Industry news

Date: Feb 19, 2013

February 19, 2013: Liquidnet aims to boost Europe trading; Eurex receives permission to offer direct market access in S. Korea; Dollar Sibor May Be Dropped Amid Global Rate-Rigging Probe

Liquidnet targets a threefold increase in European business, and plans to bring in the new business from fund managers there. Eurex gets the green light to offer its full range of services to companies and people in South Korea. Singapore’s central bank considers discontinuing the Sibor interbank lending rate, which has been tainted by rate-rigging allegations.

First Read

Katten Joins MarketsWiki Sponsors
John Lothian News is pleased to announce that Katten Muchin Rosenman LLP has agreed to become a Partner level sponsor of MarketsWiki.

Katten Muchin Rosenman LLP is a law firm with more than 600 attorneys in locations across the United States, London and Shanghai. Its Financial Services Practice is led by chairs Henry Bregstein, Arthur Hahn, Fred Santo and Lance Zinman.

“We are very pleased to have a prominent legal firm such as Katten support MarketsWiki and the work of John Lothian News,” said John J. Lothian, President & CEO of John J. Lothian & Company, Inc. and founder of the online knowledge base. “Katten is an integral part of the derivatives industry and are the first law firm to become a MarketsWiki sponsor.”

“At Katten we advise a broad range of buy-side and sell-side participants in the financial markets, ranging from proprietary trading firms and hedge funds to exchanges and major intermediaries, with their transactional, litigation and regulatory issues,” said Lance Zinman, partner and head of the Chicago Financial Services Practice at Katten. “So we are thrilled to partner with John Lothian News, a great resource for timely, thoughtful news and commentary about the financial markets and the regulatory environment.”

Learn more about the Katten at

**** Editors note: MarketsWiki passed the 35 million page view mark over the weekend, which represents 2 million new page views since the beginning of 2013 and double the life to date page views as of the end of 2011.


Zweig-DiMenna Mourns Loss of Marty Zweig
With great sadness, Zweig-DiMenna Associates LLC announced the passing of Martin (“Marty”) E. Zweig earlier today.

Born in 1942 in Cleveland, Ohio, Zweig was a legendary investor, prolific writer and iconic teacher. Having begun trading stocks as a teenager, Marty began his more formal career in the 1970s writing investment newsletters while he was a Professor of Finance. One of the most highly regarded investment newsletters in the country, The Zweig Forecast was published for twenty-six years, from 1971-1997. Zweig’s investment picks regularly outperformed the market. The Zweig Forecast ranked number one for risk-adjusted returns during the 15 years it was monitored by Hulbert Financial Digest. Zweig is credited with original and important statistical market research, including the creation of the put/call ratio, a technical measure of investor sentiment that is now a common market indicator. Zweig’s creation of the put/call ratio was part of his ground breaking research for his Ph.D. in Finance. Zweig was also a frequent contributor to business magazines, including Barron’s.

***** Rest in peace, Martin Zweig.


The Best Schwag of 2013; From OpenLink | John Lothian Newsletter
John Lothian

At the Commodity Markets Council conference in Miami a couple of weeks ago, there were just a few vendors with booths. But who would have guessed that the best schwag of 2013 for the year would be at the event. A company called OpenLink offered a low tech, no power speaker for your iPhone. You just plug your phone into the rubber device and presto the horn of the device starts amplifying the music from your iPhone just like that.


Fixed-income futures market springs to life
Tom Osborn – Financial News
After a year spent in the doldrums, the European fixed-income market exploded into life in January. For NYSE Liffe, London’s largest futures exchange, the month was a record for benchmark contracts tied to the Euribor interbank lending rate.

***** This is like manna from heaven.


Prosecutors, Shifting Strategy, Build New Wall Street Cases
Criticized for letting Wall Street off the hook after the financial crisis, the Justice Department is building a new model for prosecuting big banks. In a recent round of actions that shook the financial industry, the government pushed for guilty pleas, rather than just the usual fines and reforms. Prosecutors now aim to apply the approach broadly to financial fraud cases, according to officials involved in the investigations.

**** Letting them off the hook? They never got them on the hook.


Buy-side cautious welcome for swap futures
The launch of swap-based future products by CME and IntercontinentalExchange (ICE) in Q4 2012 has been welcomed within the buy-side community, although with some hesitancy as to their breadth of appeal.

***** Put any new contract name in front of this story.


GFI Names Heffron CEO as Gooch to Remain as Executive Chairman
Matthew Leising – Bloomberg
GFI Group Inc. named Colin Heffron chief executive officer, replacing Michael Gooch who will remain the company’s executive chairman of the board.

**** Orderly transitions are the sign of a strong company.


National Bank Financial expands use of Orc technology to provide opportunities in Canadian Markets
Orc, a leading provider of technology and services for the global financial industry, today announced that National Bank Financial (NBF) has expanded their use of Orc technology to provide global market participants with algorithmic execution and market access in the Canadian markets.


IntercontinentalExchange Sets New Daily Record for ICE Russell 1000 Growth Index
IntercontinentalExchange, a leading operator of global markets and clearing houses, reported record daily volume in the ICE Russell 1000 Growth Index futures contract with 4,443 contracts traded on Feb. 15.


ISE Receives “Most Innovative Exchange Technology – Options” Award At Wall Street Letter 2013 Institutional Trading Awards
The International Securities Exchange (ISE) announced today that it received the “Most Innovative Exchange Technology – Options” award at the Wall Street Letter 2013 Institutional Trading Awards.


New Restoring Customer Confidence Video
The eleventh video in our Restoring Customer Confidence series deals with daily reporting of customer 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»
Daily Reports: Tell Us Where The Money Is

Daily Reports: Tell Us Where The Money Is

In the months and days since MF Global’s collapse and the Peregrine Financial Group’s fraud, some have argued simply for more transparency from futures commission merchants (FCMs). Scott Gordon, chairman and CEO of Rosenthal Collins Group, said his firm publicly discloses how customer funds are being invested and held by the firm. In Rosenthal Collins’ case, the firm reports its cash deposits held at US banks, funds held in US Treasury securities, as well as its how much is being held by clearing houses and clearing brokers and US banks. This type of transparency could be the difference in building customer trust or losing it.

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? Previous videos:

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


Market abuse detection has become politicised
Michelle Price – Financial News
Delegates at this year’s World Exchange Congress, the annual international exchange conference which was held this month, could be forgiven for having a strong sense of déjà vu. On the agenda – yet again – was the issue of cross-market, cross-border surveillance and the detection of market abuse. The debate – yet again – pitched the exchanges against the alternatives platform operators. And – yet again – passions ran high.

***** Déjà vu over conference programs is a regular occurrence.


Burned Investor in S&P-Affirmed CDO Prescribes Prison Jumpsuits
Mary Childs – Bloomberg
Five years after his bank’s investment in a collateralized debt obligation rated mostly AAA by Standard & Poor’s got wiped out, Peter Groninger says of the Justice Department’s $5 billion lawsuit against the world’s largest credit ratings company: “It’s about goddamn time.”


Audit confirms U.S. gold safe at New York Fed
Andrew Tangel –
The U.S. government’s gold in New York is safe in a vault underneath Manhattan, and some of the precious metal there is purer than previously thought. That’s according to a first-ever audit conducted last year by the Treasury Department of U.S. gold on deposit at Federal Reserve banks in New York and elsewhere.

**** Ron Paul should be happy now and the Treasury said they will repeat this audit every year.


A Reputation, Once Sullied, Acquires a New Shine
How do you describe Steven L. Rattner? Up until three years ago, he was typically referred to in these pages as a former journalist turned successful financier — the vice chairman of the investment bank Lazard and then a co-founder of the Quadrangle Group, the private equity firm.


Bourbon backlash: Maker’s Mark reverses decision to cut alcohol content
After a backlash from customers, the producer of Maker’s Mark bourbon is reversing a decision to cut the amount of alcohol in bottles of its famous whiskey.

***** One of the most brilliant marketing schemes I have seen in a long time.



MarketsWiki Page of the Day
Colin Heffron

MarketsWiki Recent Updates


Raj Fernando; Peter Nabicht

Companies, Organizations and Groups

Allston Trading, LLC; Chicago Trading Company; Chopper Trading; The DRW Trading Group; Global Electronic Trading Company (GETCO); ION Group; FFastFill plc

Lead Stories

Liquidnet aims to boost Europe trading
Philip Stafford –
Liquidnet, the US dark pools operator, is pushing to treble the amount of business it does with Europe’s largest fund managers as investor confidence returns to share trading.

Eurex receives permission to offer direct market access in South Korea
Eurex Exchange, the international derivatives marketplace, announced today that it has received confirmation from the South Korean Financial Services Commission (FSC) to offer its full suite of products in South Korea without objection.

Dollar Sibor May Be Dropped Amid Global Rate-Rigging Probe
Sanat Vallikappen & David Yong – Bloomberg
Singapore’s central bank and a group of lenders are considering putting an end to the city-state’s U.S. dollar-linked interbank lending rate as regulators worldwide probe allegations of rigged benchmark borrowing costs, a person with knowledge of the matter said.

Big-name dealers back Tradeweb
Suzi Ring – Financial News
Bond trading operator Tradeweb has revealed 11 of the high-profile dealers backing its new exchange-traded-fund platform as the company looks to capitalise upon new regulations that will push more derivative products onto electronic platforms.

SIX Group Would Look at Euronext’s Markets, CEO Says
SIX Group, operator of the Swiss stock exchange, said it will consider NYSE Euronext’s European markets if they are offered for sale.

Exclusive: Frustrated with low valuation, Nasdaq debates options
Reuters via Yahoo! News
– Long frustrated about the low market valuation of Nasdaq OMX Group Inc , the exchange operator’s management is debating various ideas, ranging from further diversification to radical steps like going private or eventually splitting up the company, said

Andrew Bailey Appointed as Head of New British Regulator
Andrew Bailey was appointed on Tuesday as head of the new British regulator in charge of overseeing the country’s largest banks. Mr. Bailey, who had been acting as interim chief executive of the Prudential Regulatory Authority, was approved as the full-time head of the British regulator, which will operate as part of the Bank of England, the country’s central bank.

SEC Chairman Elisse Walter presses her agenda, says she’s more than a caretaker
Washington Post
Anyone who tracks the Securities and Exchange Commission already knows that President Obama wants New York attorney Mary Jo White to be the agency’s next leader. But the person currently holding that position has no intention of simply keeping the seat warm until the White House pick gets there.

Can reform save money funds?
Chuck Jaffe, MarketWatch
You’d think no one would give a hoot about an investment earning virtually nothing. But at a time when money-market fund yields are virtually zero, politicians, regulators and fund-company executives are fighting awfully hard to decide how rules over these safe-haven cash-parking spots will work in the future.


Regulator Probes Dark Pools
Regulators are diving deep into “dark pools.” The Financial Industry Regulatory Authority in late 2012 sent examination letters to about 15 dark-pool operators seeking information such as how the trading systems handle customer orders, what they disclose to clients and whether affiliates of the pool operators have access to client trading information. In dark pools, investors post buy-and-sell orders away from the public market

Re: RIN 3038-AD88: Enhancing Customer Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations
National Futures Association
In reviewing and commenting upon the Commission’s proposed requirements relating to risk management programs, internal controls, capital and liquidity standards, customer disclosures, and self-regulatory auditing and examination programs for FCMs, NFA believes that the significant regulatory protections and surveillance techniques already adopted should not be cast aside and should be afforded the time necessary to determine their effectiveness. To that end, while NFA recognizes that many of the Commission’s proposals complement and enhance the regulatory safeguards already developed, others do not and likely do not provide a regulatory benefit any greater than the recently adopted protections and surveillance techniques.

Futures Brokers Say CFTC Rule Could Put Them Out of Business
Silla Brush – Bloomberg
Futures brokerages say a proposed U.S. rule meant to protect customers’ money in a collapse like MF Global Holdings Ltd.’s bankruptcy may end up driving clients from the market and companies out of business.

Director Of International Affairs Ethiopis Tafara To Leave SEC
The Securities and Exchange Commission today announced that Ethiopis Tafara, Director of the SEC’s Office of International Affairs, will leave the agency at the end of next month after 13 years of public service.

Crowdfunders Press the SEC: What Is Taking So Long?
Various members of the crowdfunding community are expected meet in Washington, D.C., Tuesday to press lawmakers and the SEC to implement the JOBS Act.

More debate needed on conflicts and gifts
Colin McLean – Financial News
This could prove a tough year for asset managers. While revenue trends are favourable, costs and the complexity of the business are set to grow, the latest being greater scrutiny on conflicts of interest.

Statement At An Open Meeting Of The Commission To Consider The Public Company Accounting Oversight Board’s Proposed 2013 Budget And Accounting Support Fee By SEC Commissioner Daniel M. Gallagher

ESMA Recommends EU Code Of Conduct For Proxy Advisor Industry

Basel Committee And IOSCO Issue Near-Final Proposal On Margin Requirements For Non-Centrally Cleared Derivatives

Exchanges & Trading Facilities

LSE reconnects small-caps to its phone-broked market
Tom Osborn and Tim Cave – Financial News
The London Stock Exchange will today finish consulting with marketmakers on proposals to transfer nearly 200 stocks from its main electronic platform to its partly phone-broked market, Financial News has learnt.

Cleartrade Exchange (CLTX) Launches Market Data Portal – Addition Of Free-To-Market Consolidated Trade Data Enhances CLTX Value
Cleartrade Exchange (CLTX), the Singapore Regulated Futures Exchange, today launched its new Data Centre web portal. The CLTX Data Centre is the only free-to-market portal which consolidates market information for freight and commodity derivatives contracts.

ASX To Offer Enhanced Global Network Connectivity
ASX will expand its global network connectivity through the launch of ASX Net Global, a cost-effective, low latency network for global customers to connect to the ASX and ASX 24 trading platforms and to the full range of services located in the ASX Australian Liquidity Centre (ALC).

Vienna Stock Exchange Starts Trading In Futures On The Istanbul Traded Index
Trading in euro futures on the Istanbul Traded Index (IBTX in EUR) started today on the Vienna Stock Exchange. The joint index of the stock exchanges of Istanbul and Wien has been calculated since September of last year and enjoys wide international recognition.

Bourse IPO No Moscow Boost to Otkritie: Russia Overnight
The Moscow Exchange’s $498 million debut on Russian markets will probably fail in enticing companies to list exclusively on the bourse, according to Otkritie Financial Corp.

LSE shares fall as results disappoint at takeover target LCH
Reuters via Yahoo! Finance
LONDON – Shares in the London Stock Exchange fell sharply on Friday as weak underlying earnings from its takeover target LCH Clearnet raised fresh concerns over the deal.

Infosys to trade on NYSE Euronext London and Paris Markets

[CBOE] Transaction Fees and Market-Maker Requirements for SPXpm

[CBOE] Order Price Reasonability Checks

CHX INFORMATION MEMORANDA 2013-01: Consolidated Audit Trail Pre-RFP Bidders Conference

TMX Group CEO Plans to Exercise Options and Sell Common Shares

NZX 2012 Full Year Results

TOM MTF Statistics Week 7 – 2013

NYSE To Suspend Trading In The Third Cumulative Preferred Stock, $1.70 First Series Of H.J. Heinz Company

Warsaw Stock Exchange Introduces Amendments To ATS Rules

January 2013 FIF Market Share And Market Dynamics Reports – Executive Summary
U.S. Equities Market Share

Hedge Funds & Managed Futures

Man Group Combines Hedge Fund Units, Names Ellis as President
Man Group Plc, the biggest publicly traded hedge fund manager, combined two computer-driven hedge fund units and made management changes in recent weeks before Emmanuel Roman takes over as chief executive officer next week.

Every Hedge Fund Category Lagged The S&P 500 In January
Business Insider
Hedge funds are often pitched to prospective clients as an asset class that can beat the markets or a specific benchmark like the S&P 500. However, hedge funds have been failing to deliver in recent periods.

Weavering Employees Lose Appeal to Repay Hedge Fund Swap Losses
Two former employees of Weavering Capital Ltd. must participate in paying liquidators of the collapsed hedge fund $450 million after they failed to persuade a London court they weren’t responsible for its losses.

SAC has $1.68 billion in withdrawals as trading probe deepens
Reuters via Yahoo! News
NEW YORK – Hedge fund billionaire Steven A. Cohen is feeling the pinch from the federal government’s insider trading probe as outside investors in his SAC Capital Advisors submitted requests to withdraw a total of $1.68 billion from the firm by year’s end.

Tudor Alumnus McMillan Said to Hire Amy Lee for Firm
Andrew McMillan, who ran a commodity team at Tudor Investment Corp., hired Singapore lawyer Amy Lee to help run the investment firm he plans to start this year, according to two people with direct knowledge of the matter.

BlackRock Re-Opens Euro Money-Market Fund Amid Climbing Yields
BlackRock Inc. re-opened a euro- denominated money-market fund to new clients as yields on the safest debt rose.

Orix buys asset manager Robeco from Rabobank
Dow Jones Newswires
Orix Corp said on Tuesday it has agreed to buy Netherlands’ asset manager Robeco from Rabobank for about E1.94bn ($2.6bn), in what would be the largest acquisition ever by Japan’s biggest financial services and leasing company.

Banks & Brokers

Sweden Teaches Bank Crisis Prevention to Top Basel Rules
Sweden, home to Europe’s safest banks, says the key to avoiding the next financial crisis is to ignore calls for harmonized capital rules and apply individual regulatory standards to match national risks.

Thomson Reuters and EBS provide holistic view of FX markets with blended FX fixing on Thomson Reuters Eikon
EBS, ICAP’s market-leading electronic FX business, and Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced that the sources for the Thomson Reuters and EBS 30-minute FX fixing will be blended via a proprietary algorithm to ensure all traded liquidity across Thomson Reuters Matching and EBS Market is used in the fixing calculations, providing maximum transparency to FX market participants.

JPMorgan Chase cuts pay, employees
Crain’s New York Business
JPMorgan Chase & Co., grappling with Wall Street’s worst year for stock-trading since 2008, cut pay at the equities unit about 4% and pushed out about three dozen employees, people with knowledge of the moves said.

Barclays joins the charge for infrastructure partnerships
Giles Turner, Kiel Porter and Mark Cobley – Financial News
Investment banks with growing capital requirements and large debt and infrastructure teams are looking to launch infrastructure funds using capital from pension funds and asset managers, with Barclays set to lead the charge in the UK.

Deutsche’s Rreef fund in key-man crisis
Kiel Porter and Laura Kreutzer – Financial News
Deutsche Bank’s Rreef Infrastructure platform is in a tailspin following news that its most recent fund has been suspended, with investors weighing whether to demand their capital be returned, according to three people familiar with the matter.

Volante Launch Bank Payment Obligation (BPO) Readiness Survey

Clearing & Settlement

LCH.Clearnet Group Limited (LCH.Clearnet) today announces its results for the year ended 31 December 2012.
Net revenues increased by 24% to E426.2 million
Headline operating profit grew by 89% to E127.5 million
Clearing fees increased 7% to E253.9 million

ISDA Response To CPSS, IOSCO & FSB Re. Qualifying Central Counterparties

Indexes & Products

Low-fee Fever Spreading Through ETFs
I listened to a well-known financial adviser glorify exchange-traded funds while speaking at the 2013 Inside ETF conference last week. There were 1,200 other people at the conference, many of them investment advisers.

An Impressive First Year for Bill Gross’s ETF
Pimco Total Return ETF has churned out superb returns in its debut year — and has done so without using derivatives

Thai Bourse Lists ThaiDEX SET100 ETF On February 21

Annual review of the BEL-Indices


Due to client demand, SuperDerivatives increases headcount across Asia Pacific
As a direct response to increased client demand, and the popularity of its new cloud-based market data product DGX, SuperDerivatives is increasing its headcount across the Asia Pacific region by 22%.

IBM Replaces Existing Infrastructure With Rapid Addition Solutions
Rapid Addition, the leading provider of trading technology to buy- and sell-side financial institutions, has leveraged IBM’s (NYSE: IBM) WebSphere MQ Low Latency (WMQ LLM) technology to produce an ultra-low latency, high performance product, for the complete trade life cycle.

Pine River Capital Management Selects Flextrade For Global Multi-Asset Trading Solution – Deploys FlexTRADER EMS To Handle Equities, FX, Options & Futures

FIX Protocol Ltd Publishes Guidelines To Advance Trading Practices In Response To Exponential Growth In Electronic Bond Trading


SAC’s Cohen May Face SEC Suit as Deposition Hurts Case
U.S. investigators have subpoenaed a 2011 deposition of SAC Capital Advisors LP founder Steven Cohen, whose sworn statements on insider-trading compliance may hurt him as he tries to persuade regulators not to file a lawsuit that could shut his $14 billion firm.

SEC Freezes Assets in Swiss-Based Account Used in Suspected Insider Trading Ahead of Heinz Acquisition
The Securities and Exchange Commission today obtained an emergency court order to freeze assets in a Zurich, Switzerland-based trading account that was used to reap more than $1.7 million from trading in advance of yesterday’s public announcement about the acquisition of H.J. Heinz Company.

Lloyds Banking Group fined £4.3 million for delayed PPI redress payments
The Financial Services Authority (FSA) has fined three Lloyds Banking Group firms a total of £4,315,000 for failings in their systems and controls that resulted in up to 140,000 customers receiving delayed payment protection insurance (PPI) redress. The three firms are Lloyds TSB Bank Plc, Lloyds TSB Scotland Plc and Bank of Scotland plc (together, LBG).

Ex-HSBC Client Chon Sentenced to Year in Prison for Tax Evasion
A Maryland cosmetics manufacturer who had an offshore account at HSBC Holdings Plc was sentenced to a year and a day in prison for evading $522,650 in federal taxes.

ASIC takes action against mobile rentals, cancelling its licence and banning its director

Environmental & Energy

EU Emissions Program Hit as Prices Drop
The Wall Street Journal
Europe’s flagship effort to limit greenhouse-gas emissions faces an existential threat as the price of emissions has fallen dramatically, eroding an incentive for industries to pollute less and forcing policy makers to weigh environmental priorities against economic concerns.

EU businesses, investors urge MEPs to support emissions ‘backloading’
A group of 30 major EU businesses and a group of leading institutional investors have separately called on members of the European Parliament’s environment committee to support plans to shore up the EU carbon price by “backloading” emissions allowances.

EU urged to revive flagging emissions trading scheme
Investors and a group of large businesses have urged the EU to revive its flagging emissions trading scheme (ETS), ahead of a key vote in the European parliament next week.


FSA publishes Weekly Review No.33

Frontier Markets

Dubai Financial Market Returns to Profit in 2012 After Rebound
Dubai Financial Market PJSC, the only publicly traded Gulf Arab bourse, said it returned to profit in 2012 as trading volume in the Persian Gulf business hub rebounded and the measure rallied the most in the region.

City Of London Forges Stronger Financial Ties With The DIFC
Dubai International Financial Centre (DIFC) today received the Lord Mayor of the City of London, Alderman Roger Gifford, in addition to a group of high level delegates. The most recent visit is a testament to both parties’ commitment to furthering a continued historic bilateral relationship with the aim of strengthening trade and investment links.

Dubai’s Dewa Plans to Raise $1 Billion Sukuk, CEO Al Tayer Says
Dubai Electricity & Water Authority plans to raise as much as $1 billion from the sale of Islamic bonds this month to refinance debt maturing in June, Chief Executive Officer Saeed Al Tayer said.

NASDAQ Dubai Sets Up Advisory Group To Prepare For SME IPO And Listings Market

Dubai Financial Market – Financial Statements For The Year Ended 31 December 2012

Thomson Reuters To Host A Forum On Oman As A Preferred Destination For Sukuk

LGT Opens First Private Banking Office In Dubai – Offering Unique Family Governance Advisory And Global Execution Services To Private Banking Clients

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