Industry news

Date: Dec 4, 2012

December 4, 2012: S.E.C. Charges 5 Firms Over Audits in China; NYSE Liffe readies for OTC shake-up; Exchanges to Ask SEC to Delay Deadline for Audit Trail Program

The SEC takes aim at Chinese accounting firms affiliated with big US auditors, who are said to be uncooperative with the SEC in investigating firms. NYSE Liffe aligns itself with a derivatives overhaul, and prepares to allow certain block trades to be done OTC style. US market operators intend to ask the SEC for more time to make a plan for a market oversight system. In First Read today, take a look at Part 3 of JLN’s Restoring Customer Confidence series; Gary DeWaal of Newedge points toward China’s Futures Margin Monitoring Center as a model for tracking the disposition of segregated funds. And the second part of the interview with Todd Fulton of Pioneer Futures is here; he discusses the industry impact of emerging managers, the current fee structure in the managed futures space, and the future for the sector.

First Read

New Restoring Customer Confidence Video
The third video in our Restoring Customer Confidence series deals with confirmation of segregated funds. Each week we will post a new idea answering the question – how do you restore customer confidence and bring traders back?

Restoring Customer Confidence More ideas»
Confirmations: Made in China - Gary DeWaal

Confirmations: Made in China

Gary DeWaal, group general counsel at Newedge, noted that Peregrine Financial Group (PFG) was able to dodge regulatory audit checks of its customer segregated funds for more than 20 years. DeWaal says that simply wouldn’t happen if the US adopted the system used in China’s futures markets called the China Futures Margin Monitoring Center Co. Ltd. (CFMMC). In November 2012, the National Futures Association and CME Group did just that, hiring AlphaMetrix to take on the job of confirming the money FCMs say they have in their segregated accounts, with money that is held at the bank.

In this video, a simple animation and interview with DeWaal help explain the CFMMC model.

Watch the video »

This video is sponsored by:


About the Restoring Customer Confidence video series
In the aftermath of the MF Global collapse, fraud at Peregrine Financial Group and high profile high-frequency trading shocks, John Lothian News asks – how do you restore customer confidence and bring traders back?

The Restoring Customer Confidence video series answers that question by exploring potential solutions using expert interviews and simple animations.

John Lothian News interviewed more than a dozen professionals in the industry to get their ideas and solutions. As these ideas become practice, or as new concepts are adopted by the industry, we will continue to add them to the site.

Visit the video series page on over the next several weeks for new ideas and solutions.


Jonathan Auerbach, Broker at Investing Frontiers, Dies at 70
Laurence Arnold – Bloomberg
Jonathan L. Auerbach, who explored new frontiers for investors as co-founder of Auerbach Grayson & Co., a brokerage that specializes in international trading, has died. He was 70. He died on Nov. 29 at Beth Israel Medical Center in New York, his co-managing director, David Grayson, said today in an interview. The cause was lung cancer, which had been diagnosed in September.

**** A real pioneer.


Ed Boyle to Join BOX as SVP in January
BY John Lothian Newsletter
John Lothian News has learned that senior derivatives industry executive Ed Boyle will be joining The Boston Options Exchange (BOX) as a senior vice president of business development and strategy. Boyle, the former head of NYSE’s Arca exchange and more recently an executive with GETCO, has been acting as a consultant for BOX for the last month. Last month, Boyle was named to the Advisory Committee of John J. Lothian & Company, Inc. Additionally, he serves on the advisory board of OptionsCity Software, Inc.

**** A JLN exclusive report.


High Frequency Trading Arms Race Has Plenty of Drawbacks
Scott Patterson – MarketBeat – WSJ
A new paper co-written by the chief economist of the Commodity Futures Trading Commission calls into question the turbocharged arms race behind the controversial practice of high-frequency trading.

**** An arms race is a waste of human and technological resources. OK, but what does that have to do with market quality.


Todd Fulton

Todd Fulton of Pioneer Futures on CTA Fees, Capacity Caps and Managed Futures Mutual Funds (Part 2/2)

Todd Fulton, vice president, managed futures at Pioneer Futures, has been around the CTA space for more than 20 years. In Part 2 of our conversation, he spoke with JLN Managed Futures editor Jim Kharouf about emerging managers’ impact on the managed futures space as well as the effect of capacity caps have on various funds. He also discussed how flexible CTAs can be on fees. Fulton says some clients can get ‘zero and 25’ fee structures. And he discussed the potential for managed futures mutual funds, the plusses and questions that still remain for that product.

Watch the video »

Also see: Todd Fulton of Pioneer Futures on What Investors Want in Emerging Managers (Part 1 of 2)


Record-Breaking Volume for Month of November at the KCBT
During the month of November, the Kansas City Board of Trade HRW wheat futures contract and the exchange as a whole broke all previous November monthly volume records. The previous record for HRW wheat futures was 602,081 contracts in 2010. The previous record for total exchange volume was 624,481 contracts, also in 2010. Increased volume was attributed to the roll of December positions into outer months and weather-related factors in the marketplace, according to traders.

**** Selling at the top, now there are some good traders.


OneChicago Announces Trading Volume for November 2012 – Volume in November up 35% as compared to the same period in 2011
OneChicago, LLC (OCX), an equity finance exchange, today announced that November 2012 volume of 481,724 was up 13% over October 2012.

**** Yeehaaa!!! Every exchange CEO should sit on an exercise ball at his desk if this is the results they would get.


Total VIX Futures Volume Reaches New All-Time High In November
The CBOE Futures Exchange, LLC (CFE) announced today that total monthly trading volume in futures on the CBOE Volatility Index (VIX) reached an all-time high for a third consecutive month in November 2012. The record trading activity in VIX futures also drove total volume at CFE to a new all-time high.

**** Volume records spilled over into record high temperatures yesterday in Chicago.


CBOE Holdings Reports November 2012 Consolidated Trading Volume
November 2012 average daily volume (ADV) for the three exchanges, combined, was 4.35 million contracts, a two-percent increase from 4.27 million contracts ADV in November 2011, and a six-percent increase from nearly 4.09 million contracts ADV in October 2012.

**** Increases in volume are so in these days.


CFE To Launch S&P 500 Variance Futures On December 10
CBOE Futures Exchange, LLC (CFE) announced today that it plans to launch trading in S&P 500 Variance futures on Monday, December 10. The S&P 500 Variance futures contract, like over-the-counter (OTC) variance swaps, allows users to trade the difference between the implied and realized variance of the S&P 500 Index.

**** Your results trading this new product may vary widely.


New York futures broker fined $650,000 for not segregating funds
A federal court has ordered a futures brokerage run by well-known New York trader Mark Fisher to pay $650,000 for not properly segregating customer funds following a complaint filed by the country’s top commodity regulator.

**** Mark Fisher of MBF Clearing has a long and interesting history with the CFTC, but this time turns out differently.


Merge the EPA and FERC!
Philip McBride Johnson – FOW
The Environmental Protection Agency and the Federal Energy Regulatory Commission in the United States share a common interest in energy, one to minimize its polluting effect and the other to promote fair practices and stable growth. Let’s merge them! That idea, but involving the Securities and Exchange Commission and the Commodity Futures Trading Commission, has been proposed (again!) by two members of the US Congress with roughly the same level of analysis.

***** Mergers work best when there is a common culture. The CFTC is just not into the stuff the SEC is into.


Meal ticket for commodity traders ends
Gregory Meyer –
An old joke in the commodities world was that futures traders never took holidays between the fifth and ninth business days of each month. Why? Because that is when money tracking commodity indices sell expiring futures contracts and replace them with new ones. Front-running the so-called “index roll” became a monthly meal ticket for active traders.

**** Greg, Greg, Greg. Really, you call this front-running? If everyone knows it, is it really front-running?


Court withdraws win for BNY Mellon in Sentinel case
A federal appeals court in the United States has withdrawn a ruling that put Bank of New York Mellon Corp (BK) ahead of former customers of Sentinel Management Group seeking to recoup money lost in the futures broker’s 2007 collapse.

**** This would appear to be some good news for customers. I am sure there is more complexity to the story though.


Position limits split traders and regulators
Madison Marriage –
The debate around commodities speculation is proving a heavy burden for asset managers and investors worldwide as they struggle to cope with slow-burning regulation. Regulators in the US and Europe have paid close attention to commodities trading since the 2008 financial crisis as food shortages and soaring oil prices intensified the debate on speculation and cash prices.


Rick Lane

Rick Lane of Trading Technologies Talks Mobile Trading and Legacy Systems (Part 1/2)

Rick Lane, chief technology officer of Trading Technologies is overseeing a major overhaul of how Trading Technologies develops its solutions. In part 1 of this two-part conversation with JLN editor-in-chief Jim Kharouf, he talks about mobile trading trends, the legacy challenges for the futures industry and rebuilding Trading Technologies’ entire architecture — and how this will all come together. In Lane’s view, rethinking the way technology is built and delivered means finding a balance of buying existing software and combining it with new solutions, a departure from the firm that traditionally built everything in-house.

In part 2 of our interview (coming soon), Lane will talk about how Trading Technologies is addressing regulation and its technology, the move of OTC into futures markets, Trading Technologies Algo Design Lab’s growth and what’s next in the futures markets.

Watch the video »

JLN Managed Futures

In this issue, the heads of six futures commission merchants deliver a dose of much-needed straight talk on industry issues, Longboard Asset Management’s Cole Wilcox talks managed futures with FINalternatives, and Jim Rogers says the bond rally has run its course, and commodities could be the next big thing.

Emerging Manager Forum – CTA Expo Miami 2012
The Emerging Manager Forum in Miami Beach is set for December 13. This is the first CTA Expo event for South Florida and aims to provide emerging hedge funds and CTAs from the US, Europe and Latin America with capital sources.

The event will feature a strong lineup of speakers and CTAs, looking to provide information about their funds. Among the speakers are Michael Livian of Livian & Co., who will talk about what family offices are looking for, Blu Putnam, chief economist of CME Group on game changers and Alexandre D’Avila of Pires D’Avila who will talk about marketing in South and Latin America, as well as Mark Shore of Shore Capital Management who will talk about decoding myths of managed futures. Those are just a few speakers.

Managed Futures editor Jim Kharouf will also be on a panel with two other media professionals to talk about the media, how to use it to build your business. This is an interesting panel for a couple reasons. For one, many in the CTA and hedge fund space are often looking for ways to use media in many different ways but often don’t know how. Secondly, media means many different things today. Given the rise of the internet, the decline of traditional newspapers and magazines, there is more than one way to use the media to your advantage. We’ll talk about that and more at the show. Hope to see you there.

Click here for a link to CTA Expo video with Frank Pusateri and Bucky Isaacson.

~Jim Kharouf


MarketsWiki Recent Updates


Christine Wohn; Deborah J. Bollman; Jeff Borchardt; Christopher M. Behney; Todd Fulton; Rick Lane; Edward Boyle; Joseph Ott

Companies, Organizations and Groups

China Futures Margin Monitoring Center; AlphaMetrix; CME Group, Inc.; National Futures Association; C2; Boston Options Exchange; Kansas City Board of Trade; Global Electronic Trading Company (GETCO); Rosenthal Collins Group LLC; Trading Technologies International




Fiscal cliff; Mobile Trading Platform; Electronic trading


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Lead Stories

DealBook: S.E.C. Charges 5 Firms Over Audits in China
New York Times
The Securities and Exchange Commission says the Chinese affiliates of the five largest United States accounting firms failed to produce work papers from their audits of several China-based companies that are under investigation.

NYSE Liffe readies for OTC shake-up
Philip Stafford –
NYSE Liffe will allow large blocks of trades in three of its most popular listed European fixed-income contracts to be traded as “over-the-counter” style deals in preparation for an overhaul of the global derivatives market.

Exchanges to Ask SEC to Delay Deadline for Audit Trail Program
U.S. stock and options market operators and an industry regulator plan to ask the Securities and Exchange Commission to extend the deadline for when they must submit a plan for a comprehensive market oversight system.

Chi-X Australia appoints Jamie Crank as head of market operations
Chi-X Australia Pty Ltd, a wholly owned subsidiary of alternative trading venue operator Chi-X Global Holdings LLC, today announced the appointment of Jamie Crank as Head of Market Operations.

Bats to pay Chi-X Europe investors $65m earn-out
Michelle Price – Financial News
Bats Global Markets is set to make a $65m payment to shareholders of Chi-X Europe, the company it acquired a year ago, after the newly-merged Bats Chi-X Europe platform met the conditions of an earn-out clause agreed under the terms of the deal.

Banks plan to relaunch off-balance-sheet derivatives units
After falling out of favour in the first phase of the crisis, derivatives product companies (DPCs) are set for a comeback, with six banks understood to be looking at launching new vehicles or revamping existing structures to cut their liquidity costs under the incoming Basel III framework.

Banks Discover Money Management Again as Trading Declines
Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of managing money for clients.

Frankfurt’s Ambitions Get Cut Back
A wave of layoffs and staff reductions by international investment banks is hitting Germany’s financial capital, dealing another blow to Frankfurt’s aspirations to rival London as a financial center.

Hedge Funds Prioritize Technical Compliance Over a Culture of Governance, According to Corgentum Consulting’s Investor …
PRWeb via Yahoo! News
Corgentum Consulting, the leading provider of the industry’s most comprehensive hedge fund operational due diligence reviews, today announced the results of a survey that shows the majority of investors (72%) feel hedge funds are focused on achieving only the technical compliance, versus pursuing a culture of governance, when it comes to regulatory preparedness.


Regulators Discuss Libor Reforms
A council of regulators charged with identifying risks to systemic stability on Monday met privately to discuss reform of the Libor overnight interest rate, which is a the center of a massive-industry-wide international investigation into rate rigging.

Swiss investments excluded from regulations
James Shotter –
Swiss hedge funds, private equity firms and real estate funds will be allowed to continue selling their wares in the European Union, after Swiss and European regulators reached an agreement on how to supervise them.

Foreign Officials Visit Fed on Volcker Rule
Dow Jones
The latest visitors arriving at the Federal Reserve to weigh in on proposed limits on banks’ trading with their own money haven’t been from Wall Street. Envoys from foreign governments have flocked to the Fed, in one measure of how far concerns over the “Volcker rule” have reached.

The Fed is backing foreign banks into a corner
CNN Money
Large foreign banks may soon have to face some tough choices about their U.S. operations.

Protections in hedge fund proposal axed: Aguilar
Market Watch
A series of investor-protection provisions were removed from a hedge fund advertising proposal on the eve of a vote on it, a top commissioner on the Securities and Exchange Commission tells reporters.

CFTC Approves Order to Add the Other Commodity Asset Class to the Provisional Registration of DTCC Data Repository (U.S.), LLC as a Swap Data Repository
The U.S. Commodity Futures Trading Commission (CFTC) on December 3, 2012, approved an order for DTCC Data Repository (U.S.), LLC, a provisionally registered swap data repository, to accept swap data for the “other commodity” asset class pursuant to section 21 of the Commodity Exchange Act and part 49 of the Commission’s regulations.

SEC Staff To Host Decimalization Roundtable

FSA consults on plans for temporary product intervention rules
The Financial Services Authority (FSA) is consulting on the approach the future Financial Conduct Authority (FCA) would take if it needed to exercise powers to make temporary rule changes, before consultation, relating to financial services products.

Capital Formation From The Investor’s Perspective By SEC Commissioner Luis Aguilar – AICPA Conference On Current SEC And PCAOB Developments

Remarks Before The 2012 AICPA Conference On Current SEC And PCAOB Developments By Paul A. Beswick, Acting Chief Accountant, Office Of The Chief Accountant, U.S. Securities And Exchange Commission

ASIC helps school students get MoneySmart

Exchanges & Trading Facilities

CME Group Completes Acquisition of Kansas City Board of Trade
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has completed its acquisition of the Kansas City Board of Trade (KCBT), the leading futures market for hard red winter (HRW) wheat.

Cleartrade Exchange Extends Liquidity Provider Scheme Into Iron Ore And Fuel Oil Contracts
Cleartrade Exchange (CLTX), the Singapore-regulated futures market, is pleased to announce new agreements with a number of its members to extend liquidity provision into several new asset classes. The agreements mean that CLTX now provides firm, two-way prices on several of its Iron Ore, Fuel Oil and Dry Freight contracts during the trading day.

Montreal Exchange Implements Bulk Quote Management Functionality on its Equity, ETF, Currency and Index Options
Montreal Exchange (MX) announced it will implement a Bulk Quote Management (BQM) functionality for the benefit of equity, exchange traded fund, currency and index options beginning today, in a three-tiered approach. The BQM functionality will enhance the Bourse’s Bulk Quoting Participants’ (BQPs) flexibility in establishing risk control parameters to better manage their quotations and related risk.

Nasdaq chief to sell 1m stock options
Arash Massoudi in New York –
Robert Greifeld, chief executive of Nasdaq OMX, is preparing to exercise and sell up to 1m stock options in the global exchange operator, according to a securities filing. The potential share sale, which could take place as early as next week, could represent up to 27 per cent of Mr Greifeld’s total holdings in the company and would be worth as much as $23.9m based on Monday’s closing price.

LME Announces New Trading Records For November – Record Monthly Trading Volume Of 14.51 Million Lots – LME Cobalt Hits Record Monthly Volume Of 1,974 Lots
The London Metal Exchange (LME) experienced record volumes in November, with 14.51 million lots traded.

The Options Industry Council Announces Options Trading Volume Down 3 Percent in November
The Options Industry Council (OIC) announced today that 335,527,473 contracts were traded in November, which is off 2.57 percent compared to last November when 344,377,310 contracts were traded.

Average daily volume of 7.5 million contracts at Eurex Group in November
In November 2012, the international derivatives markets of Eurex Group recorded an average daily volume of 7.5 million contracts (November 2011: 10.0 million). Of those, 5.0 million were Eurex Exchange contracts (November 2011: 7.2 million), and 2.5 million contracts (November 2011: 2.8 million) were traded at the U.S.-based International Securities Exchange (ISE).

81 billion euros orderbook turnover on Xetra in November
Order book turnover on Xetra and the Xetra Frankfurt specialist trading stood at E85.1 billion in November – a decrease by 24 percent year-on-year (November 2011: E111.6 billion). Of the E85.1 billion, E80.8 billion were attributable to Xetra – a decrease by 24 percent y-o-y (November 2011: E106.4 billion). E4.3 billion were attributable to the Xetra Frankfurt specialist trading – a decrease by 17 percent y-o-y (November 2011: E5.2 billion). Order book turnover on Tradegate Exchange* totalled approximately E2.8 billion in November.

ISE Reports Business Activity for November 2012
The International Securities Exchange (ISE) today reported average daily volume of 2.5 million contracts in November 2012. This represents a decrease of 11.1% compared to November 2011. Total options volume for the month was 53.2 million contracts. ISE was the second largest U.S. equity options exchange in November with market share of 18.2%*.

BATS Global Markets Reports November Volume; Record Fifth Consecutive Month Above 12% Market Share in U.S. Equities
BATS Global Markets (BATS), a leading operator of securities markets in the U.S. and Europe, reported November data, including the third best U.S. equities market share in its history (12.7%), a record fifth consecutive month above 12%.

BOX Price Improvement Activity for November
In the month of November, price improved contracts on BOX Options Exchange (“BOX”) averaged 205,224 per day. Overall average daily trading volume on BOX in the month of November was 485,178 contracts.

The AX Trading Network Surpasses 10 Million Shares Traded
AX Trading announced today that it had surpassed the 10 million share mark in trading volume. According to Bloomberg trade advertising service, as of November 30, over 10.3 million shares have traded on The AX Trading Network.

NASDAQ OMX Nordic Trading Statistics November 2012
The share trading on NASDAQ OMX Nordic decreased by 23.3 % to a daily average of 1.7bn EUR, compared to 2.2bn EUR in November 2011. Compared to the previous month, October 2012, the daily average decreased by 7.8 %. Derivatives trading decreased by 12.1 % to a daily average of 462,151 contracts, compared with 525,817 contracts in November 2011. ETF trading[1] (Exchange Traded Funds) decreased by 57.3 % to a daily average of 38m EUR compared to 89m EUR in November 2011.

Key figures SIX Swiss Exchange and Scoach Switzerland: November 2012
A total of 2,559,932 transactions were conducted on SIX Swiss Exchange and Scoach Switzerland in November. This represents a fall of 2.7% compared with the previous month. However, turnover rose slightly month-on-month to CHF 71.3 billion (up 0.3%).

Nordic Growth Market NGM AB: November Turnover Exceeds 2.5 Billion SEK (293 Million Euro) At NGM

Burgundy Aggregated Market Shares – Finnish Equities, November 2012

November Statistics Report From The NASDAQ OMX Nordic Exchanges

The equities trading volume in the Spanish Stock Exchange totalled E641.76bn to the end of November, down 26% on the same period last year. In November, the trading volume reached E42.27 bn, down 38% year on year. The number of contracts traded in the first eleven months of the year totaled 60.2 million, up 1.5% from the same period in 2011. In November trading on BME’s Derivatives Market, MEFF, came in at 3.2 million contracts, down 42% from the same period a year earlier.

Boerse Stuttgart Generates Turnover Of Almost EUR 7 Billion In November 2012 – Little Change In Trading Turnover – Year-On-Year Increase In Corporate Bonds

Portuguese Treasury bills integrated into Interbolsa

LME Presentation On Hedging, Pricing & Fundamental Analysis

IntercontinentalExchange Chairman and CEO to Present at Goldman Sachs Financial Services Conference on December 5

[CBOE] Limit Up/Limit Down and Market Wide Circuit Breaker Industry Test Dates

Options for Receiving Credits under the Volume Incentive Plan for December 2012

Enhanced Electronic Blue Sheet Submissions Updates

NYSE Euronext Hosts 2012 NYSE Russia Day at the New York Stock Exchange

Direct Edge Regulatory Notice #12-09: Consolidated Audit Trail In-Person Event On December 10, 2012 In New York, NY

Fifty Foreign Companies On The WSE: First Swiss Company Newly Listed On The Warsaw Stock Exchange

Hedge Funds & Managed Futures

Former Hedge Fund Wiz Faces Second Abysmal Year
One of the hedge funds run by John Paulson, whose prescient bets were chronicled in “The Greatest Trade Ever,” is on track to be the second worst performer of 2012.

Hedge Funds Win as Europe Will Pay More for Greek Bonds
Hedge funds invested in Greek debt are poised to be winners after European policy makers flinched and raised the price for how much the recession-stricken country would pay to buy back its bonds.

Calpers Crusader Takes Aim at Fees
At its annual investor meeting earlier this year, buyout firm Leonard Green & Partners LP played a video that parodied Réal Desrochers of Calpers as a spear-carrying sentry fending off a team of Leonard Green executives, portrayed as Knights of the Round Table, trying to raise money for a new buyout fund.

TCW loses Fresno mandate after duo exits
Sarah Krouse – Financial News
TCW, the fund manager acquired by private equity giant Carlyle in August, has lost a mandate worth more than $70m in part due to the departures of two of its senior portfolio managers. The City of Fresno Retirement Systems terminated a mandate with TCW last month, citing the departures of two senior portfolio managers who had both worked at the fund manager for more than 15 years.

Recruiting Young Talent in China to Find the Next Big Idea
As he discusses technology, Stephen Bell, with his shaved head, glasses and dark Levi’s, channels Apple’s co-founder, Steven P. Jobs. “Name some companies that have changed the world.” Mr. Bell tells the crowd at a local university, writing their replies in chalk on a blackboard

Woolley plots capital markets revolution
William Hutchings – Financial News
Governments should withdraw tax exemption rights from charities, pension schemes and other investors if they fail to hold their investments for more than three years, according to a new plan for improving the capital markets for the benefit of society.

A case study in Brazil’s economic troubles
Reuters via Yahoo! News
SAO PAULO – A good example of why Brazil’s economy is floundering can be found in a surprising place — a seaside city in southern Scandinavia. Stavanger, Norway-based investment fund Skagen says it has lost about $200 million since August because of Brazilian President Dilma Rousseff’s latest intervention in her country’s economy — a plan to force companies to slash electricity rates.

Dyal Capital raises $1.28 billion for hedge fund stakes
Reuters via Yahoo! Finance
Dyal Capital Partners, a private equity fund set up to take stakes in existing hedge fund firms, has closed to new money after raising $1.28 billion, showing that demand to invest in the sector persists despite recent poor performance.

ADM raises GrainCorp offer to A$2.8bn
Gregory Meyer in New York and Neil Hume in Sydney –
Archer Daniels Midland has sweetened its cash offer for GrainCorp and acquired a further 5 per cent of its shares in a stock market raid as it tries to bring the directors of the Australian wheat trader to the negotiating table.

Rothstein Kass Brings Together Leading Hedge Fund Professionals to Create New Operational Due Diligence Best Practices
PRWeb via Yahoo! News
Investment Managers, Institutional Investors Deliver Insights to Improve ODD ProcessNew York, NY December 03, 2012 In an effort to help establish a better framework for the hedge fund operational due diligence process, Rothstein Kass, a leading national professional services firm, today unveiled a set of “best practice ODD guidelines.”

Homann Holzwerkstoffe plans bond in Entry Standard

Banks & Brokers

Morgan Stanley trader was probed at Goldman: sources
Reuters via Yahoo! News
Morgan Stanley hired former Goldman Sachs trader Edward Glenn Hadden to run its Treasury bond desk last year, even though his former employer had placed the trader on paid leave for about a year following an internal inquiry, said three people familiar with the situation.

WaMu Trustees Seek Goldman Probe
Dow Jones
Trustees for creditors left unpaid after the biggest banking failure in U.S. history say they suspect Goldman Sachs Group Inc. of targeting Washington Mutual Inc., in a naked short-selling scheme.

Big Swiss banks to charge fees on some franc deposits
Reuters via Yahoo! Finance
ZURICH – Switzerland’s largest banks are to charge fees and pay negative interest rates on Swiss franc deposits made by rivals to encourage them to limit their holdings of the currency.

BoE’s Haldane says bankers’ pay should fall further
Reuters via Yahoo! News
LONDON – British bankers’ pay has further to fall and the banks themselves should be lending more to boost Britain’s economy, a senior Bank of England official said on Monday. Andy Haldane, the BoE’s executive director for financial stability, said that in the long run investment bankers’ pay should be close to that of doctors or lawyers – rather than several times higher.

Morgan Stanley loses two high-producing brokers
Market Watch
High-producing financial advisers Robert Sackler and Marc Ackerman of Beverly Hills have left Morgan Stanley to join Wells Fargo Advisors, marking the latest departure of elite brokers who had expressed concerns about technology issues at Morgan Stanley’s wealth management business.

Bank of America Delays Fees Again
ABC News via Yahoo! News
Bank of America has decided to “shelve” controversial new fees that could have come into effect at the end of this year, delaying them possibly until late next year. The second-largest U.S. bank by assets came under fire a year ago when it planned to…

Former boss says sorry for role in HBOS catastrophe
Reuters via Yahoo! News
LONDON – A former chief executive of HBOS apologised for the first time on Monday for his role in the high-risk lending strategy that pushed the British bank close to collapse during the financial crisis.

Wells Fargo Rebrands Merlin Securities to Wells Fargo Prime Services

Cantor Fitzgerald Establishes Presence in Ireland with Acquisition of Dolmen Stockbrokers

Clearing & Settlement

DTCC names Christopher Behney Head of Enterprise Production Assurance
The Depository Trust & Clearing Corporation (DTCC) announced today the appointment of Christopher M. Behney as Managing Director, Head of Enterprise Production Assurance (EPA) and Head of DTCC’s Dallas, Texas office.

NYSE Liffe expands Bclear service to include fixed income products
NYSE Liffe, the European derivatives business of NYSE Euronext, today announced the expansion of Bclear, the Exchange’s trade confirmation, administration and clearing service, with the introduction of Fixed Income products. The new contracts available through Bclear will be Three Month Euro (Euribor) Futures, Three Month Sterling (Short Sterling) Futures and Long Gilt Futures. The new Bclear contracts will be available to NYSE Liffe members from 10 December 2012.

CFTC Approves Order To Add The Other Commodity Asset Class To The Provisional Registration Of DTCC Data Repository (U.S.), LLC As A Swap Data Repository
The U.S. Commodity Futures Trading Commission (CFTC) on December 3, 2012, approved an order for DTCC Data Repository (U.S.), LLC, a provisionally registered swap data repository, to accept swap data for the “other commodity” asset class pursuant to section 21 of the Commodity Exchange Act and part 49 of the Commission’s regulations.

OCC Reports Cleared Contract Volume Flat In November As Futures And Securities Lending Activity Rise
OCC announced today that total cleared contract volume reached 339,206,527 contracts in November, a 2 percent decrease from the November 2011 volume of 346,584,214 contracts. While overall cleared contract volume remained flat last month, OCC reported a significant rise in futures and securities lending activity. OCC’s year-to-date cleared contract volume reached 3,724,984,827 last month, down 13 percent from 2011, but an improvement from the 14 percent decline recorded after October.

CME Group Clearing Advisory: Delisting (59) Energy Products on NYMEX

CME Clearing – Performance Bond Requirements – Crude Oil Inter-Commodity Volatility Spread Credits- Effective Tuesday, December 4, 2012

CME Clearing – Performance Bond Requirements: Crude Oil Spread Outrights; Crude Oil and Refined Products Inter-Commodity Spread Credits- Effective Tuesday, December 4, 2012

Clearing Advisory: CME Group Delivery Dates for December 2012

CME Group Clearing Advisory: Distribution of 1099 Statements

Indexes & Products

NASDAQ OMX Launches Global Index Family – Provides Investors A Broad Representation Of The Global Investable Marketplace
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), parent of the world’s first electronic stock market, today announced the launch of the NASDAQ Global Index Family – an extension of NASDAQ OMX’s growth as an innovative global index provider.

ISE Partners with PureFunds to Launch Three New ETFs

Component Change Made In STOXX Europe 50 And STOXX Asia/Pacific 50 Indices – Changes Are Due To Fast Entry Rule


Broadridge Enhances Managed Data Service Offering, Signs First Client for Global Corporate Actions Solution
Broadridge Financial Solutions – through an alliance with leading corporate actions service provider XSP – today announced that it has signed a large North American broker-dealer as the inaugural client to use its Global Corporate Actions Solution (GCAS) product.

Broadway Technology Named Red Herring Top 100 Global Winner
GlobeNewswire via Yahoo! Finance
Broadway Technology, LLC, a leader in high-performance trading solutions for top-tier global banks and hedge funds, announced today that it was named a winner of Red Herring’s Top Global 100 Private Companies award, recognizing the year’s most innovative and fastest growing companies from North America, Europe and Asia.


BGC Partners (Australia) Pty Limited pays $45000 infringement notice penalty
BGC Partners (Australia) Pty Limited has paid a penalty of $45,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel for intentionally withholding the entry of Buy and Sell orders on the ASX 24 Market to enable them to transact with one another, which potentially precluded other participants from participating as counterparty to the orders.

ASIC obtains court orders permanently banning Sydney financial adviser

ASIC’s audit inspection findings for 2011-12

Environmental & Energy

Yvo de Boer: Put 150 euro per tonne price on carbon
Urgent action is needed to boost carbon prices to 150 euro per tonne – 2,250% higher than current levels – if the EU is to meet its decarbonisation goals by 2050, the former secretary-general of the UNFCCC has told EurActiv in an interview.

**RKB — de Boer says Poland can be pursuaded with aid. Refresher: EU’s carbon market reform package:

Deutsche Bank joins carbon fray
The Sydney Morning Herald
DEUTSCHE Bank has become the latest bank to apply to trade in carbon credits, joining 123 other companies seeking to deal in regulated emissions.

Free Carbon May Chop Renewable Costs, EON’s Schaefer Says
Europe should consider cutting costs for consumers by rewarding renewable power and energy efficiency through the region’s carbon market rather than through expensive subsidies to utilities, the head of EON SE (EOAN)’s trading unit said.


Chinese companies caught in SEC crossfire
Simon Rabinovitch in Beijing and Paul J Davies in Hong Kong –
The Big Four auditors have been caught in the crossfire of a US-China regulatory dispute, but the biggest casualty might be Chinese companies listed in the US.

China, S. Korea Agree to Boost Use of Local Currency in Trade
South Korea said it agreed with China to allow banks in both countries to borrow funds from an existing swap arrangement to encourage trade settlement in local currencies.

HKMEx Appoints Director Of Business Development Projects
The Hong Kong Mercantile Exchange (“HKMEx”), China’s global marketplace, today announced the appointment of Eric Maine as Director of Business Development Projects, responsible for managing new product launches from origination to market execution and delivery.
Invest ASEAN 2013 To Educate Retail Investors On ASEAN Opportunities – Investment Roadshow Kicks-Off Regionally To Promote ASEAN As An Asset Class.
Tokyo Stock Exchange: Extension Of Implementation Period For Partial Revision To Criteria For Market Capitalization Pertaining To Listed Stocks

Frontier Markets

Middle East needs to tackle regulatory fragmentation
Sophie Baker – Financial News
Regulators in the Middle East must come together and coordinate on regulatory changes if the countries in the Gulf are to benefit from domestic and foreign fund manager participation, according to fund managers operating in the region.
Qatar Exchange hosts “Success in Digital IR” Workshop
Qatar Exchange (QE) today hosted the “Success in Digital IR” workshop and the 4th Annual KWD Webranking Survey Awards for the best websites in the MENA region. The event was held at St. Regis Hotel, Doha. in cooperation with M: Communications and with the support of the Middle East Investor Relations Society.

Malawi raises benchmark rate to tame inflation
Reuters via Yahoo! News
Malawi’s central bank said on Tuesday it would raise its benchmark interest rate by 400 basis points to 25 percent as it seeks to stabilise the kwacha currency to contain inflation.

Goldman hires Barclays banker to run Saudi business: sources
Reuters via Yahoo! News
DUBAI – Goldman Sachs Inc has hired Omar Mohammady to run the its Saudi Arabian investment banking business, a key role for global banks operating in the Gulf Arab region, three banking sources said.

Tehran Stock Exchange Bulletin November 2012


Katten Attorney Lance Zinman Named to Crain’s 40 Under 40 List
Katten Muchin Rosenman LLP announced today that Financial Services partner Lance Zinman has been named to the Crain’s Chicago Business 40 Under 40 list, which each year honors 40 individuals under the age of 40 who are at the top of their respective industries in Chicago. Zinman is the head of Katten’s Financial Services Practice in Chicago and has a broad range of experience within the corporate and financial regulatory fields.

Merrill: Worried Americans Pushing Back Retirement
Linda Shelby, SVP at Bank of America/Merrill Lynch, says Americans across three generations are planning to retire later than they expected.

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