primarily in contracts-for-differences (CFDs) and spread betting, especially in the U.K., so in purchasing FX Solutions they got a global footprint in forex. There were a lot of synergies and we have done a lot in the last four years to embed our software with theirs and vice versa.

For the rest of the interview, visit JLN Forex at http://jlne.ws/Szc8kG

MarketsReformWiki

Sungard’s Andrew Bateman on Dodd-Frank Preparedness
With the new and incoming regulations from the Dodd-Frank Act, Sungard is looking to add technology that helps firms address compliance needs for energy firms on position limits, reporting data as well as margin requirements. JLN editor-in-chief Jim Kharouf spoke with Andrew Bateman, president, energy and commodities at SunGard, about the readiness of firms for the new regulations and how its Aligne technology is designed to address those requirements.

Q: Can you give us a sense with what market participants are facing, in terms of meeting the Dodd-Frank requirements?

A: What we’re seeing, given the speed at which the regulation is coming in, there is a lot of focus on getting themselves ready. They are going to have to capture the relevant data in their system, make sure they are doing so in a real-time basis and doing the correct counting. In some form, they will have to be reporting that. Whether than means they will be reporting to the Swap Data Repositories (SDRs) in real-time or end of day, there will be that requirement.

Q: Risk management is, of course, a big focus of the Dodd-Frank rules. How has Sungard tried to address risk management and the regulatory demands?

A: We have a very large presence in the risk management space. We try to leverage our internal capability to deliver solutions. When it came to building out what we needed to comply with the Dodd-Frank Act, we had a data model that really allows us to build out those necessary data fields and capture Dodd-Frank unique data. Then, in terms of dolling out workflow, the system is designed to be easily upgraded. When you look at similar regulatory changes in Europe and elsewhere, we’ll adapt using a similar kind of framework. Ultimately, it won’t require a separate set of engineering. When you get to interfacing with the Swap Data Repositories, we’ve had good relationships with them already and have been working with them to figure out what their requirements would be. The challenge there is the readiness of the SDRs, and what exactly they are going to need and how it is delivered.

For the rest of the interview, visit MarketsReformWiki at jlne.ws/SA9Em2

MarketsWiki

MarketsWiki Page of the Day
Irene Tse
jlne.ws/SZpI0I

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MarketsWiki Recent Updates

People

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Companies, Organizations and Groups

MF Global Holdings Ltd; GATA; CQG

Miscellaneous

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Lead Stories

Market Complexity Cited in Snafus
JENNY STRASBURG AND SCOTT PATTERSON – WSJ.com
Wall Street firms and exchanges should better police each other to prevent and reduce the cost of technology gaffes, industry executives and researchers told securities regulators Tuesday. Stock-exchange and brokerage executives differed over whether regulators or the firms themselves are in the better position to evaluate industry technology to stop problems from disrupting the markets.
jlne.ws/VtxRis

US steps up probes on insider trading
Kara Scannell in New York – FT.com
US authorities have increased the number of new investigations into insider trading by almost half in the past year, building on their recent crackdown on corruption among professional traders.
jlne.ws/VtxSDh

‘Budgetary Crystal Meth’ Risks U.S. Haven Status, Gross Says
Susanne Walker – Bloomberg
Pacific Investment Management Co.’s Bill Gross said the U.S. will no longer be first destination of global capital in search of safe returns unless the gap between spending and debt is addressed.
jlne.ws/VtxRiH

In Stock Market Rebound, a Windfall for Wall St. Executives
STEVEN M. DAVIDOFF – NYTimes.com
Some four years after the financial crisis, many are still feeling the ill effects. But big bank executives are not among this unfortunate group, compensation data shows.
jlne.ws/VtxRz4

Is unlimited growth a thing of the past?
Martin Wolf – FT.com
Might growth be ending? This is a heretical question. Yet an expert on productivity, Robert Gordon of Northwestern university, has raised it in a provocative paper. In this, he challenges the conventional view of economists that “economic growth … will continue indefinitely.”
jlne.ws/VtxRzd

Derivatives: Sophisticated market drives liquidity
Vivianne Rodrigues – FT.com
With Brazil’s equities and its currency, the real, out of favour for most of 2012 – hurt by a combination of lacklustre economic growth and a jump in global risk aversion – the country’s derivatives market has remained a driver of liquidity. Almost 476m derivatives contracts were traded on the BM&FBovespa, Latin America’s leading exchange, in the first eight months of the year compared with 451m contracts in the same period of 2011.
jlne.ws/VtxRPw

Regulatory

CFTC Registration Adds Additional Regulatory Layer for Hedge Funds
Forbes
Earlier in the year, the Commodities Futures Trading Commission (CFTC) repealed a key exemption from registration that a majority of hedge fund advisers had relied on. Set to expire at the end of the year, hedge funds are now gearing up for CFTC registration–in addition to the SEC or state registration requirements that had come into effect this past March.
jlne.ws/VtxRPF

Swap Confirmation Times Must Be Met, CFTC’s Radhakrishnan Says
By Matthew Leising and Silla Brush – NOLINK
Banks and clearinghouses in the $648 trillion swaps market must comply with U.S. Commodity Futures Trading Commission time limits for accepting trades even as members question the standards, according to the director of the regulator’s division of clearing and risk. “As of Oct. 1, all parties affected by the rule are expected to comply,” Ananda Radhakrishnan, who set the time limits, said today in a telephone interview, adding that he was giving his own view on the matter and not speaking for the commission.

Finland Sees Proposed Transaction Tax as Big Risk
Dow Jones
A proposed financial transaction tax could pose a great risk for Finnish jobs and economic growth if it is not adopted on a sufficiently broad basis, Finland’s Prime Minister Jyrki Katainen said in a television interview Wednesday.
jlne.ws/VtxTqH

SEC’s Schapiro: ‘Technology 101’ Issues Behind Recent Glitches
Wall Street Journal Blogs
SEC Chairman Mary Schapiro argued that two recent hiccups in the markets — Facebook’s botched initial public offering and a software malfunction at trading firm Knight Capital LLC that cost the company $440 million — were caused by run-of-the-mill computer issues.
jlne.ws/VtxTH7

Introductory Remarks At SEC’s Market Technology Roundtable By SEC Chairman Mary L. Schapiro
jlne.ws/VtxTHg

Speech By SEC Commissioner Elisse B. Walter: Bringing Municipal Bond Trading Into the Light
jlne.ws/VtxV1Q

Address Of CFTC Commissioner Bart Chilton To The G-20 Amis Roundtable On Public-Private Dialogue, Food And Agriculture Organization Of The United Nations, Rome, Italy
jlne.ws/VtxVi9

ESMA Is Recruiting A Planning Officer And A Finance Team Leader
jlne.ws/VtxVik

High-Level Expert Group On Reforming The Structure Of The EU Banking Sector Presents Its Report
jlne.ws/VtxViq

Exchanges & Trading Facilities

ICE Reports September Futures ADV
IntercontinentalExchange, a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, today reported futures trading volume for September and the third quarter of 2012. ICE’s September average daily volume (ADV) decreased 3% compared to September 2011. Third quarter 2012 ADV declined 4% year-to-year. ICE’s third quarter OTC energy average daily commissions (ADC) were $1.4 million, compared to $1.5 million in the third quarter of 2011.
jlne.ws/VtxUe7

Xetra orderbook turnover at 91 billion euros in September
Order book turnover on Xetra and the Xetra Frankfurt specialist trading stood at E95.8 billion in September – a decrease by 27 percent year-on-year. Of the E95.8 billion, E91.1 billion were attributable to Xetra. E4.7 billion were attributable to the Xetra Frankfurt specialist trading. Order book turnover on Tradegate Exchange* totalled approximately E3.1 billion in September.
jlne.ws/VtxUek

MarketAxess Announces Monthly Volume Statistics for September 2012
Business Wire via Yahoo! Finance
MarketAxess Holdings Inc., the operator of a leading electronic trading platform for U.S. and European high-grade corporate bonds, emerging markets bonds and other types of fixed-income securities, today announced total monthly trading volume for September 2012 of $48.3 billion, consisting of $30.3 billion in U.S. high-grade volume, $2.4 billion in eurobond volume, and $15.6 billion in other volume.
jlne.ws/VtxVPf

September’s Turnover At Boerse Stuttgart Around EUR 7.2 Billion
According to its order book statistics, Boerse Stuttgart generated turnover of about EUR 7.2 billion in September 2012. The trading volume was therefore around the same as in August 2012. At more than EUR 3.5 billion, securitised derivatives accounted for the largest share of the turnover in September.
jlne.ws/QmByn5

[TSE] Trading Overview and Preliminary Figures for September 2012
jlne.ws/VtxUuP

Irish Stock Exchange Statistics September 2012
jlne.ws/VtxW5Z

September Marks Record Month And Quarter For Pmex Trading Volumes
Pakistan Mercantile Exchange ended the first quarter of FY 2012-13 with a record trading volume of Rupees 385.58 Billion in terms of value.
jlne.ws/VtxWmk

MGEX Presenting at Upcoming Juice Products Association Fall Business Meeting
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), will present a pre-meeting workshop, “Apple Juice Concentrate (AJC) Futures 101” at the upcoming Juice Products Association (JPA) Fall Business Meeting at the InterContinental Buckhead Hotel and Resort in Atlanta, Georgia.
jlne.ws/VtxWCO

BME Overhauls Its Equity Websites
BME has overhauled the websites of its four stock exchanges with a view to making them easier to navigate thanks to a single design for all the websites, enriched content and better search tools; all this has been achieved without compromising the specific, specialised, user-friendly focus demanded by the users of these websites.
jlne.ws/VtxXGP

BOX Options Exchange October 2012 InBOX
This is the October issue of InBOX, your news source from inside the BOX Options Exchange. This monthly publication will provide convenient summaries of recent developments at BOX.
jlne.ws/VtxWTj

Athens Exchange: Minimum Disclosed Volume Of Shares
jlne.ws/VtxXXj

Boerse Stuttgart: End Of Subscription Period For Getgoods.De Bond – Trading On Bondm Started On 1 October 2012
jlne.ws/VtxX9M

Talanx AG IPO on the Prime Standard
jlne.ws/VtxXXz

NZX Monthly Shareholder Metrics – September 2012
jlne.ws/VtxYe2

Hedge Funds & Managed Futures

Sun Trading buoyed by eurozone volatility
Tim Cave – Financial News
Sun Holdings, the high-frequency trading firm led by former MF Global chief executive Bernie Dan, reported a 73% rise in its European revenues last year, in the latest sign of the bumper profits booked by specialist traders in the region.
jlne.ws/VtxXa2

‘Junkiest’ Debt Issuance Hits Post-Crisis High
KATY BURNE – WSJ.com
Investors hungry for yield are starting to scrape the bottom of the barrel. Sales of U.S. company bonds rated triple-C by Standard & Poor’s, one of the last rating categories before default, hit $5.9 billion in September, according to data provider Dealogic. That made it the second-busiest month on record, after June 2007, and a post-crisis high.
jlne.ws/VtxXql

Small but Beautiful – Canadian Hedge Funds: Opalesque Canada Roundtable
Opalesque
Over the last five years, the assets of Canadian hedge funds grew from $12 billion to $30 billion. Given the times we are in, that’s a nice growth rate. Currently, 48 hedge funds and fund of funds are members of AIMA Canada, the Alternative Investment Management Association. While $30 billion is still small compared to other hedge fund centers, the industry has become quite diversified in terms of strategies, and many top service providers are active in the country.
jlne.ws/O2WNfb

Carlyle Buys Majority Stake in Commodities Trader
RYAN DEZEMBER – WSJ.com
Carlyle Group LP has acquired a majority stake in commodities trader Vermillion Asset Management in a deal financed in part by the private-equity firm’s new currency: its publicly traded shares.
jlne.ws/VtxXqp

Hatteras Launches Managed Futures Strategies Fund
Hatteras Funds, a boutique alternative investment specialist providing unique alternative investment solutions for financial advisors and their clients, has launched a new mutual fund, the Hatteras Managed Futures Strategies Fund
jlne.ws/VtxYuB

BlackRock Leads Firms Poised to Win From Hedge Fund Ads
Bloomberg
The firms most likely to benefit first from new rules that would allow hedge funds to conduct wide advertising campaigns aren’t hedge funds.
jlne.ws/Vty0mb

Carlyle Acquires Hedge Fund Vermillion in Commodities Expansion
Bloomberg
Carlyle Group LP , the second-largest buyout firm, bought commodities hedge-fund manager Vermillion Asset Management LLC, adding $2.2 billion in commodities assets as the firm expands beyond private equity.
jlne.ws/VtxYL3

Einhorn’s Latest Target: Chipotle
JULIET CHUNG AND JULIE JARGON – WSJ.com
Greenlight Capital Inc.’s David Einhorn recommended a pair of stocks at an investor conference Tuesday while panning two others, offering Wall Street more of the market-moving picks it has come to expect from the hedge-fund manager.
jlne.ws/VtxZ1o

Thiel Fund Leads Investment in Brazilian Start-Up
VINOD SREEHARSHA – NYTimes.com
Peter Thiel’s Valar Ventures Management has made its first foray in Brazil, leading an investment in an e-commerce start-up that is trying to shake up the traditional furniture market here and take on an established retailer recently acquired by the Carlyle Group.
jlne.ws/VtxZ1s

Spouting Nonsense About Apple’s Secret Hedge Fund
Tim Worstall – Forbes
Or as an alternative title, why you might want to be careful believing what Zero Hedge says about anything. They’ve a piece up about Braeburn Capital, a small Nevada corporation. A small Nevada corporation which is also used to manage Apple’s vast and rapidly growing cash pile. All that money they’re making from selling iPhones and iPads but which they’re not (at least as yet are not) handing out to the shareholders in dividends. To list what Zero Hedge get right: yes, Braeburn is owned by Apple, Braeburn manages the cash pile and yes, Apple’s cash pile is very large. What they get wrong:
jlne.ws/VtxZ1C

EDHEC-Risk Institute Welcomes Distinguished New Members To Its International Advisory Board
EDHEC-Risk Institute is pleased to announce that six new members have joined its international advisory board, which brings together high-level representatives from regulatory bodies, leading pension funds, professional organisations and business partners.
jlne.ws/VtxZhX

Banks & Brokers

Goldman Sachs files lawsuit over derivatives contract
Richard Partington – Financial News
Goldman Sachs International has filed a £2.6m lawsuit against an Indian electronics firm over a derivatives contract that turned sour, according to court documents seen by Financial News.
jlne.ws/Vty19w

Dutch Justice dept examines Rabobank’s role in Libor: report
FOX Business
The Dutch justice department requested information from Rabobank, on behalf of foreign investigators, concerning the role it may have played in the manipulation of interbank lending rates, a Dutch newspaper reported on Tuesday.
jlne.ws/VtxZi8

Marex Spectron Group Hires City Heavyweight As CEO
Marex Spectron Group is pleased to announce the appointment of John Wall as Group Chief Executive Officer of the Company, subject to the usual regulatory approval. John replaces Roger Nagioff who took on the role of CEO to lead the firm during a period of rapid change and development over an agreed time-frame.
jlne.ws/VtxZyx

Neonet Expands Its Execution Services Offering With Access To Greek And Turkish Equity Markets – Neonet Adds Access To Athens And Istanbul Stock Exchanges Thus Expanding Its Coverage Of European Equities
Neonet, the independent execution services provider, today announced the addition of two markets to further strengthen its coverage of European equities; Athens Stock Exchange and Istanbul Stock Exchange.
jlne.ws/Vty1qc

King’s Successor Must ‘Stand Back’ Amid New Powers, Lewis Says
Bloomberg
Mervyn King’s successor as Bank of England governor will have to limit involvement in the bank’s daily activities to cope with the breadth of new powers, said Stephen Lewis, an economist at Monument Securities Ltd.
jlne.ws/VtxZOV

Citigroup IT Chief Says Oracle Cloud Can’t Satisfy its Needs
CIO
Citigroup’s SVP of IT, Rangesh Jagannathan, has said that despite Oracle’s recent foray into public cloud applications, its offerings still could not satisfy the requirements demanded by the financial services industry.
jlne.ws/Vty1GB

UBS Discharged from Lawsuit
Zacks via Yahoo! Finance
UBS AG can now breathe a sigh of relief as it has won a discharge of a lawsuit brought forward by shareholder who accused the company of issuing deceptive statements, according to a Reuters report.
jlne.ws/Vty1GJ

Federal govt throws its support behind lawsuit against JPMorgan Chase over Bear Stearns
AP
WASHINGTON – The federal government is throwing its support behind a lawsuit against JPMorgan Chase accusing Bear Stearns, the investment bank JPMorgan bought in 2008, of engaging in massive fraud in deals involving billions in residential mortgage-backed securities.
jlne.ws/Vty05v

JPMorgan Rivals Face Billions in Damages After MBS Case
Bloomberg
JPMorgan Chase & Co. ’s rivals may face government lawsuits claiming tens of billions of dollars in damages tied to investor losses on mortgage bonds after New York’s attorney general filed a fraud lawsuit against the nation’s biggest bank by assets.
jlne.ws/Vty05E

Cantor Fitzgerald Opens Puerto Rico Office, Extending Its North American and Global Footprint
Cantor Fitzgerald & Co., a leading global financial services firm, announced the opening of a new office in San Juan, Puerto Rico. Joaquin Iglesias, formerly of Oriental Financial Services and Carlos Ramos, formerly of the Puerto Rico Retirement System Administration, will head operations for the new office and are focused on serving institutional clients in fixed income sales and trading.
jlne.ws/Vty05F

Morgan Stanley Global Private Equity Completes Majority Investment in Creative Circle
jlne.ws/Vty31c

Interview: Lloyd Blankfein Discusses How the ‘Fiscal Cliff’ Threatens Confidence in U.S. Economy
jlne.ws/Vty2dC

Op-Ed, Financial Times: Peter Oppenheimer – There is Plenty of Life in this ‘Investable’ Equities Rally
jlne.ws/Vty3hC

Clearing & Settlement

Markit headcount jumps by a third
Tom Osborn and Tim Cave – Financial News
Global headcount at Markit rose by a third during 2011, as the UK-based data provider continued its ambitious growth-by-acquisition strategy. The firm’s parent company, Markit Group Holdings, recorded a 14% rise in turnover to $762m for the 12 months ended December 31, according to documents filed at Companies house last week.
jlne.ws/Vty2ue

Indexes & Products

Vanguard drops MSCI indices for FTSE
Chris Flood – FT.com
Vanguard is to switch six index funds with assets of $170bn to FTSE indices from MSCI benchmarks in a move that illustrates how competition is heating up between index providers for a share of the rapidly growing exchange traded funds market.
jlne.ws/Vty2KE

Curtain Rises on Morningstar ETF Confab
ETF Trends via Yahoo! Finance
Starting Wednesday, financial professionals and exchange traded fund industry leaders will converge at the annual Morningstar ETF Invest Conference in Chicago to discuss the industry’s latest developments and how to use the financial products in investment portfolios.
jlne.ws/Vty3yf

September Bolsters Third-Quarter Performance of Most Funds, Morningstar Data Show
September saw increases across the board for the Morningstar Canada Fund Indices, with positive monthly returns helping some categories achieve strong quarterly performance and leaving only one fund index in negative territory in the third quarter.
jlne.ws/Vty3ym

FTSE And Nairobi Securities Exchange Launch Groundbreaking Kenyan Government Bond Index
FTSE Group (“FTSE”), the award winning global index provider, and the Nairobi Securities Exchange (NSE) today announced the launch of the FTSE NSE Kenyan Shilling Government Bond Index, the world’s first independently calculated benchmark index tracking the principal Kenyan government bond market.
jlne.ws/Vty5Gv

Vanguard Selects FTSE As Index Benchmark Provider For Six International Stock Index Funds
jlne.ws/Vty5WP

S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices – A Deletion From The S&P/TSX Income Trust Index
jlne.ws/Vty5WS

Technology

FFastFill offers its global deployment services to BGC Partners, Inc
FFastFill plc, the leading provider of Software as a Service to the global derivates community, is pleased to announce an extension of its contract with BGC Partners to include the global deployment of FFastFill’s execution platform, which incorporates the Horizon Multi-Broker Network, across BGC’s current international brokerage offices. The deal extends FFastFill’s role within BGC Partners from an initial presence in selected locations to full worldwide market presence.
jlne.ws/Vty3OW

Trading speeds under 10 microseconds with HFT Technologies’ CME Feed Handler and Order Gateway
Today, HFT Technologies LLC announced the release of two new applications that give developers and traders of algorithmic trading strategies even faster direct market access to prices and orders at CME and its partner exchanges.
jlne.ws/Vty6dl

ULLINK Acquires Hexapod Solutions
jlne.ws/Vty6dr

Enforcement

UBS rogue trader’s colleagues weep in dock
Reuters via Yahoo! News
A former UBS trader wept in a London dock on Tuesday after reading an email in which “rogue trader” Kweku Adoboli, a former colleague accused of fraud, admitted to unauthorised trades that risked undermining the Swiss bank and colleagues.
jlne.ws/Vty6dv

J.P. Morgan: New Case Copies Older Lawsuit
DAN FITZPATRICK AND JEAN EAGLESHAM – WSJ.com
J.P. Morgan Chase & Co. is employing an unusual argument in its new legal fight with New York Attorney General Eric Schneiderman: The prosecutor didn’t do his own work.
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Environmental & Energy

California on track to link CO2 scheme with Quebec in 2013
Reuters Point Carbon
California is on track to link its forthcoming emissions trading scheme to Quebec’s in 2013, pushing the state one step closer to its goal of connecting to a wider carbon market, the state’s chief air regulator said on Monday.
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**RKB – From the article: The addition of Quebec would increase the size of the overall market by 20 percent, increasing liquidity and giving California businesses more opportunities to reduce emissions.

California governor signs cap-and-trade revenue bills
Reuters Point Carbon
California Governor Jerry Brown has signed two bills related to the use of revenue raised through the sale of carbon allowances, although details of how the money will be spent won’t be determined until next year.
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Changing Calif. climate a threat to crops
San Francisco Chronicle
Farmers have always been gamblers, long accustomed to betting on the probabilities of the weather. But for the Napa Valley, where temperatures have been ideal for the wine industry, shifts in the Earth’s climate could be a game-changer.
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Asia-Pacific

Philippines needs electricity futures market, says energy merchant
Alex Davis – Asia Risk
The next step forward for the development of trading in electricity in the Philippines is the establishment of a futures market, according to energy merchant LDH Energy.
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ADB cuts Asia growth estimates, still sees China soft landing
Reuters via Yahoo! News
The Asian Development Bank cut most of its 2012 and 2013 growth estimates for developing Asia on Wednesday as a slump in global demand weighs on the region’s powerhouses China and India and on its other export-dependent economies.
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HKEx: Moment Of Silence In Trading Hall For Victims Of Vessel Collision Incident Near Lamma Island
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Miscellaneous

KRAWCHECK: Big Banks Should Stop Paying Execs Mostly In Stock
Business Insider via Yahoo! Finance
Executives become aligned with stockholders.
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