MF Global is reportedly close to a sale deal with Interactive Brokers Group.  Chi-X Australia has its first trading day, ending a 150-year single-exchange dominance in that country.  The TMX Group board enters an agreement of support with Maple Group. And in banking, Barclays posts good returns; Goldman Sachs elects a new board member; and German finance minister Wolfgang Schäuble is looking forward to the explanation as to how “bad bank” FMS Wert-management miscalculated 55 billion euros worth of debt.

Shadow banking returns to full strength despite regulators’ efforts to control it.  Brazil’s Bovespa-index futures appear to be headed for Hong Kong visibility next year.  ISDA reports that the voluntary Greek haircut event won’t be a credit default event.  MF Global’s woes extend with Junk credit ratings and alleged difficulty in finding a friendly buyer.  And in the “good news for Friday” department, JP Morgan and other banks, possibly not wanting to “do a Netflix”, are pulling back from plans to institute extra debit card transaction fees.

Europe agrees to a comprehensive stopgap debt crisis management plan, designed to once-and-for-all create some breathing room until a better idea can be developed.  Down Under, the ASX resumes trading following a freeze-up just days from the start of its new competitor Chi-X. DB-NYSE-Euronext prepares for its deal defense today with regulators, and NYSE Euronext announces a plan to buy back its stock.  MF Global tries to find something positive to say about its current business course.  The JLN Options Newsletter this week has an interview with Jeff Soule, head of market data for the ISE; a preview of that is found in today’s top section.

Nasdaq OMX announces plans to start up a London-based derivatives platform, and nabs social media listings in the U.S. The SEC considers softening its stance on requiring large amounts of confidential data from hedge funds.  Banks pledge to be ethical in the future, and UBS and Credit Suisse (both of which are banks) are fined millions by FINRA and the FSA respectively.  The top box of the newsletter features JLN interviews with Keizo Goto of the Financial Futures Association of Japan; Alice Botis of Fidessa; and Lauren Teigland-Hunt of Teigland-Hunt LLP.  Sovereign “Hot Potato”, FX commentary by Doug Ashburn, rounds out the section.

Lauren Teigland-Hunt is managing director of Teigland-Hunt LLP, a law firm based in New York which focuses on U.S. commodities law and regulation. She advises financial institutions and buy side firms on regulatory issues related to derivative transactions and acts as counsel to several ISDA drafting committees. John Lothian News Editor-in-Chief Jim Kharouf spoke with Teigland-Hunt about documentation standards for cleared swap transactions (Section 731 of the Dodd-Frank Act), the FCM “agency model” imposed by sections 723 and 724 of the Dodd-Frank Act, and the first iteration of a standard execution agreement for cleared swaps, released by FIA and ISDA in June 2011.

Share volume on dark pools have dropped in favor of lit venues.  MF Global reports larger losses, and questions are raised about its recovery strategy and credit worthiness. In Europe, the EU proposes tougher-than-expected valuations on Greek debt, and hand-wringing over recapitalization continues.  Man Group suggests that hedge funds may see increasing redemptions following recent losses.  The Occupy phenomenon continues to occupy the blogosphere, as commentators try to categorize it and make sense of it, and comment-section mavens follow along with their own special brand of wisdom. Plus video interviews with Lauren Teigland-Hunt of Teigland-Hunt LLP and Alice Botis of Fidessa.

Alice Botis‘ experience spans from being the first female NASDAQ market maker to heading up Latin American business development for Fidessa. She sat down with John Lothian News editor Jessica Titlebaum to discuss the high frequency trading environment in Latin America, how the MILA initiative (otherwise known as the Integrated Latin American Market) is impacting growth in the region and how the industry has changed for women in this global marketplace.

Mark Wetjen has been approved to serve as CFTC Commissioner; and at the SEC, Daniel M. Gallagher and incumbent Luis A. Aguilar have also been approved. Nasdaq OMX has announced a deal with Chilean exchange BEC to provide technology and advice. U.S. banking regulators are trying to keep up with Basel deadlines. Greek default risk looms as large as ever in Europe, and around the world, intense discussions continue unabated over recent regulatory announcements.

The EC’s MiFID II rules received a mixed response from the financial world. Deutsche Börse and NYSE Euronext are given an extra week to give the European Commission additional good reasons to allow the merger to proceed. The EU also outlined plans to revise the power and structure of rating agencies.  In the U.S., more bank quarterly results are in, Occupy Wall Street and bank bonuses lurk just beneath the non-financial blockbuster headlines, and Judge Rakoff gets a chance to make fun of Citigroup and the S.E.C. without admitting or denying a sense of delight. Jessica Titlebaum speaks with Interactive Data 7ticks at the 2011 FIA Expo. 

by John J. Lothian

Commissioner Bart Chilton says, in defense of position limits that, “While I’d have an even tougher rule in many respects if I were the only author, this is nonetheless a very strong, needed and imperative rule to ensure more efficient and effective markets devoid of fraud, abuse and importantly, manipulation. This rule balances the needs of consumers and market participants alike.”

Dear Mr. Chilton:

While you think that the position limits rule will ensure more efficient and effective markets “devoid of fraud, abuse and importantly, manipulation,” you are DEAD WRONG.  We have long had laws outlawing murder (see the Ten Commandments), but that does not mean our world is devoid of murder and murderers.  But that issue is not even my chief beef with you today.  We both agree on the need for efficient and effective markets. However your view of an “effective” market is one that balances the needs of consumer and market participants alike is off base.

Futures markets are about price discovery and risk transfer.  They are not about protecting consumers from price movements, except for allocating supply over time so we don’t have the boom and bust cycles of surpluses and shortages resulting from the seasonal influences of the growing seasons.