To Skirt Stricter CFTC Rules; Wall Street Joins CME In Winning Delays Of U.S. CFTC Swaps Rules
NYSE Euronext plans to create a trading service for retail investors that would execute trades separately from high-frequency and long-term institutional traders. CME Group and ICE seek ways to realign their energy swaps products to avoid new, stricter regulations. Many financial players gained delays and exemptions from new CFTC rules scheduled to take effect.
FactRight Webinar Recording: “When Money Goes Missing”
FactRight, LLC, a leading provider of independent research, due diligence and risk management services for the alternative investments industry, invites you to listen to our recorded webinar,
“When Money Goes Missing”.
To listen to the recording of the webinar
When Money Goes Missing, please
In this recorded webinar, hear interesting details concerning recent high-profile securities industry frauds. Listen as industry experts, John Lothian and Kelly Richmond Pope, discuss how the MF Global and PFGBest financial frauds were perpetrated, what regulators could have done to prevent or discover the fraud, and where red flags were missed.
**** This is the webinar that I was set to do, but had technical difficulties. We pre-recorded the webinar this time to avoid that.
ROCKTOBERFEST: Check Out The Star-Studded Event That Had Hedge Funders Rocking Out For Charity This Week
ALTSO, which provides prosthetic limbs and corrective surgeries to children with limb disabilities in developing countries, was co-founded by hedge fund manager C. Mead Welles, the CEO of Octagon Asset Management, back in 2002.
** And check out ALTSO co-founder Mead Welles’ moving story at – http://jlne.ws/P1Zb1H. The Chicago event is coming up on Oct. 25 at 7 p.m.
ICE and Traiana announce extension of ICE Link to OTC FX
IntercontinentalExchange, a leading operator of global markets and clearing houses and Traiana, the leading provider of post-trade solutions, today announced an agreement to process over-the counter (OTC) foreign exchange contracts via ICE Link, ICE’s market leading middleware service.
Changes to clearing credit default swaps
FT Trading Room
G20 regulations are forcing deep-rooted change in the vast over-the-counter derivatives market with mandatory clearing of swaps. One of the biggest products to be affected are credit default swaps. Clive de Ruig, head of ICE Link, which processes CDS trades, explains the changes.
With Profits Dropping, High-Speed Trading Cools Down
NATHANIEL POPPER – NYTimes.com
The hottest new thing on Wall Street is cooling down. High-frequency trading firms — the lightning-quick, computerized companies that have risen in the last decade to dominate the nation’s stock market — are now struggling to hold onto their gains.
**** This is called over fishing.
America’s financial system: Law and disorder
A STAFFER at a federal agency says he is often asked how many entities investigate and prosecute financial firms in America. The only short answer he can give is: “a lot”. Here’s a longer one.
***** Another uplifting story for a Monday morning.
Why hedge-fund operator Citadel is becoming a stockbroker
Lynne Marek – Crain’s Chicago Business
Citadel LLC is best-known in Chicago for operating the city’s biggest hedge fund. But it has quietly become a behemoth broker that handled more share volume on the Nasdaq Stock Market in September than any other firm.
The SEC Is Building A New $2.5 Million System To Track Market Data In Real Time — Here’s Why It’s Child’s Play
This week, the S.E.C. announced that it had contracted Tradeworx, a high frequency trading firm, to build it software that would allow the regulator to track stock market data in real time. In short: They want to be armed with the same weapons as sophisticated HFT firms.
***** Good luck with that.
U.S. Corporate Governance Grows Up
JOHN BUSSEY – WSJ.com
Watching recent missteps by boards of directors, it’s difficult to imagine that governance in corporate America is actually getting better, not worse. But take heart. By several measures—including board independence and elections—governance is improving, albeit slowly.
UPDATE: SEC Inspector Javert Earns $1.8 Million Interest On $78,000 Judgment
Starting from the Disco year of 1976 and running through 1982, the Securities and Exchange Commission alleged that James L. Douglas a/k/a James L. Cooper had offered and sold over $7.5 million of purported oil and gas program interests in at least 45 limited and general partnerships to over 300 investors.
**** Maybe it is me, but it sounds like there is something wrong with this.
Fidessa at FIA
Don’t be tricked by other solutions. Visit booth #913 in the South East Hall to enjoy Halloween treats and a demonstration of our futures and options trading and risk management platform. Fidessa provides a fully automated multi-asset workflow along with high-speed access to the leading global derivatives exchanges. With superior order management and intuitive workflow, Fidessa makes derivatives trading less scary. Fidessa // Trade, Invest, Inform.
And this is the link for our complimentary exhibit hall passes:
FIA Expo 2012 Complimentary Exhibits-Only Passes from John Lothian News Sponsors:
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
29,547,136 pages viewed, 7,151 articles, 148,622 edits
NYSE Euronext to offer new retail service
Philip Stafford – FT.com
Retail investors in Europe are to be offered their own service, separate from those used by high-frequency trading firms and long-term institutional investors, under a proposal developed by NYSE Euronext, the exchanges operator.
CME, ICE trying to recast energy swaps as futures to skirt stricter CFTC rules
Ann Saphir – Reuters
Two of the world’s top commodity exchange powerhouses are scrambling to turn new regulations to their advantage in an important but largely hidden piece of their business, the trading and clearing of energy swaps.
Wall Street Joins CME in Winning Delays of U.S. CFTC Swaps Rules
Silla Brush and Matthew Leising – Bloomberg
CME Group Inc., energy traders and Wall Street banks won delays and exemptions from the U.S. Commodity Futures Trading Commission as regulations intended to improve oversight of the swaps market began to take effect.
Global Economy Distress 3.0 Looms as Emerging Markets Falter
Simon Kennedy – Bloomberg
The global economy is facing its third major brake on expansion in five years as emerging markets slow from China to Brazil, provoking debate about how much policy makers should respond.
Mifid II set for an early arrival
Pauline Skypala – FT.com
New European-wide market conduct rules, including measures to limit financial sector involvement in commodity markets, could be in place by 2014, earlier than expected.
India’s NSE May Set Trading Limit on Large Stocks, Eyes Listing
ARIES POON – WSJ.com
India’s bourses are working with the country’s stock-exchange regulator to prevent a recurrence of the “flash crash” this month that briefly shaved as much as $70 billion off the value of some of the country’s largest listed companies, National Stock Exchange Chief Executive Ravi Narain said Sunday.
Spanish aid request from euro zone seen in November
Reuters via Yahoo! News
TOKYO – Spain could ask for financial aid from the euro zone next month and if it does the request would likely be dealt with alongside a revised loan program for Greece and a bailout for Cyprus in one big package, euro zone officials said.
Euro zone mulls new ways to cut Greek debt
Euro zone officials are considering new ways to reduce Greece’s huge debt because delays in reforms by Athens and continued recession have put the target of 120 percent debt to GDP ratio in 2020 out of reach, euro zone officials said.
IMF Chief Economist Says Global Economy Will Take Decades to Recover
SUDEEP REDDY, BRIAN BLACKSTONE AND BOB DAVIS – WSJ.com
A weekend gathering of the world’s top finance officials deepened conflicts among some of the largest economies, raising fresh doubts about their ability to find big steps quickly to boost the flagging global recovery.
The Speculators Win a Round
The foes of Dodd-Frank financial reform scored a victory recently when a federal court overturned a new rule to limit speculative trading in derivatives.
Bair Says Money Funds Are Systemic Risk SEC Must Regulate
Sheila Bair, former chairman of the Federal Deposit Insurance Corp., said the $2.5 trillion money- market mutual fund industry poses a potential risk to the financial system and the U.S. Securities and Exchange Commission should take responsibility for regulating it.
Sheila Bair’s Big Questions About Bank Bailouts
New York Times
Sheila C. Bair, the former F.D.I.C. chairwoman and author of a new book on the financial crisis, is well positioned to challenge the dogma of bank bailouts.
CFTC’s Division of Swap Dealer and Intermediary Oversight Issues No-Action Letter Regarding the Swaps Calculation by Certain Foreign Entities for Purposes of the Swap Dealer and Major Swap Participant Definitions
The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter addressing the swap calculation by certain foreign entities of swaps for purposes of the swap dealer and major swap participant definitions.
CFTC Division of Swap Dealer and Intermediary Oversight Issues Letter Providing Time-Limited No-action Relief with Respect to Foreign Exchange Forwards and Foreign Exchange Swaps
Today, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight is issuing a letter providing time-limited no-action relief from the obligation to include any foreign exchange swap or foreign exchange forward for purposes of determining if a person is a major swap participant, or the calculation to determine if an entity is a swap dealer if the Secretary of the Treasury determines at a later date to exempt such swaps or forwards from the definition of the term “swap” under the Commodity Exchange Act (“CEA”).
CFTC’s Division of Swap Dealer and Intermediary Oversight Issues Time-Limited No-Action Letter Regarding the Treatment of Agricultural and Exempt Commodities in Making Calculations for Purposes of the Swap Dealer and Major Swap Participant Definitions
The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter regarding the treatment of agricultural and exempt commodities in making calculations for purposes of the swap dealer and major swap participant definitions.
CFTC Division Of Swap Dealer And Intermediary Oversight Issues No-Action Letter Regarding the De Minimis Threshold For Swaps With Utility Special Entities
Statement Regarding Commission Relief Allows CME Market Participants To Transition Trading Activity Under More Reasonable Timeline, CFTC Commissioner Scott D. O’Malia
[France] The AMF applies the ESMA guidelines on the suitability requirements for financial services and products provided to clients pursuant to the MiFID directive
[France] AMF Position 2012-13 – Suitability requirements for financial services and products provided to clients
[Japan] FSA publishes Weekly Review No.16
New Zealand’s Financial Markets Authority Issues Guidance On KiwiSaver Sales And Distribution
TOM MTF Statistics Week 41
Exchanges & Trading Facilities
MGEX Announces Information Exchange Website
MGEX, a Designated Contract Market (DCM) and Derivatives ClearingOrganization (DCO), is pleased to announce the launch date of October 26, 2012 for the MGEX Information Xchange (MIX). The MIX is an accessible website forum offering registered users a public venue to anonymously discuss trading and market information within the MGEX marketplace.
[CBOE] Trader E-News
Workday Soars 74% in Debut
WILLIAM ALDEN – NYTimes.com
Some newly public stocks are experiencing that one-day pop. Workday, the software company, opened 72 percent above its offering price of $28 in its debut on Friday, on heavy trading volume. The stock closed the day at $48.69, up nearly 74 percent on its first day.
Workday, Inc. Celebrates Initial Public Offering and First Day of Trading on the New York Stock Exchange
ISE Weekly Listings October 12, 2012
Toronto Stock Exchange And TSX Venture Exchange Continue 2012 Canadian Financing Series In Edmonton
Toronto Stock Exchange and TSX Venture Exchange will continue their 2012 Canadian Financing Series, “A Growth Platform for Canadian Entrepreneurs,” in Edmonton on Tuesday, October 16, 2012.
N2EX Passes 100,000 GWh Total Cleared Physical Volumes For 2012
Participation and volumes on N2EX, the UK power market offering jointly operated by NASDAQ OMX Commodities and Nord Pool Spot, continue to accelerate with recent weekly totals consistently in excess of 3000 GWh, equivalent to 50% of total UK supply.
RETAIL INVESTORS TO BENEFIT FROM IMPROVED EXECUTION PRICES ON EUROPEAN EQUITY TRADES ON A FULLY TRANSPARENT FACILITY
Amsterdam, Brussels, Lisbon and Paris – 15th October 2012 – NYSE Euronext (NYX) today announced the launch of a Retail Matching Facility (RMF) on its European regulated cash markets¹, a new service which enables Retail Liquidity Providers to offer price improvements to retail investors. This initiative, which meets all pre- and post-trade MiFID requirements, will be available as of mid- January 2013.
Hedge Funds & Managed Futures
GLG trio sit on $220m Man loss
Sam Jones – FT.com
Three principals of hedge fund GLG Partners are sitting on a $220m paper loss two years on from their firm’s acquisition by Man Group in the industry’s biggest merger.
HSBC Said to End Administration Ties With Some Hedge Funds
Tomoko Yamazaki and Bei Hu – Bloomberg
HSBC Holdings Plc (HSBA), the administrator of $150 billion in assets for hedge funds, is terminating agreements with some smaller Asian clients to focus on more profitable ones, said three people with knowledge of the matter. One of the termination notices, reviewed by Bloomberg News, outlined when the bank will stop providing its services. The letter didn’t give a reason for HSBC’s decision.
Caxton Associates to Lower Fees on Macro Hedge Fund
JULIET CHUNG – WSJ.com
Caxton Associates LP plans to lower the fees it charges clients of its $7.5 billion hedge fund, a sign that even veteran money managers are bowing to investor pressure amid lackluster returns and low interest rates.
Hedge Fund RoundKeep Capital to Close
Wall Street Journal Blogs
RoundKeep Capital Advisors LLC, a hedge-fund firm launched by a former Citadel Investment Group LLC executive, plans to shut down amid a dearth of investment opportunities for the money manager, according to a letter sent to investors as well as people familiar with the firm.
Brevan Howard Said to Consider Leasing New London Office Space
Brevan Howard Asset Management LLP, Europe’s second-largest hedge fund, is considering leasing a new office in London, according to a person with knowledge of the matter.
Citigroup, Barclays Ex-Bond Trading Heads To Set Up Credit Fund-Bloomberg
The former heads of high-yield trading at Citigroup Inc. and Barclays Plc, Christopher Yanney and K.C. Baer, are setting up a new credit-investment company CKC Capital LLC, Bloomberg reported Friday.
Argentine Lobby Mystifies ‘Members’
IANTHE JEANNE DUGAN – WSJ.com
When a New York hedge fund detained an Argentine naval training ship in Ghana earlier this month, it called international attention to a lobbying group at the center of a high-stakes financial tug of war. How Larry Matlack, a Kansas farmer, became affiliated with the group is a mystery to him.
Democrats Better for U.S. Bonds Since LBJ Beat Goldwater
Susanne Walker and Daniel Kruger – Bloomberg
The idea that Democrats are big spenders and bad for bonds while Republicans are deficit hawks is being turned on its head in the $10.8 trillion market for U.S. Treasury securities.
BMO selects Milestone Group for NAV control and distribution processing
Milestone Group, the specialist provider of optimized fund processing solutions to the global funds industry, has today announced that BMO Financial Group (BMO) has selected its pControl platform to automate the management and control of its NAV production and validation processes as well as distribution processing.
CFTC.Gov Commitments of Traders Reports Update
Communique Of The Twenty-Sixth Meeting Of The International Financial And Monetary Committee (IMFC) – Chaired By Mr. Tharman Shanmugaratnam, Deputy Prime Minister Of Singapore And Minister For Finance
Statement By U.S. Treasury Secretary Tim Geithner At The International Monetary And Financial Committee (IMFC) Meeting
Banks & Brokers
UBS May Cut Thousands of IT Jobs, Says Report
UBS AG is planning further cost cutting measures which could threaten thousands of jobs worldwide, particularly in its information technology operation, the TagesAnzeiger reported Saturday.
US woman takes on banks over Libor
Caroline Binham in London – FT.com
A pensioner whose home was repossessed is taking on some of the world’s leading banks in the first known class-action lawsuit claiming that alleged Libor manipulation made mortgage repayments for thousands of Americans more expensive than they should have been.
JPMorgan Deploys New Risk Model for Derivative Bet
Michael J. Moore, Dawn Kopecki and Bradley Keoun – Bloomberg
JPMorgan Chase & Co. (JPM), whose trading loss of more than $6.2 billion was fueled by the adoption of a flawed mathematical formula that understated the risks, is trying yet another one. JPMorgan said today it started using a new formula to judge the risk of the derivatives position, at least the third such model it’s used this year, when it moved most of the contracts to the investment-bank unit
J.P. Morgan, Wells Fargo: Housing Is on Mend
DAN FITZPATRICK AND SHAYNDI RAICE – WSJ.com
Two of the nation’s largest banks released third-quarter results that suggest the U.S. housing market, a key factor in the nation’s economic performance, is bouncing back as mortgage rates hit record lows and home refinancings surge.
RBS Says Santander Drops 1.7 Billion-Pound Purchase of Branches
Royal Bank of Scotland Group Plc , Britain’s biggest government-owned bank, said Spain ’s Banco Santander SA withdrew from an agreement to buy 316 branches, a deal that was valued at about 1.7 billion pounds.
Royal Bank Of Scotland Made Excellent Progress Towards EC Obligations
Royal Bank of Scotland Group PLC, which is 83% owned by the U.K. Government, said Monday it has made excellent progress towards meeting its EC obligations and either completed or made significant progress on a number of other EC mandated disposals.
RBS Seeks Asset Protection Scheme Exit
MAX COLCHESTER AND MARGOT PATRICK – WSJ.com
Royal Bank of Scotland Group PLC hopes to announce its exit from a costly government asset insurance program next week, as the state controlled lender looks to take another step toward private ownership.
JPMorgan cuts banker pay, a sign of more frugal times on Wall Street
Reuters via Yahoo! News
JPMorgan Chase & Co’s investment bank set aside less revenue to pay employees last quarter, another sign that Wall Street bonuses are on the decline this year. The investment bank put aside $2.07 billion for pay in the third quarter, or 32 percent of net revenue excluding a special accounting charge.
A.C.L.U. to Sue Morgan Stanley Over Mortgage Loans
New York Times
In a complaint expected to be filed Monday, the American Civil Liberties Union is accusing Morgan Stanley of fueling the production of risky, expensive loans that targeted African-American borrowers.
Goldman Sachs Declares Preferred Stock Dividends
The Goldman Sachs Group, Inc. today announced that it has declared dividends on the following series of its non-cumulative preferred stock (represented by depositary shares, each representing a 1/1,000th interest in a share of preferred stock):
Clearing & Settlement
More than 100,000 investment funds available through Clearstream
Clearstream now offers more than 100,000 investment funds (fund ISINs) on its order routing platform Vestima. The company reached this landmark at the beginning of October. Vestima delivers a suite of services supporting the cross-border distribution of investment funds and offers a single point of access to multiple execution venues around the globe
CME Group Issues a Market Regulation Advisory Notice for CME ClearPort
CME Group, the world’s leading and most diverse derivatives marketplace, released a Market Regulation Advisory Notice today about CME ClearPort.
CME Clearing – Performance Bond Requirements – NYMEX New Products – Effective Friday, October 12, 2012
CME Group Clearing Advisory: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (OR) Effective Monday, October 15, 2012
CME Clearing – New Product Advisory: 2.5 MWh Daily Power Products
Indexes & Products
S&P Dow Jones Indices Announces Quarterly Index Reviews
Algo Trading Gets Tech Upgrades
Markets Media highlights the RTS introduction of Tango OnDemand and talks to RTS’ Timo Pentner, Managing Director Americas, about the benefits the product brings to clients.
Integral Selected to Launch Wells Fargo’s New FX Platform
Integral Development Corp. (www.integral.com), a leading provider of FX trading solutions and services, announced today it was selected by Wells Fargo & Company (NYSE: WFC [FREE Stock Trend Analysis]), to launch Wells Fargo’s new FX pricing service. The platform allows Wells Fargo to electronically access liquidity directly and indirectly from over 50 sources, including market making banks, ECNs and professional trading firms.
Barclays Bank PLC pays $80,000 infringement notice penalty
Norfolk man charged with fraud from hedge fund
A Norfolk man appeared in court Friday on fraud charges involving the management of a Newport News-based hedge fund.
Gupta’s Admirers Urge Mercy as Insider Sentence Nears
Microsoft Corp. Chairman Bill Gates and former United Nations Secretary-General Kofi Annan were among supporters of ex- Goldman Sachs Group Inc. director Rajat Gupta who urged mercy at his sentencing next week for his part in the biggest hedge fund insider trading scheme in U.S. history.
Environmental & Energy
Carbon trading in China could secure global climate deal
China’s forthcoming carbon trading pilot scheme could dovetail with other global platforms, paving the way for a global climate change agreement coming into force in 2020, according to a new report launched today.
**RKB – Continuation of last week’s coverage looking at market progress in China.
Outback carbon farming venture faces shake-up
An ambitious $13 million “learning by doing” carbon trading venture at a former cattle station in the Northern Territory is going back to school.
Barclays Raises 2013-2020 EU Carbon Permit Price Forecast by 13%
Barclays Plc raised its price estimate for European Union carbon permits in the third phase of the bloc’s carbon market by 13 percent, citing plans to delay auctioning some allowances from next year.
New rules, tough talk as Singapore seeks to end tax haven image
Reuters via Yahoo! News
SINGAPORE – Billionaire Australians buying exclusive condominiums. Germans moving money from Swiss accounts. Secretive banking laws. Asia’s premier wealth management centre. Low tax rates. As Singapore revels in its reputation as an open economy with the world’s highest concentration of millionaires, the tiny island of 5.3 million people is also accused of being a magnet for tax evaders – an image it is vehemently seeking to banish.
Singapore Can’t Use Exchange Rate to Manage Export Competitiveness – Minister
Singapore can’t use the exchange rate to manage the competitiveness of its exports, the trade minister said Monday, even as the central bank uses the stronger local dollar to mitigate the impact of inflation.
ASEAN Exchanges unveils key milestones in the development of the ASEAN asset class
ASEAN Exchanges, a collaboration of the seven stock exchanges of ASEAN, today unveiled several key milestones in the development of the ASEAN asset class. The announcement was made by the seven CEOs of the ASEAN Exchanges at a press conference at the World Federation of Exchanges 52nd General Assembly and Annual Meeting today.
Malaysia’s Capital Market Drivers Invite Hong Kong Investors To Capitalise On Asean’s Multinational Marketplace – Invest Malaysia Hong Kong 2012 Brings Top Performing Malaysian Public Listed Companies To Hong Kong For Investment Discussions With Fund Managers
SGX welcomes Courts to Mainboard
5 New Names To Be Listed On The Tokyo Stock Exchange Individual Securities Options Market
S.Africa may revisit growth outlook after strikes: central bank
Reuters via Yahoo! News
JOHANNESBURG – South Africa’s growth forecasts will likely need to be revisited given the impact of widening labour unrest on Africa’s biggest economy, the central bank’s deputy governor, Daniel Mminele said in a speech on Sunday.
BofA names MENA investment banking co-heads
Reuters via Yahoo! News
DUBAI – Bank of America Merrill Lynch has appointed co-heads for its corporate and investment banking business in the Middle East and North Africa, it said on Monday, as part of a move to integrate the two businesses in key emerging markets.
Tehran Stock Exchange Monthly Bulletin – September 2012
For 20 trading days in September 2012, TSE evidenced transactions in 7221 million shares and rights worth $ 1654 million. These figures demonstrate 105 and 173increase for the volume and value of trades, respectively compared to the previous month.
MCX Weekly Market Report (October 05, 2012 – October 11, 2012)