First Read

Lack of Understanding around Disruptive Technologies Presents Opportunity for Risk Professionals
Business Wire
Risk professionals have an opportunity to close the gap when it comes to understanding and managing rapidly advancing disruptive technology risks, according to a new report published jointly today by Marsh, a leading insurance broker and risk advisor, and RIMS, the risk management society. Doing so, will increasingly require risk managers to play a leading role as their organizations address complex challenges and opportunities in this environment.

****** Managing this risk means more than just saying “no”.


Want high-quality journalism? Try paying for it.
Drew Mauck, 3Points Communications – Medium
One of the many byproducts of last year’s contentious presidential election was the rise of “fake news,” and with it came new concerns about truth in reporting and the influence fake news can have on people’s psyches. The American public has become more skeptical of stories they see in the news and in social media feeds, and with good reason, as we’ve seen plenty of mainstream news stories exposed as at best containing key inaccuracies, and at worst being completely fabricated.

****** You pay for quality journalism one way or another.


Wikipedia’s Jimmy Wales to set up global news website; ‘Wikitribune’ to use paid and citizen journalists in venture to combat fake news
by: David Bond, Media Correspondent – FT
Wikipedia founder Jimmy Wales is raising money for a global news website that will aim to help combat the proliferation of fake news.

****** Sounds a lot like Huffington Post.


Band Together 2017
April 26, 2017 at 5:15 PM
Join Tribeca Flashpoint College students in supporting the fund raising efforts of four charitable organizations in Band Together: Spring 2017’s Production-In-Action!
Sarah’s Circle, supported by “The Exceptions” (Northern Trust Bank)
Chicago Food Depository, supported by “The Wrong Boys” (Chicago Mercantile Exchange)
A Leg To Stand On, supported by “Chicago Rock Exchange” (Apple)
Daniel Murphy Scholarship Fund, supported by “Age Against the Machine” (RecClix)

**JK: The multi-talented, Apple accessorized Ray McKenzie will be performing. Come on out and support ALTSO and other great charities.


Vanilla price reaches record high after Madagascar cyclone; Price of pods used in ice cream soars as top producer grapples with damage
by: Emiko Terazono – FT
The price of vanilla has soared to a record high as Madagascar, the world’s top producer of vanilla beans, grapples with damage wrought by a cyclone.

****** There goes my ice cream cone…


Man Group hires machine learning head for stock-picking unit; UK-listed hedge fund manager is the latest big investment house to try and blend the two strategies
By Tabby Kinder – Financial News
Man Group has hired the first head of machine learning for GLG, its discretionary investment division, as part of a bet on big data and technology in trading.

****** Faster, cheaper, better, not different.


Monday’s Top Three
Our top read stories from Monday’s newsletter were led by JLN’s piece from the IOMA: World Federation of Exchanges conference The future of futures markets: Exchanges looking to fail fast. Deutsche Boerse’s Andreas Preuss introduces the idea of accelerating the pace of projects and concepts – dramatically. Second went to the Financial Times piece, Virtu’s Viola seals biggest deal with military precision. The third most read piece was Business Insider’s These are the unwritten dress codes for the major London City banks


MarketsWiki Stats
98,793,153 pages viewed; 22,466 pages; 205,432 edits
MarketsWiki Statistics


Lead Stories

Wikipedia founder Jimmy Wales launches Wikitribune, a large-scale attempt to combat fake news
Laura Hazard Owen –
Good things can happen when a crowd goes to work on trying to figure out a problem in journalism. At the same time, completely crowdsourced news investigations can go bad without oversight — as when, for example, a group of Redditors falsely accused someone of being the Boston Marathon bomber. An entirely crowdsourced investigation with nobody to oversee it or pay for it will probably go nowhere.

European Banks Seen Losing More Share Amid Bond Trading Upturn
by Stephen Morris and Nicholas Comfort – Bloomberg
American firms gain in first-quarter fixed-income, equities; Europe’s banks had lowest market share since crisis in 2016
European investment banks are set to lose more ground to U.S. rivals in fixed-income and equities trading when they report first-quarter results this week.

TRADING UP: Greifeld to Join Virtu, Susi Exits KCG
Things are afoot at KCG, now that Virtu Financial has formalized its $1.4 billion bid to buy the firm. First, former Nasdaq CEO Robert Greifeld will join the Virtu board once the deal has closed. Also, Charles Susi, KCG’s Head of Institutional Sales & Electronic Trading, has reportedly told the firm he will be leaving. Susi joined the firm in 2013 and came from UBS, where he was Global Co-Head of Direct Execution, the firm’s institutional equities electronic trading business.

Nordic bank chooses Fidessa to outsource execution technology; The bank will use Fidessa’s platform for sales and execution across its equities and derivatives business.
By Joe Parsons – The Trade
Nordic bank ABG Sundal Collier (ABGSC) has chosen to outsource its brokerage technology across equities and derivatives to Fidessa.

LME launches discussion paper on market structure
The London Metal Exchange (LME) and LME Clear are today publishing a discussion paper on the LME’s market structure which comprehensively sets out the LME’s vision and invites feedback from market participants.

Will MiFID II Destroy European Exchanges?
Larry Tabb -Tabb Forum
While a lot of time has been invested in analyzing MiFID II’s impact on research and unbundling, the impact of the regulation on European market structure perhaps will be even greater. The rules around dark pool caps and Systemic Internalizers could facilitate the disaggregation of the European equities marketplace, leaving the exchanges with order flow that no one else wants to interact with. As a result, says Larry Tabb, on-exchange spreads will widen, which will degrade the exchange/MTF flow even further and eventually diminish the value of the exchanges’ market data, co-location, and infrastructure franchises.

World’s Biggest Stock Markets Haven’t Been This Split Since 2008
Bloomberg News
Shanghai share moves are at odds with the S&P 500 index; Divergence is driven by China effort to rein in shadow banking
The Chinese and U.S. stock markets are going in opposite directions.
An intensifying crackdown against leverage in Asia’s biggest economy has rocked the hither-to unflappable Shanghai Composite Index over the past week, sending it to a three-month low last session. In the U.S., the largest equity market is embracing a risk rally spurred by the French election, with the S&P 500 Index continuing to build on reflation-trade gains ignited by Donald Trump’s November victory.

The Wrong Diagnosis
Craig Lazzara – S&P Dow Jones Indices Indexology Blog
This morning’s Wall Street Journal described how “a $1.4 billion ETF gold rush” supposedly has disturbed the pricing of mining stocks around the world. $1.4 billion turns out to be the incremental cash flow into a single exchange-traded fund designed to track an index of the gold mining industry, including some relatively small-capitalization companies. These flows, it is argued, are another illustration of how passive management is disrupting market efficiency and creating a bubble, the economic effects of which some commentators consider to be even worse than Marxism.

New rules are going to fundamentally change the business models of brokers
Richard Johnson, Greenwich Associates via Business Insider
It’s been a long time coming but MiFID II (MiFID) is almost upon us.
Most people in the industry have been aware of the impending regulations for many years, but were able to brush it aside for a variety of reasons: the implementation date is far in the future / it’s been delayed / we are waiting for further guidance / it might get delayed again … but now it has become a reality and brokers, asset managers and vendors are hurrying to comply with the directives scheduled to go into effect in January 2018.

Industry experts slam ‘arbitrary’ dark trading restrictions; ‘All-star’ panel at TradeTech agree dark trading rules under MiFID II will negatively impact the market.
By Hayley McDowell – The Trade
Senior electronic traders believe stricter caps for trading on dark venues under MiFID II will negatively impact the market by restricting the most effective method of trading.

Analyst Who Made $37,000 in an Hour Now Faces $815,000 Fine
by Gaspard Sebag – Bloomberg
Ex-Kepler analyst faced French insider-trading hearing Friday; AMF says Geoffroy Stern made 289,000 euros on 28 trades
A former equity analyst made more than 34,000 euros ($37,000) in an hour investing in Vallourec SA a day before he published a recommendation raising the French company to “outperform.” Now, he faces a 750,000 euro insider-trading fine.

Once-Flush Startups Struggle to Stay Alive as Investors Get Pickier; Funding of technology firms plummets after 2014-15 boom, forcing many in Silicon Valley to fight for survival
By Eliot Brown – WSJ
Eighteen months ago, Beepi Inc. was rapidly expanding its online used-car business to 16 U.S. cities where people could buy cut-rate vehicles adorned with giant shiny bows.

Exchanges, OTC and Clearing

Former CEO of Irish Stock Exchange Healy Dies
John D’Antona Jr. – Traders News
The European stock markets are mourning the passing of one its own. Tom Healy, who led the exchange between 1987 and 2007 has died. Healy was born in 1950 in Co.Westmeath, and served as head of the Irish Stock Exchange for 20 years. More recently, he was chief executive of the Abu Dhabi Securities Exchange (ADX) (formerly the Abu Dhabi Securities Market (ADSM), before retiring in 2010.

Turquoise welcomes first direct member firm from Switzerland to provide access to Turquoise Plato Block Discovery
London Stock Exchange Group
Vontobel is Turquoise’s first direct member firm from Switzerland to provide access to Turquoise Plato Block Discovery for its customers; Over 25 Members are participants of Turquoise Plato Block Discovery, the award winning electronic block trading mechanism; Over EUR17 billion traded via Turquoise Plato Block Discovery since launch
Vontobel, a provider of electronic execution services in the Swiss market has become Turquoise’s first direct member from Switzerland to provide direct access to Turquoise Plato Block Discovery to its customers. Vontobel joins a strong network of more than 25 international member firms that are participants of Turquoise Plato Block Discovery.

Product Modification Summary: Delisting of Five (5) RIM Refined Futures Contracts
CME Group

DTCC Names Four New Members To Board Of Directors
The Depository Trust & Clearing Corporation (DTCC) announced that four new members have been elected to its Board of Directors. The new directors are Michael Herskovitz, Director of Fixed Income Risk Operations and Technology and Co-Head of Enterprise Operational Risk at AllianceBernstein; Kathleen Lynch, Chief Operating Officer for UBS Americas and Wealth Management Americas; Umesh Subramanian, Co-Head of the Goldman Sachs Technology Division; and Lara J. Warner, Chief Compliance and Regulatory Affairs Officer at Credit Suisse and a member of the Executive Boards of Credit Suisse Group and Credit Suisse.

BSE extends trading hours for gold ETFs, sovereign gold bonds on Akshaya Tritiya
After the regular market hours from 9.15am to 3.30pm on BSE, trading in gold ETFs will resume at 4.30pm and continue till 7pm on Akshaya Tritiya

Irish Stock Exchange Quarterly Statistics show ISE attracts over 2,200 new fund and debt securities in Q1 2017
2,077 new debt listings including Ryanair, Nokia and a number of sovereign bonds

Exchanges compete for dominance in derivatives; Record trading worldwide but Japan falls behind
As derivatives trading continues to expand across the world, competition is heating up among securities exchanges vying to carve out a hefty share of this lucrative market.


Financial Markets: Embracing RegTech
TABB Group
This segment is growing quickly, with solutions offered by both incumbent and start-up vendors, the latter receiving significant venture capital (VC) investment in the last four years.
Our research confirmed that RegTech solution providers are relying on cloud-based approaches to leverage the elasticity, scalability, higher security and innovation these provide.

ITG to offer conditional order function in POSIT Europe; Conditional order type will enable buy-side to take advantage of block trading under the large-in-scale waiver.
By John Bakie – The Trade
ITG has confirmed it will offer conditional order types on its POSIT Alert dark pool in Europe.

Vela’s Jennifer Nayar named CEO of the Year in Markets Media’s Markets Choice Awards
Vela Trading Technologies, a global leader in high performance trading and market data technology, is delighted to announce that Jennifer Nayar has been voted CEO of the Year in the Markets Media Markets Choice Awards 2017.

Legacy systems: the next financial crisis?
Information Age
If banks don’t modernise, dependence on legacy mainframe systems could cause the next global financial crisis

FinTech Could Be Hurt By Fight Between OCC And States
The FinTech industry’s future could depend on the outcome of a fight between the Office of the Comptroller of the Currency (OCC) and states, according to a report in TechCrunch.

‘Nowhere Near the Web’? Blockchain Adoption Sees Debate at MIT Event
Amy Castor – Coindesk
“We are nowhere near the web yet.”
So said Neha Narula, director of research at MIT’s Digital Currency Initiative, at a one-day event hosted by the MIT FinTech Club this weekend.


Trump Tax Plan Said to Call for Corporate Rate Cut to 15%
Sahil Kapur and Shannon Pettypiece – Bloomberg
President Donald Trump will call for cutting taxes for individuals and lowering the corporate rate to 15 percent to fulfill a promise he made during his campaign, according to a White House official.

The Average Person Today Really Isn’t Rockefeller Rich
By Barry Ritholtz – Bloomberg
You are not poor; income inequality is a myth; the middle class is doing just fine. That seems to be the message coming from numerous right-leaning think tanks, websites and authors.

Trump Slaps Duty on Canada Lumber, Intensifying Trade Fight
by Jennifer Epstein and Joe Light – Bloomberg
Step will raise cost of home-building, mattress box springs; Canada vows to fight back against ‘unfair” import duties
U.S. President Donald Trump intensified a trade dispute with Canada, slapping tariffs of up to 24 percent on imported softwood lumber in a move that drew swift criticism from the Canadian government, which vowed to sue if needed.


Investment Bank VP Charged With Insider Trading
The Securities and Exchange Commission today charged a vice president in the risk management department of a New York-based investment bank with insider trading on confidential information he learned in advance of a private equity firm’s acquisition of a publicly-traded technology company.

Allianz trading chief predicts reduced execution role from banks post-MiFID II; Sell-side could provide the buy-side with more tools to achieve best execution, rather than execution services.
By Hayley McDowell – The Trade
Sell-side institutions will move away from providing the buy-side with execution services, shifting instead towards providing best execution tools, according to a panel at TradeTech.

FCA Board appoints new members to the Regulatory Decisions Committee
Press Releases Published: 25/04/2017 Last updated: 25/04/2017
The Board of the Financial Conduct Authority (FCA) has appointed an additional six members to the FCA’s Regulatory Decisions Committee (RDC).

“Expect the unexpected” – cyber security – 2017 and beyond
Speech by Nausicaa Delfas, Executive Director at the FCA, delivered at the Financial Information Security Network.

Portfolio Manager Charged With Diverting Nearly $2 Million to Personal Account
The Securities and Exchange Commission today announced fraud charges against a Massachusetts-based portfolio manager accused of diverting at least $1.95 million to his personal brokerage account from a fund over which he had trading authority.

Telecom Executives Agree to Pay Penalties for FCPA Violations
The Securities and Exchange Commission today announced that two former executives at Hungarian-based telecommunications company Magyar Telekom have agreed to pay financial penalties and accept officer-and-director bars to settle a previously-filed SEC case alleging they violated the Foreign Corrupt Practices Act (FCPA).

How Trump’s Pick for Top Antitrust Cop May Shape Competition
Makan Delrahim, the nominee for chief antitrust cop at the Justice Department, was 10 when his family immigrated to the United States from Iran as Jewish political refugees. Unable to speak English, he struggled to keep up in school. He worked afternoons and weekends at his father’s gas station near Los Angeles until college.

Investing and Trading

Index IDEA: US equities adjust their style in 2017
FTSE Russell
After a 2016 dominated by value-oriented stocks, growth-oriented US stocks have made a decisive comeback in 2017 as of April 20 according to the Russell US style indexes.

Robusta Coffee Extends Plunge That Caught Hedge Funds Unaware
by Manisha Jha – Bloomberg
Beans head for biggest five-day slump in half a decade; Hedge fund bullish bets were near a record before drop began
Robusta coffee’s biggest plunge in half a decade took hedge funds by surprise. The beans, used in instant coffee, are heading for the largest five-day slide since July 2011 in London. The drop began a day after hedge funds were near the most bullish on record and has continued even as a technical measure indicated prices were oversold.

ECB Meeting Comes at a Precarious Time for Markets
By Ben Emons – Bloomberg
The recent economic data out of the euro zone is encouraging. Production, manufacturing and confidence are robust, and inflation has stabilized. That’s not to say that there aren’t risks to the downside, such as growing populism, global geopolitical tensions, and uncertainty about sustainability of the economic recovery. To insure against these risks, the European Central Bank, which has a monetary policy meeting Thursday, has the option of boosting asset purchases.

The Bond Market Resets
By Scott Dorf – Bloomberg
I have been emphasizing how important the charts have been to the bond market, which was stuck in a five-month-long trading range that broke very convincingly two weeks ago. That’s when yields on 10-year U.S. Treasuries fell below 2.30 percent, forcing the bears to capitulate and reverse their short bets, fueling a rally that sent yields as low as 2.16 percent.

This is how many fund managers actually beat index funds; Roughly 1 in 20 actively managed domestic funds beat index funds
By MARK HULBERT – MarketWatch
Beating the market turns out to be even harder than we thought.


Why Credit Suisse needs to make friends with its investors; Rebellion over pay expected at the bank’s annual shareholder meeting
by: Patrick Jenkins – FT
Over the past fortnight, Credit Suisse has had to make a public climbdown over bonuses for top staff. It still faces the prospect that the promise to cut payouts by 40 per cent will not be enough to head off a rebellion at Friday’s annual shareholder meeting.

Credit Suisse Spends to Boost Booming Energy Team Amid Cutbacks
by Matthew Monks – Bloomberg
Swiss bank’s energy bankers brought $293M in fees last year; Team expects uptick in IPOs by U.S. oilfield services firms
Credit Suisse Group AG, two years into a belt-tightening turnaround plan, splurged a bit last month in Texas.

Fraudsters filing fake email transfers to fool brokerages; Always use two-factor authentication for email.; Consider using a broker who knows your voice on the phone.; In many cases, the customer has been made whole.
Susan Antilla – CNBC
When a customer at the Doylestown, Pennsylvania, branch of Securian Financial Services Inc. emailed to ask for a $40,000 wire transfer back in 2015, employees sprung into action.


China making full convertibility of its currency a priority, but warns US on trade barriers
Robert Delaney – South China Morning Post
Chinese government officials offered assurances on currency convertibility and easier access to its financial markets while simultaneously warning the US government about following through on threats to erect trade barriers.

bails out Pakistan with over $1bn in loans; Rising imports and falling exports and remittances pose threat of new forex crisis
by: Kiran Stacey, Farhan Bokhari and Henny Sender in Islamabad – FT
China has provided Pakistan with over $1bn in bailout loans since June last year, as the south Asian country looks to stave off a foreign currency crisis that could yet lead to another multinational rescue package.


Brexit Should Leave LSE Worried for Future Listings, Irish Say
by Peter Flanagan – Bloomberg
Irish Stock Exchange pitches for more European flotations; U.K. politicians fight to retain London as a financial hub
The U.K.’s move to leave the European Union should cause London Stock Exchange Group Plc to fear losing business to Ireland and other European markets, a senior executive at the Irish Stock Exchange said.


Politico Names Investment Banker as New CEO; Patrick Steel of FBR & Co. takes over role from political-news outlet’s owner
By Lukas I. Alpert – WSJ
Politico, the digital-news pioneer that made its name disrupting Washington’s tradition-bound media scene, is shaking up its own ranks by naming a new chief executive.

Investoo Group Acquires Leading Financial News Portal
Investoo Group, one of the world’s biggest FX trading affiliates, has acquired in order to extend its reach into the financial trading the industry.|

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