Date: Apr 23, 2013
April 23, 2013: CBOE May Retire From Police Beat; CFTC’s Gensler Says Libor Should Be Ditched; Bankers play to win in regulatory scrimmage
Exchange company CBOE contemplates separating its internal regulatory division into an independent entity. The CFTC’s Gary Gensler says it’s time to say goodbye to LIBOR; meaning, really, it’s time NOW to say goodbye. The US and the EU’s central bankers express more unease over potentially conflicting efforts to bring economic stability to their respective regions.
CME Admits Data Leak
KATY BURNE – WSJ.com
CME Group Inc. in early April made public details of derivatives trading that were supposed to be kept secret, a glitch that comes amid investors’ concern about new trade-disclosure rules.
***JM: Unless I’m missing something, this is less about scandal and more in the realm of, “Ow. Ok, so how did you fix that problem from happening again?”
Running WILD in the Chicago Marathon
Chicago – the spiritual home for futures, the stomping ground of the original chapter of WILD and the setting this fall for the Bank of America Marathon!
Our very own, Samantha Page of WILD London will be amongst the runners and she is supporting Futures for Kids, a fantastic charity started up by a group of people in the futures industry to raise funds in support of children’s charities around the world.
Training for a marathon takes many months of dedication but Samantha has been training for over 14 years! Her story is inspirational – Having incurred multiple injuries in a car crash years ago, she had to first learn how to walk before she could start running again. To warm up for the big challenge in the fall, Samantha is running a half marathon in May and will continue to train (and water ski) during the summer months.
Please support our running WILD woman and the Futures for Kids charity by donating via the justgiving link below. It is a great cause that we are proud to support. Go Samantha!
CBOE 40 video – Take the time to watch
If you haven’t seen the CBOE 40 anniversary video produced by John Lothian Productions, you should! Not only are all the cool kids doing it, but in this case the lessons of the past might provide insights for the future for more than just the people at CBOE. You can see it in all its glory at jlne.ws/YjoFkn
Why Does Financial Innovation Sometimes Make System Riskier?
Justin Lahart – WSJ
Financial innovation gives investors new tools for diversifying portfolios and sharing risks, so it should make markets safer. But the theory that new financial products will make markets less dangerous doesn’t always stand up.
***JM: Interesting read, but a funny concluding paragraph: “Of course Wall Street markets pretty much every new product it sells as a way to reduce risks.” I thought “Wall Street”, whoever that is, marketed every new product as an amazing way to reap incredible profits.
CQG and Continuum partner with AlgoFast
Continuum and CQG today announced a partnership with AlgoFast to supply AlgoFast’s algorithmic event trading software with CQG’s global market data and trade execution capabilities.
**JK – You can also see our AlgoFast interview from last fall with Justin Bouchard at jlne.ws/Rsj98J
The One Fund
BOX Options Exchange stands with Boston. If you or your firm would like to contribute to the One Fund Boston to help provide direct assistance to the families and victims affected, please click on this link: onefundboston.org. We are Boston strong!
Bloomberg lawsuit will not stem swap futures
The Trade News
Bloomberg’s legal action against the Commodity Futures Trading Commission (CFTC) this week will not constrain the growth of swap futures, experts have warned.
***JM: Well, good, since I don’t recall anything about suing the CFTC because of the existence of swap futures; just the margin disparity.
For richer or poorer: Bank of Korea to host weddings
Reuters via Yahoo! News
By Christine Kim SEOUL – Dealing with monetary policy and interest rates is the Bank of Korea’s main role, but in May it will start hosting weddings – in an auditorium hung with the portraits of former central bank governors. Employees from the Bank of Korea will be allowed to get married inside the grey, fortress-like building at weekends, according to an internal memo released earlier this month.
***JM: A free toaster would make this just perfect in so many ways.
**JK – And will they offer joint checking accounts?
U.K. Terrorist Lost Thousands on Currency Trades for Foiled Plot
From a suburban house in the central English city of Birmingham, Rahin Ahmed traded dollars and euros to raise money for what prosecutors said could have been the biggest terrorist attack on U.K. soil. Over four weeks in 2011, his group’s plan to use backpacks to plant bombs around the country fell apart as he lost 62 percent of his 14,550 pounds ($22,000) on small-volume currency trades.
***JM: I think maybe we need a regulatory exception that encourages terrorists to trade “guaranteed riches in the forex markets” schemes.
A Hedge Fund Manager Explains Why He’s Cutting Back On Twitter
A US based hedgie sent out a note to its clients over the weekend, saying they cut back on their use of Twitter.
***JM: Sometimes, the seagulls on the beach are just birds making noise…
Bernanke to miss conference, hinting at departure
Associated Press via Yahoo! News
Ben Bernanke is intensifying speculation that this year will be his last as Federal Reserve chairman by deciding to skip the Fed’s annual August conference in Jackson Hole, Wyo. A Fed spokesman said Monday that Bernanke won’t attend because of a “personal scheduling conflict.”
***JM: Holy cow, can’t a guy wash his hair in peac… say what now? Oh… oh, I see. Never mind.
**JK – That, and Bernanke saying “Geez, when did they put Jackson Hole on the schedule?”
A Direct Link to China’s FCM Community
This Saturday, April 27, the China Futures Association (CFA) and the Chinese Derivatives Association (CDA) will host the 2013 Spring China – U. S. Futures Industry Summit, from 4-8pm at Chicago’s Metropolitan Club, 233 S. Wacker Dr. The afternoon/evening event will feature presentations on emerging trends and opportunities in China’s derivatives market, product and regulatory updates, and a unique opportunity to mix and mingle with 50 senior executives from the Chinese FCM community.
Why is such a large delegation from China’s futures market here in Chicago? According to Yuhua Yu, head of quantitative research at DRW Trading Group and president of the CDA, the executives are currently taking part in a six-week course on the U.S. futures market, taught by faculty from the University of Chicago Booth School of Business. Yu, along with DRW colleague Carmen Li, who also serves as vice-president of the CDA, have put together this event to further bridge the U.S. and China futures communities. To learn more about and register for the event, click the link below.
FIA Chicago 2013 Membership Drive
This year’s FIA Chicago Division membership drive is quickly coming to an end. To those who have not done so yet, and to ensure your name appears in our membership directory, we are asking you to renew your membership by Friday, May 3. But please do not stop there – please extend this invitation to others throughout your organization who can represent your firm’s issues as well as benefit from meeting and discussing industry issues with other FCM representatives along with exchange and clearing leaders. Joining the division, or renewing your membership, is as easy as following the instructions at the following link: futuresindustry.org/chicago. If you have questions regarding your membership status or the status of others at your firm please contact Joseph Sagil at (312) 730-9775, or email@example.com.
Free DTN/CME Group Crop Outlook Seminar Wednesday, CBOT
This year is expected to be a critical one for agriculture, with challenges to long-term demand in the corn market. Please join DTN Senior Analyst Darin Newsom, DTN Senior Ag Meterologist Bryce Anderson and CME Group’s Susan Sutherland, at 2:30 pm on Wednesday, April 24 at the CBOT Building, 141 W. Jackson, Chicago. Cocktail reception immediately following.
Event: Follow the Money: Business Reporting
When: April 27, 2013, 10:00am
Where: Columbia Journalism School, W. 116 and Broadway, New York City
This day-long workshop is taught by Leslie Wayne, a Columbia professor and former award-winning New York Times business reporter. The course is designed to enable you to improve your financial literacy, help you break stories and hold officials accountable, regardless of your beat. It will teach you how to read financial statements, search government documents for information on corporate executives and public officials and understand the current financial crisis. Cost $275, contact firstname.lastname@example.org for more information.
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
38,306,084 pages viewed, 7,457 articles, 157,499 edits
CBOE May Retire From Police Beat
JACOB BUNGE – Dow Jones
The parent of the Chicago Board Options Exchange is considering whether to separate out its regulatory division in the wake of a continuing federal probe into potential conflicts of interest, people close to the discussions said. The largest U.S. options exchange currently oversees the market activity of its own customers as well as those at some of its rivals but has discussed forming a new, independent regulator or handing over those responsibilities to another agency.
***JM: Independence is good for oversight, but doesn’t by itself create good oversight.
CFTC’s Gensler Says Libor Should Be Ditched
Libor and other benchmark interest rates pose a threat to financial stability and should be scrapped, the chairman of the U.S Commodity Futures Trading Commission said Monday.
Bankers play to win in regulatory scrimage
This week’s letter from Michel Barnier, the Commissioner for Europe’s Internal Market and Services, to Ben Bernanke, chairman of the US Federal Reserve, highlights again the tensions that exist between Europe and the US over respective efforts to bring stability to the financial system.
S&P Says Justice Department Lawsuit Against Firm Should Be Dismissed
Regulators, lawmakers and investors have said the payment system presents a potential conflict of interest that could provide an incentive for Standard & Poor’s and its rivals to cater to bankers and other issuer clients. But Standard & Poor’s, a unit of McGraw-Hill Cos., has long pushed back, saying its standards of objectivity and independence mitigate potential conflicts of interest.
***JM: If it swims like a puffery-fish…
Luxembourg Backs Challenge to Financial Transaction Tax
New York Times
Luxembourg’s finance minister said his country would support Britain’s legal challenge to Europe’s proposed Financial Transaction Tax.
BM&FBovespa Says It’s Done With Big Fee Cuts
Ney Hayashi & Arnaldo Galvao – Bloomberg
BM&FBovespa SA, the operator of Latin America’s biggest securities exchange, plans to hold fees steady after cutting levies on equities trading by 82 percent since 2011, Chief Financial Officer Eduardo Guardia said.
China Said to Ask Bond Traders to Check Transactions Amid Probe
China’s central bank asked participants in the nation’s interbank bond market to examine trading histories, said two people with knowledge of the matter, amid reports of a probe into illegal transactions.
German Banks Blast Merkel Proprietary Trading Split Plan
Germany’s banks criticized plans by Chancellor Angela Merkel’s government to force them to separate some investment-banking operations from units that work for corporate and retail clients.
Commodities: Against the grain
Gregory Meyer – FT.com
Ethanol was hailed as the super-fuel to end US dependency on imports, but demand has stalled
Current Account: New Recipe for Returns in Risk Era
FRANCESCO GUERRERA – WSJ.com
Clifford Asness knows value, and not just in financial markets. When we met at an old-school New York steakhouse last week, Mr. Asness, founder of hedge-fund firm AQR Capital Management, wasn’t in the mood to leave money on the table. As our slabs of meat arrived, Mr. Asness declared he would eat only half and have the rest packed. The steak would come in handy with some eggs for breakfast the following day, he explained.
Co-Directors for S.E.C., Ceresney and Canellos, Signal Shift
BEN PROTESS – NYTimes.com
The Securities and Exchange Commission ushered in a new era of leadership on Monday, appointing a former federal prosecutor turned defense lawyer to help run the unit that polices the front lines of financial fraud. While the shake-up comes as the financial misdeeds of 2008 fade from view, the S.E.C.’s enforcement team will soon confront a fresh batch of challenges under its new leader, Andrew J. Ceresney.
Susan Axelrod Named FINRA’s Executive Vice President of Regulatory Operations
The Financial Industry Regulatory Authority (FINRA) announced today that Susan Axelrod will become FINRA’s Executive Vice President of Regulatory Operations. In this role, Axelrod will oversee Enforcement, the Office of Fraud Detection and Market Intelligence and Member Regulation
Bernanke Warned by Barnier That Bank Unit Rules Risk Retaliation
The European Union intensified its campaign against U.S. Federal Reserve proposals to toughen oversight of bank units belonging to overseas lenders, warning of “potential retaliation” against the plans because they will drive up costs.
SEC Announces Agenda for May 1 Meeting of Advisory Committee On Small and Emerging Companies
The Securities and Exchange Commission today announced the agenda for a meeting of its Advisory Committee on Small and Emerging Companies on Wednesday, May 1.
IOSCO Publishes Report On Technological Challenges To Market Surveillance
Institutional Investors: Power And Responsibility, Speech By SEC Commissioner Luis A. Aguilar – Georgia State University — J. Mack Robinson College Of Business Center For The Economic Analysis Of Risk (CEAR)
Remarks Of CFTC Chairman Gary Gensler At London City Week On Benchmark Interest Rates
Good afternoon. Thank you, Anthony, for that kind introduction. I’m honored to be joining you for City Week.
Continuous Disclosure: Guidance Note 8 Rewrite – Speech Delivered By Belinda Gibson, Deputy Chairman, And John Price, Commissioner, Australian Securities And Investments Commission At The ASX Forum, 22 And 29 April 2013.
[France] Banque de France and the Autorité des marchés financiers draw attention to an international consultation on authorities’ access to trade repositaries data.
[France] AMF Position 2012-12: A guide to fees
[Japan] FSA extends temporary measures to restrict short selling and to facilitate share repurchase by publicly listed companies
Exchanges & Trading Facilities
BME and Société Genérale host the first IBEX Trading Day
On 25 April BME and Société Genérale will host the first IBEX TRADING DAY in the Madrid Stock Exchange Palace Building. The event is aimed at promoting and encouraging the use of IBEX 35 indices and the listed products linked to them.
Montreal Exchange Launches Futures Contracts On Trading Simulator
Montréal Exchange Inc. (MX), a wholly-owned subsidiary of TMX Group Limited and Canada’s derivatives exchange, today launched futures contracts on its Trading Simulator.
NASDAQ OMX Completes Acquisition Of 25% Stake In Dutch Derivatives Trading Venue TOM
The NASDAQ OMX Group, Inc. (Nasdaq: NDAQ) today announced that it has received the necessary regulatory approval for the completion of its acquisition of 25 percent of the Dutch cash equity and equity derivatives trading venue TOM, The Order Machine. The agreement also includes an option for NASDAQ OMX to acquire an additional 25.1 percent of the remaining shares to secure a majority stake in TOM.
CME Group Holds Moment Of Silence For Those Affected By Attacks In Boston, MA
Boerse Stuttgart: Ekotechnika Gmbh Issues Bond In Bondm Segment – Investors Can Subscribe To The New Bond Issue Starting On 29 April
NYSE Liffe welcomes Holly Su Futures as a new member
[CBOE] Continuing Education Firm Element Advisory
Moscow Exchange: Trading Hours For Odd Lots To Be Changed
Simon Allen Reappointed Chair Of New Zealand’s Financial Markets Authority
ADX Meets Custodians To Discuss Development Of DVP
Hedge Funds & Managed Futures
Europe COO exits Evercore
Giles Turner – Financial News
One of the senior members of Evercore Partners’ investment banking team in Europe – which has been enjoying a period of consistent revenue growth – has left.
Heard on the Street: Private Equity’s Zombie Problem
HELEN THOMAS – WSJ.com
Private equity claims to be adept at revamping beleaguered businesses. But who will clear up the industry’s own group of stragglers? Firms dogged by poor performance have been shut out of raising money for several years, surviving on management fees and the hope that economic recovery will bail out troubled portfolios. Investors have limited options to speed up change.
Complete Hedge Fund Performance Update
Curious how hedge funds are faring against each other and against the market? Then this HSBC hedge fund performance update through mid-April is for you.
Physicist hedge fund guru posts lukewarm returns
Being smart doesn’t necessarily translate to being a great investor or fund manager
***JM: Correct. Being (ANYTHING) doesn’t necessarily translate to being a great fund manager, other than being a great fund manager.
Roman to speak at third annual FN Hedge Fund Awards
Harriet Agnew – Financial News
Manny Roman, the new chief executive of Man Group, will be the keynote speaker at Financial News’s third annual Awards for Excellence in Institutional Hedge Fund Management, Europe 2013.
Goldman Sachs Alumni Sze’s Azentus Hedge Fund Said to Return 8%
Azentus Capital Management Ltd., led by former Goldman Sachs Group Inc. proprietary trader Morgan Sze, returned 8 percent before fees this year through yesterday, according to a person with knowledge of the matter.
Credit Suisse sells private equity unit to Blackstone
Reuters via Yahoo! Finance
Credit Suisse Group AG has agreed to sell a private equity business to Blackstone Group, the latest move by an investment bank to sell a business with illiquid assets in order to appease regulators and bolster its balance sheet.
OTC Derivatives Markets Poised for Growth in Asia, According to Report Published at ISDA’s 28th Annual General Meeting
Business Wire via Yahoo! Finance
The over-the-counter derivatives markets are poised for further growth in Asia, according to a report published today by the International Swaps and Derivatives Association, Inc.
Argentina’s New Debt Offer Rejected by Holdout Creditors
SHANE ROMIG, KATY BURNE and CHAD BRADY – Dow Jones
Holdout creditors on Friday rejected Argentina’s proposal to pay them about 20 cents on every U.S. dollar of bonds they own, leaving a U.S. appeals court to decide how to enforce a ruling that may push Argentina into a new default.
Banks & Brokers
HSBC chairman warns poorer customers could lose out
Reuters via Yahoo! News
LONDON – HSBC’s Chairman Douglas Flint has warned less well-off customers could lose access to basic financial services if lenders are overburdened by unnecessary regulation. “I do worry that we are beginning to see the industry move towards serving higher net worth individuals and moving away from the bottom of society,” Flint told the City Week banking conference.
Banks May Lose $17 Billion of Revenue, Report Says
Investment banks may lose $17 billion of revenue in fixed income, currencies and commodities by 2016 because of levies and regulation, according to a Deutsche Bank AG report.
Credit Suisse Earning More Than UBS Still Trails With Investors
Credit Suisse Group AG will probably post higher profit than UBS AG for a fourth straight quarter when the largest Swiss banks report results over the next week.
JPMorgan, Barclays Seen Topping OTC Commodity Derivatives Market
JPMorgan Chase & Co. and Barclays Plc were the top firms for providing over-the-counter commodity derivatives to companies hedging energy and metals exposure, while investors favored Goldman Sachs Group Inc. , a Greenwich Associates survey found.
2 banks converge on Salt Lake City for meetings
Tacoma News Tribune
The spring ritual of bank shareholder meetings is starting this week, and two major banks — San Francisco-based Wells Fargo and New York-based Goldman Sachs — are decamping from their hometown cities to Salt Lake City.
Mike Mayo Will Ask Citi The Tough Question It Doesn’t Want To Answer At Wednesday’s Shareholder Meeting
The once boring bank shareholder meetings are heating up and becoming more unpredictable. Analyst Mike Mayo’s attendance at Citi’s meeting this week is a good example.
Morgan Stanley Wealth Management Investor Pulse Poll Shows Broad Optimism About the Markets and U.S., Global Economies
Morgan Stanley Wealth Management Investor Pulse Poll Shows Regional Differences Among 8 U.S. Metropolitan Areas
Clearing & Settlement
Cooperation between Clearstream and Standard Chartered expands Global Liquidity Hub agent bank solution into Asia
Clearstream and Standard Chartered Bank are to cooperate on developing a customised collateral management solution for their mutual clients. The two companies have signed a letter of intent that has signalled the start of their development collaboration to enable customers of both Clearstream and Standard Chartered to benefit from the Liquidity Hub Connect collateral management service.
Five Leaders In Global Capital Markets Join DTCC’s Board Of Directors
The Depository Trust & Clearing Corporation (DTCC) today announced the addition of five highly regarded and recognized leaders in global finance to its Board of Directors.
Peter Tierney Joins DTCC As Regional Head Of Asia, DTCC Deriv/SERV
Citi Publishes First Ever XBRL Dividend Message Over DTCC
Indexes & Products
Deutsche Börse receives two Global ETF Awards in New York
At this year’s 9th Annual Global ETF Awards in New York Deutsche Börse received awards in the following two categories for the ninth consecutive time: “Exchange with the largest number of primary listed ETFs in Europe” and “Largest Exchange for ETFs by Dollar Turnover in Europe”.
STOXX Limited Named “Most Innovative ETF Index Provider For Europe” For Fourth Time
Moscow Exchange Indices Weekly Review: April 15 – 19, 2013
Markit adds risk and scenario analysis tools to portfolio valuations service
Markit, a leading, global financial information services company, today announced it has added a range of risk and scenario analysis tools to its award-winning Portfolio Valuations service.
SunGard to Announce First Quarter 2013 Results on May 2, 2013
SEC Charges Former Executive with Insider Trading On Nonpublic Information Obtained as Part of Professional Group
The Securities and Exchange Commission today charged a former corporate executive living in South Florida with insider trading based on confidential information that he learned as part of a professional organization.
SEC Announces Non-Prosecution Agreement With Ralph Lauren Corporation Involving FCPA Misconduct
The Securities and Exchange Commission today announced a non-prosecution agreement (NPA) with Ralph Lauren Corporation in which the company will disgorge more than $700,000 in illicit profits and interest obtained in connection with bribes paid by a subsidiary to government officials in Argentina from 2005 to 2009. The misconduct was uncovered in an internal review undertaken by the company and promptly reported to the SEC.
Deductive Reasoning Can Be a Dangerous Thing
A recent case involving a Canadian investment banker raises an interesting question about whether a person’s own intuition about a merger constitutes illegal insider trading charge. The answer becomes even more difficult when two securities regulators reach different conclusions about whether there was any confidential information involved.
Sebastian Losses Were ‘Worst Nightmare,’ Vik Told Deutsche Bank
Deutsche Bank AG said it wasn’t to blame for 2008 losses on currency trades by Alexander Vik’s Sebastian Holdings Inc. that the Norwegian entrepreneur described in a phone call as his “worst nightmare.”
Environmental & Energy
Nasdaq set for Europe energy trades push
Nasdaq OMX is preparing a push into Europe’s commodities and energy markets, which will put it head to head with Deutsche Börse and Intercontinental¬Exchange in the region’s emerging market for trading power.
Cap-and-trade programs in California and Quebec to merge
California’s air quality officials soon may be adding a new phrase to their bureaucratic vocabulary: “le rechauffement climatique.”
Ignoring Carbon Cost ‘Bad Investment Decision,’ David Blood Says
David Blood, who co-founded Generation Investment Management LLP with Al Gore, said investors should stop giving money to companies that don’t account for the cost of pumping carbon into the atmosphere.
HKEx And Anhui Financial Services Office Sign MOU
Hong Kong Exchanges and Clearing Limited (HKEx) and Anhui Financial Services Office today (Monday) signed a Memorandum of Understanding (MOU) on cooperation and exchange of information.
Thai Bourse Market Report For Q1/2013 And March 2013
Thai bourse enjoyed increasing interest from investors, gained higher liquidity in stock trading, and hit several new trading records during the first quarter of 2013, due to the improvement of monetary and fiscal policies in various key economies, including the U.S., China and Japan, which started to pay off and help rectify the slowdown, together with improved earnings of Thai listed companies.
Shanghai Stock Exchange Rushes Into Earthquake Relief
Shenzhen Stock Exchange Initiates Immediate Response to Earthquake In Sichuan
Boutique Derivatives Brokerage Opens in Hong Kong
Isabella Steger – WSJ
Mariana Capital Markets Asia, a boutique brokerage firm founded by former Lehman Brothers derivatives bankers, has opened in Hong Kong.
SGX Launches New Listings Web Pages
Thai Bourse Lowers Exchange Fees On SET50 Index Futures And Gold Futures, Effective May 2
OTC Derivatives Markets Poised For Growth In Asia, According To Report Published At ISDA’s 28th Annual General Meeting
Tokyo Stock Exchange: New ETF To Be Listed On May 9, 2013 (Thu.) – Simplex AM
Securities And Futures Commission Reprimands And Fines Sun Hung Kai Investment Services Limited
John Prestbo’s Indexed Investor: Go into Africa ETFs, with money and time
A recent vacation trip to southern Africa showed columnist John Prestbo the tremendous potential this continent has for economic growth. The visit also made clear that many challenges must be surmounted for this potential to become reality.
BofA Recommends Holding Dubai Debt on Restructuring, Recovery
Bank of America Merrill Lynch recommends investors hold higher-yielding Dubai debt as the emirate, which was on the brink of a default in 2009, benefits from an economic rebound and meets payment obligations.