On April 27th, the third annual FinTech Exchange 2017 will be held in Chicago. This event, hosted by Barchart, has built itself into an innovative, informative and valuable conference, thanks to the work of Barchart’s Mark Haraburda, Colleen Sheeren and others on the team.
This year, Barchart is giving away a few tickets. If you would like to go, the first five to sign up here will receive free passes for the one-day event, which runs from 11 am – 7 p.m. at Venue SixTen, 610 S. Michigan Avenue, Chicago. Use your algos to sign in quickly for the free passes by clicking on the link.
OCC Moves Continue
Spencer Doar – JLN
Yesterday, OCC announced that John P. Davidson agreed to become president and COO of the organization starting May 8. Davidson was on the OCC’s board of directors from 2002 to 2006 and his 30+ year tenure in the industry encompasses time at Citigroup, Morgan Stanley and two stops at CME Group. Given the pattern of recent hires at OCC, the presence of the CME on Davidson’s curriculum vitae is far from a surprise.
Here’s the real rub ó this comes right on the heels of the announcement from DTCC that it hired former OCC President and COO Mike McClain to be managing director and general manager of equity clearing. McClain’s last day at OCC was March 22 and the official storyline was he was leaving for personal/family reasons.
Read the rest here.
FinTech Exchange – April 27 in Chicago – Register Today – Early Bird Rate Expires on Friday
Join us on April 27 in Chicago for the 3rd annual FinTech Exchange hosted by Barchart. This all-day, expanded event will showcase concise and engaging on-stage presentations from financial technology leaders as they cover topics, including: Exchange Technology, Data Analytics & Visualization, Tick Data Management, Big Data & Artificial Intelligence, Cloud Security, Market Data & Trading Software, Data Storage & Infrastructure, Telecommunications, Binary Options, APIs, Alternative Data and FinTech Trends. In addition, this year’s event features an extended program with optional in-depth round tables, expanded exhibit hall and an extended networking reception, including a pre-event happy hour the night before at Trading Technologies’ TT TechTap.
Sponsors and partners include Tableau, CBOE, Consulate General of Canada in New York and Chicago, AcquireMedia, B23, CME Group, DataRobot, DDN Storage, Enova, FinTank, FinTech Week, FinTEx Chicago, John J. Lothian & Co., MarketsTech, ModernTrader, Nadex, NIBA, OneMarketData, TopstepTrader, TradeStation, Trading Technologies and Vertex Analytics.
Last year’s event sold out, so get your early-bird tickets.
To view event details or register, please visit www.fintechchicago.com.
Your Brain Wasn’t Built to Handle Reality
Barry Ritholtz – Bloomberg
Most Republicans — to be precise, 74 percent, according to a CBS News poll — think it’s very or somewhat likely Donald Trump’s offices were wiretapped, even though the White House has offered no evidence to back up the president’s claim that his predecessor ordered the monitoring. I just love data points like this. They say so much about humans as a species — how we process information, our inability to look dispassionately at a situation, the ever-present cognitive errors, even the challenges of reaching a simple, rational conclusion based on evidence.
**JK: Let’s all put on virtual reality investment goggles.
New York Banking Royalty’s Heirs Are Unloading Art to Save the Family Estate
Katya Kazakina – Bloomberg
Country estate threatened after foundation bleeds money; Drastic step: auctioning off the Degas and Toulouse-Lautrec
Beyond the formal gardens, past sculpted terraces and ornate fountains, rises Wethersfield — the country estate of what was once one of America’s wealthiest families. There, among rolling hills 95 miles north New York, a grandson of James Jewett Stillman, head of the bank that would grow into Citigroup Inc., envisioned his private Eden — a redoubt of horse-drawn carriages, strutting peacocks and Gilded Age splendor.
**JK: Pawn the jewelry, keep the art.
Tim Berners-Lee: ‘Privacy is not a partisan thing’; As the world wide web creator accepts the prestigious Turing award, he talks to Sam Thielman about the US Congress’s rollback of privacy rules and fake news
Sam Thielman – The Guardian
Sir Tim Berners-Lee, creator of the world wide web, was declared recipient of the prestigious Association for Computing Machinery’s AM Turing award on Tuesday.
**JK: Tim Berners-Lee wonders what has become of his World Wide Web.
JLN Exchange Leader Video Series
In case you have missed our Exchange Leaders series, here is the line-up to date.
Sprecher Says ICE Ready To Roll Out Data and Analytics To Meet The Demand For More Info
Durkin Says CME Growth Is All About Customers
By Leveraging Bats’ Technology, CBOE’s Tilly Wants To Expand Footprint
Nasdaq’s Friedman on New Tech and Positive Momentum
LSEG’s Hackett on a Clear Path Forward
SGX’s Syn Says Trade Barriers Mean Opportunities for Offshore Exchanges
HKEx’s Lamba on Opportunities in China
Monday’s Top Three
Monday was a very democratic day as a variety of stories got a high number of clicks. Top of the charts was an op-ed from the LA Times, Your way of life would not be remotely possible without Wall Street. Second was a crowded spot as three stories tied – US fund manager fires lawyers for handing Donald Trump ‘an unprecedented invitation to corruption’; Bloomberg is shaking up its trading arm and Euronext and Intercontinental Exchange sign clearing services pact all took silver.
96,940,447 pages viewed; 22,414 pages; 204,819 edits
Workplace psychology: Shiny, happy people are 10% more productive at work
Jacob Passy – MarketWatch
A laid-back workplace is more likely to turn a profit.
Real-world and experimental studies have both pointed to a connection between improved employee happiness and increased productivity, according to the report from researchers at the University of Warwick in the U.K. and published in the “IZA ó Journal of European Labor,” which is part of the IZA ó Institute of Labor Economics think-tank in Bonn, Germany. The report assessed various studies examining the link between positive emotions and workers’ performance.
Wall Street braces for rough ride as exchanges seek more speed bumps
John McCrank – Reuters
U.S. stock exchanges that spent decades speeding up markets with cutting-edge technology are now rushing to slow them down.
Euronext to move derivatives clearing business from LSE to ICE; LSE comes under pressure to reopen talks over the sale of its French clearing house
by: Philip Stafford in London
Euronext on Monday put pressure on the London Stock Exchange Group to reopen talks over the sale of the LSE’s French clearing house by unveiling plans to move its derivatives and commodities business from the unit to rival Intercontinental Exchange.
Davidson Joins OCC as President and Chief Operating Officer
Agrawal Promoted to Chief Business Transformation Officer
OCC, the world?s largest equity derivatives clearing organization, today announced that John P. Davidson, a long-time senior executive with more than 35 years of experience in the global financial services industry, has agreed to join the organization as President and Chief Operating Officer, effective May 8th. Davidson will report to OCC Chairman and CEO Craig Donohue, and he replaces Michael McClain, Chief Operating Officer, who left OCC on March 31st for personal reasons.
DTCC names Michael McClain GM, equity clearing
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that Michael McClain has joined the firm as a Managing Director and General Manager of Equity Clearing.
CDS Trades and High-Tech Managers
Matt Levine – Bloomberg
CDS. It’s a little hard to believe this now, but there was a time, not too long ago, when it looked like creepy credit-default-swap stories might become a recurring feature of financial news, and might even achieve a certain mainstream prominence. “The Daily Show” did a segment on the Codere SA CDS trade, in which some hedge funds conspired with an issuer to trigger a technical default on some bonds and get paid out on their CDS contracts. “The Daily Show”! There was a brief shining moment where it seemed possible to have a national conversation about whether it is wrong for hedged bond owners to conspire with issuers to trigger technical defaults in order to get paid out on CDS contracts.
SEC Pick Communicated With Thiel, Mercer Before Nomination
Elizabeth Dexheimer and Benjamin Bain – Bloomberg
Clayton meetings disclosed in response to senators’ questions; Lawmakers sought answers in writing after confirmation hearing
Jay Clayton, the deals lawyer nominated to lead the U.S. Securities and Exchange Commission, said he had “substantive” communications with several wealthy backers of then-President-elect Donald Trump before he was offered the job in January.
Bob Diamond Mounts Latest Comeback From U.K.’s Minor Leagues
John Detrixhe, Donal Griffin, and Richard Partington – Bloomberg
Ex-Barclays chief’s firm to take control of Panmure Gordon; 141-year-old broker specializes in share sales on AIM exchange
Bob Diamond, a financial heavy hitter when he ran Barclays Plc, is coming back to the City of London. His latest venture plays in the minor leagues. Diamond’s investment firm is set to take control of Panmure Gordon & Co., a stockbroker that focuses on the AIM market, where the brokers do much of the regulating and many of Britain’s riskiest listed companies trade.
Women still miss out on management in finance; FT research reveals failure to close gender gap in middle and senior roles
Laura Noonan, Alan Smith, David Blood and Martin Stabe – FT
The majority of junior staff working in financial services are women but only one in four of those who reach a senior role is female, according to exclusive Financial Times data that highlight the struggle the industry faces to close the gender gap.
Swiss Regulator Still Probing UBS, Three Others Over 1MDB Role
Giles Broom, Hugo Miller and Jan-Henrik Foerster – Bloomberg
Finma CEO says private banks need more time to clean up past; BSI, Falcon, Coutts already sanctioned over 1MDB affair
Switzerland’s financial regulator said it’s still probing UBS Group AG and three other private banks in relation to alleged corruption and money laundering at the Malaysian government fund known as 1MDB.
Uncovering the Secret History of Wall Street’s Largest Oil Trade; Year after year, Mexico places a multi-billion-dollar bet in a deal that big banks lust after. This is the untold story of how the “Hacienda hedge” happens.
by Javier Blas – Bloomberg
The men huddled in the same first-floor conference room as always, only this time they’d decided to make their annual oil bet bigger and bolder than ever before. Fewer than a dozen representatives from three Mexican government ministries and PetrÛleos Mexicanos, the state energy company, were about to make a wildly contrarian play. If it paid off, the profits would be enormous. And if they were wrong? They would have spent a small fortune in vain.
Who Killed the Active Fund Manager?
By Mark Gilbert – Bloomberg
Vanguard Advisers Inc. Chief Executive Officer Bill McNabb has identified an unusual suspect in the investment management world’s favorite parlor game: the Chartered Financial Analyst.
Exchanges, OTC and Clearing
CME Group Achieved Record Average Daily Volume of 16.9 Million Contracts per Day in First-Quarter 2016, up 13 Percent from First-Quarter 2015
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that first-quarter 2016 volume averaged a record 16.9 million contracts per day, up 13 percent from first-quarter 2015. CME Group first-quarter 2016 options volume averaged a record 3.5 million contracts per day, up 22 percent versus first-quarter 2015, with electronic options averaging 1.8 million contracts per day, up 26 percent over the same period last year. March 2016 volume averaged 14.3 million contracts per day, up 4 percent from March 2015.
OCC Cleared Contract Volume Up Nine Percent in March
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in March reached 386,877,373 contracts, a nine percent increase from March 2016. This was the highest level of options volume cleared in March by OCC in the last five years. OCC’s year-to-date volume is down one percent with 1,058,670,212 cleared contracts in the first quarter of 2017, compared to 1,064,617,055 contracts in the first quarter of 2016.
Fantex founder leaves athlete stock exchange; Cornell ‘Buck’ French exits US group that allowed investment in players’ earnings streams
by: Sujeet Indap in New York and Leslie Hook in San Francisco
Cornell “Buck” French, the co-founder and chief executive of Fantex, has left the San Francisco-based athlete stock exchange after having shut its trading platform, the Financial Times has learnt. The marketplace, which allowed individual investors to buy and sell shares in entities tracking the earnings of athletes, had been closely watched as an innovative type of finance.
VEON marks its first day of trading on Euronext
VEON (ticker symbol: VEON), a leading global provider of communications services, began trading today on Euronext Amsterdam.
Monthly Report – Rate hike expectations support trading volumes
With further US interest rate hikes on the horizon and a looming end to Quantitative Easing, demand for market instruments to hedge risk has been growing strongly in the first quarter. Hedging needs are driven by open questions – like the number of Federal Reserve rate hikes in 2017 or the European Central Bank’s next monetary policy steps.
Bˆrse Berlin Increases Turnover By More Than Six Per Cent
Bˆrse Berlin’s Market places, Xontro and Equiduct, achieved a combined turnover of EUR16.6 billion and 2.64 million trades in the first quarter of 2017.
LCH SA to provide clearing for Turquoise; LSE’s response to Euronext’s deal with ICE Clear included plans for LCH SA to provide clearing services to Turquoise.
By Hayley McDowell – The Trade
The London Stock Exchange’s (LSE) LCH Clearnet SA is in discussions to provide clearing of European equities traded on Turquoise, shortly after the breakdown of acquisition talks with Euronext.
Bats boosts index business with European additions; Exchange operator said new indices offer low-cost alternative to those provided by incumbent providers across Europe.
By Hayley McDowell – The Trade
Bats Europe has bolstered its index business with the addition of 10 new European indices, bringing the total number of markets now covered to 15.
Banks Turn to Virtual World to Modernize Physical Commodities Trading; Commodities players are trying out blockchain, the technology behind bitcoin, to help buy and sell raw materials
Stephanie Yang – WSJ
Banks and traders are experimenting with the technology behind bitcoin in an effort to solve longstanding problems in the trading of physical commodities.
Tech Founders Want IPO Riches Without Those Pesky Shareholders
Maureen Farrell – WSJ
Companies that go public on the New York Stock Exchange usually celebrate by ringing the opening bell from a balcony crowded with executives and employees. Snap Inc. SNAP -0.80% had only two: co-founders Evan Spiegel and Bobby Murphy, who control about 90% of the voting power in Snapchat’s parent.
eClerx Services Ltd announces winding up of eClerx Investment Ltd
eClerx Services Ltd has announced the winding up of eClerx Investment Ltd, subsidiary of the Company, based in British Virgin Islands, has been completed on March 28, 2017. The same was intimated to the Company on March 29, 2017 by the relevant local authority. The subsidiary was wound up for maintaining lean organization structure and better administrative control.
TradingScreen Signs Commercial Deal with Tethys Technology
Tethys Technology, an industry leader in financial software development for the capital markets has announced a deal with TradingScreen, the leader in electronic trading platforms to provide its customers with Tethys’ broker-neutral algorithms for equities, futures, options and FX trading.
Sucden selects BSO for London/Hong Kong connectivity
London – FX and derivatives broker Sucden Financial has selected BSO to provide clients with low-latency connectivity to execute derivative trades between London and Hong Kong. The deal enables Sucden Financial to deliver continuous network uptime between the two financial districts, as well as access to its electronic trading platform STAR, which is used to trade futures and options on the major exchanges.
51 Best Fintech Blogs And Forums Worth Following
Siva Shankar – Habileltechnologies
A lot of change happens around us every second. In the same way, professionally we see a lot of changes and updates around the industry what we belong to.
These Hackathon Hustlers Make Their Living From Corporate Coding Contests; Some coders go from one marathon hacking session to another, subsisting on prize money and schwag.
by Lizette Chapman – Bloomberg
Peter Ma looked around his San Francisco condo and realized he’d won everything in it. His flat-screen TV, home theater system, 3D printers, phones, tablets, computers and furniture were either hackathon prizes or purchased with hackathon earnings. Stashed under his leather couch ó which he’d bought with an Amazon gift card ó was a thick stack of 2- and 3-foot-long cardboard checks commemorating his most cherished wins. “The only non-schwag I have are shoes,” he said.
Trump Cracks Down on H-1B Visa Program That Feeds Silicon Valley
Jing Cao and Joshua Brustein – Bloomberg
U.S. toughens H-1B applications for overseas programmers; Tech and outsourcing companies depend on the visas for talent
The U.S. administration began to deliver on President Donald Trump’s campaign promise to crack down on a work visa program that channels thousands of skilled overseas workers to companies across the technology industry.
Why Trump Lies
LA Times Editorial Board
Donald Trump did not invent the lie and is not even its master. Lies have oozed out of the White House for more than two centuries and out of politicians’ mouths ó out of all people’s mouths ó likely as long as there has been human speech.
Trump’s Authoritarian Vision
LA Times Editorial Board
Standing before the cheering throngs at the Republican National Convention last summer, Donald Trump bemoaned how special interests had rigged the country’s politics and its economy, leaving Americans victimized by unfair trade deals, incompetent bureaucrats and spineless leaders.
Tom Hayes and how he was caught in the Libor web; David Enrich’s book portrays the victim of a system that was happy to turn a blind eye
Ben McLannahan – FT
Tom Hayes is a tough guy to warm to. For most of The Spider Network, an absorbing account of his role at the heart of a global financial scandal, he is in a state of nervous distraction, teeing up trades and watching them wobble. On nights out with colleagues at big investment banks, he is in the corner, wearing his bumblebee socks and sipping hot chocolate. When he gets married, he rounds out his stag party with people he barely knows ó people he would later identify to prosecutors as accomplices in his huge rate-rigging scam.
ESMA proposes updates to endorsement guidelines for 3rd country credit ratings
The European Securities and Markets Authority (ESMA) has published a consultation paper (CP) on updating its Guidelines on the application of the endorsement regime under the CRA (Credit Rating Agencies) Regulation. Endorsement is a regime under the CRA Regulation, which allows credit ratings issued by a third-country CRA, and endorsed by an EU CRA, to be used for regulatory purposes in the EU. A credit rating that has been endorsed is considered to have been issued by the endorsing EU CRA. The endorsement regime is available for CRAs of systemic importance with global networks of affiliates.
Ex-financial adviser guilty of defrauding Tim Duncan
An ex-financial adviser to retired San Antonio Spurs star Tim Duncan has pleaded guilty in a multimillion-dollar fraud case and faces up to 20 years in prison.
ESMA updates MiFID II/MiFIR investor protection Q&As
The European Securities and Markets Authority (ESMA) has added 10 new Q&As to its Questions and Answers (Q&A) document on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).
ESMA scales back best execution reporting plans for 2018; Reporting for best execution may not be full and complete in first year of MiFID II’s implementation.
By Hayley McDowell – The Trade
Best execution reporting under MiFID II has been scaled back for the first year of implementation, as investment firms may not have access to “full and granular data”.
Quarterly Disciplinary Review – April 2017
FINRA Updates the Transparency Services FINRA Participant Agreement
FINRA member firms that have an obligation to report over-the-counter secondary market transactions in eligible equity and fixed income securities must submit their transaction reports to the appropriate FINRA facility and are required to complete a participant application agreement before they are given access to the facility. Facilities covered by the FINRA Transparency Services Participation Agreement (FPA) and documentation include:
Investing and Trading
Citadel Names New Commodities Head After Ken Griffin’s Stint
Agnieszka De Sousa – Bloomberg
Macquarie’s metals, agriculture co-head S. Barrack named; Hedge fund’s commodities business includes energy, agriculture
Citadel LLC, the $26 billion investment firm, appointed Sebastian Barrack as new head of commodities after billionaire founder Ken Griffin ran the unit for several months.
Evolution of the Green Bond Market
Dennis Badlyans – S&P Dow Jones Indices Indexology Blog
A few weeks ago, Martina Macpherson wrote the blog post The Rise of Green Bonds, in which she provided an overview and outlined some of the drivers behind their recent increase in issuance. Indeed, green bond issuance ramped up significantly in 2016, and the accelerated pace is expected to continue this year. Total issuance of bonds labeled as green in 2016 amounted to USD 92.9 billion, nearly doubling the size of the green bond market from the previous year (see Exhibit 1).
It’s a Big Week for One of the Most Important Debates in Markets
Patricia Laya – Bloomberg
The world will have a better idea by the end of this week, but probably no definitive answer, on whether the U.S. economy’s boom in “soft” data is being reflected in the “hard” stuff.
Dividend stocks and rising interest rates examined
Dividend-oriented US small cap stocks as reflected by the Russell 2000 Dividend Growth Index have risen in two of the last three periods of extended US interest rate increases by the Federal Open Market Committee (FOMC).
No One Knows How Big Managed Futures Is
Jeff Malec – Seeking Alpha
Trying to decipher the assets under management for the Managed Futures industry is enough to give anyone a headache. At first glance, it appears the Barclayhedge CTA Index recorded $13.3 Billion in inflows in 2016, enough to push the asset class to new all-time highs of $340 Billion in terms of assets under management, eclipsing the levels seen in the first quarter of 2013.
The Taxman Cometh for Credit Suisse
By Lionel Laurent – Bloomberg
As an international tax-evasion probe ensnares Credit Suisse Group AG, the bank says it has a “zero-tolerance” policy that’s more than just talk. Its weekend charm offensive flagged cash invested in compliance and risk controls, as well as business sacrificed by weeding out irregular clients.
Jefferies – Back to being a love machine
A missive from the executive suite. Here’s something that went out to employees and clients from Jefferies CEO Rich Handler and President Brian Friedman: Just a short year ago (almost to the day) the financial markets were spiraling out of control. Oil had plummeted to scary levels, the stock market had suffered a major correction, hedge funds and long-only investors were bleeding and facing redemptions, the leveraged loan market had screeched to a halt, and the Fed was afraid to even utter the words “interest rate increase” for fear the wheels would completely fall off the cart. What a difference a year makes.
Bank of America aims to reinvent the bricks and mortar branch; US group is planning to add more ‘robo-branches’ that are advice centres for clients
by: Ben McLannahan in New York – FT
Next time you drop into a branch of Bank of America, do not be alarmed if there is nobody there to greet you. Or if there is nobody there at all.
The World’s Top Cocoa Grower Is Headed for a Record Harvest
Isis Almeida, Baudelaire Mieu and Olivier Monnier – Bloomberg
Rain has been frequent and intense in main growing regions; Ivory Coast production to reach 2 million tons for first time
The scores of giant potholes that scar the roads from commercial capital Abidjan to Daloa in the heart of Ivory Coast’s cocoa belt have become deep, muddy puddles, filled by heavy tropical showers.
China’s Currency Takes a Twist Ahead of Trump-Xi Meeting While the yuan is down against a large basket of currencies this year, it has gained versus the dollar
Saumya Vaishampayan and Carolyn Cui – WSJ
As China’s leader prepares to head to the U.S. this week, there’s a new twist in the persistent argument that China is keeping its currency artificially low against the dollar. The yuan has recently been rising.
Frankfurt Landlords Welcome Brexit Business; Germany’s financial capital one of several European cities hoping to lure business as the U.K. prepares to exit the EU
William Wilkes and Art Patnaude – WSJ
The office market in Germany’s financial capital is emerging as one of the winners from Brexit less than a year after the U.K.’s historic vote to quit the European Union.
EU financial centres vie to poach tens of thousands of City jobs; Report says firms in Paris, Frankfurt and Dublin are lobbying their governments to match
Phillip Inman – The Guardian
London’s rival financial centres are lobbying their governments to support bids to steal tens of thousands of jobs from the City, according to a report on the impact of Brexit on the UK capital.
Gazprom reviews London operations after Brexit
by Henry Foy in Moscow – FT
Gazprom, Russia’s state-run gas group, is considering moving its trading and marketing operations out of the UK after the country leaves the EU amid fears of losing preferential access to the European market as a result of a “hard” Brexit.
EXCLUSIVE: Hedge fund millionaire who plunged to his death is mourned by family and friends – including disgraced New York governor Eliot Spitzer and a Housewives star
By Louise Boyle For Dailymail.com
The funeral of hedge fund partner Charles Murphy was attended today by Manhattan’s elite including billionaire bankers, Housewives star Dorinda Medley, and disgraced former New York governor, Eliot Spitzer.