Industry news
Date: May 14, 2013
May 14, 2013: NYSE Keeps Options Open to Exit Euronext; Watchdog probes 1m US swap contracts; INTL FCStone Inc. to Acquire Control of Cleartrade Exchange
NYSE Euronext hasn’t yet decided on how to separate its Euronext unit, as interest in that division increases from other players. The CFTC is looking for confirmation that a large number of metals and energy trades by major traders over the past two years were legitimate. Financial service company INTL FCStone announces a 90 percent acquisition of Cleartrade Exchange.
First Read
Number of Cross-Listed Futures Doubles as Investors Search for Better Access to Global Markets, Says TABB
In a new report, international capital markets research firm TABB says cross-listed futures, which have more than doubled since 2010, can succeed as investors across the financial markets continue to allocate a greater percentage of their assets to non-domestic exposures. Cross-listed futures allow investors to trade foreign-based futures contracts on their local exchange.
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**** Cross-listing versus the CLOB. Let the battle begin.
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Markets Insight: Cultures clash in Istanbul
Ralph Atkins in Istanbul – FT.com
The clichés are apposite: Istanbul is where cultures collide. Europe meets Asia; Christian history meets Islam. It is also where financial market cultures clash.
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**** Turkey is a hot subject.
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Is the Fed Afraid to Regulate the Big Banks?
Simon Johnson – Bloomberg
The skirmishing is almost over, the main armies almost assembled. Ahead is a great battle over the future of our financial system that could have more profound consequences than the Dodd-Frank legislation of 2010. The battleground is the hearts and minds — and fears — of the seven people who make up the board of governors of the Federal Reserve System
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**** The Federal Reserve is afraid of nothing, except, well, unwinding the biggest trade in the history of mankind.
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optionMONSTER Holdings, Inc. Wins 2013 Illinois Technology Association “Outstanding Technology Development” CityLIGHTS Award
optionMONSTER Holdings, Inc., the parent of tradeMONSTER, the online brokerage industry’s leader in user experience, has been honored with a 2013 Illinois Technology Association CityLIGHTS Award in the “Outstanding Technology Development” category. The venerable award goes to the ”company or organization that utilizes or developed a technology tool, process or service that accelerated growth.”
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***** optionMONSTER is a company to watch.
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Supreme Court Denies Appeal on Options Dispute
JACOB BUNGE And BRENT KENDALL – WSJ.com
The U.S. Supreme Court on Monday decided not to take up a long-running legal battle between exchanges over the right to trade lucrative options contracts. The action is the highest-profile yet in the six-and-a-half-year dispute and centers on contracts linked to major stock indexes, which analysts estimate generate each year tens of millions of dollars in exchange fees.
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***** Don’t worry, the ISE will find another reason to get under the CBOE’s skin, I just know it.
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Forging Its Own Path, British Hedge Fund Finds Success
WILLIAM ALDEN – NYTimes.com
Ewan M. Kirk never quite fit the Wall Street mold. As a partner at Goldman Sachs, he wore a kilt to the firm’s annual black-tie dinner in New York. After leaving Goldman, Mr. Kirk, an astrophysicist by training, set up a hedge fund in Cambridge, England, a world away from the fashionable neighborhood of Mayfair in London where many hedge funds are based.
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***** Cutting fees while wearing a kilt can be dangerous.
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ICAP cost-cuts deepen with over 340 job losses
Philip Stafford – FT.com
ICAP, the interdealer broker, cut the jobs of 344 of its dealers who trade by phone as it deepened cost savings following what it called an “extraordinarily tough year” of trading.
jlne.ws/15ISOxR
***** “extraordinarily tough year” may be an understatement.
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Tower Fund Services Shares Six Keys to Raising Capital for a Hedge Fund
PRWeb
A look at tactics to successful marketing and fund raising for alternative investment funds. In a world with over 8,000 hedge funds all chasing the same capital with relatively the same returns, there are ways to stand out in the crowd.
jlne.ws/15ISMWL
***** Jim Kharouf gets really mad when I use my favorite quote from the late management consultant Peter Drucker, who said business is about 2 things, innovation and marketing. He says I use it too much. He even bought me a book of Peter Drucker quotes in order to get me to try something new. You would think it would have worked by now, but no, it did not.
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Brokers Go Gray as Youth Unsustainable Without Cold Calls
Bloomberg
Alex Freemon was so eager to be a stockbroker after graduating from the Georgia Institute of Technology last year that he said he was happy to go door to door selling mutual funds for Edward Jones & Co.
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***** I was once a broker who made cold calls. It is a tough business.
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Lead Stories
NYSE Keeps Options Open to Exit Euronext
By TIM CAVE and MICHELLE PRICE – Financial News via Fox Business
NYSE Euronext (NYX) is considering a dual-track process to either sell or spin off a European stock trading business that’s attracting interest from potential private equity suitors, according to people familiar with the situation.
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Watchdog probes 1m US swap contracts
Gregory Meyer and Kara Scannell in New York – FT.com
A top US financial regulator has launched a broad inquiry into the legitimacy of more than 1m energy and metals transactions by the biggest traders in commodities markets over the past two years. The Commodity Futures Trading Commission has issued a “special call” asking Wall Street banks and other traders to provide documents that would prove recent derivatives transactions known as “exchanges of futures for swaps” were legal.
jlne.ws/15ISMWR
***** This is a big look into trading of swaps and exchange for futures for swaps.
INTL FCStone Inc. to Acquire Control of Cleartrade Exchange
INTL FCStone Inc., a provider of execution and advisory services in commodities, currencies and international securities, today announced that it has agreed with Cleartrade Exchange to acquire immediate voting control and the right to acquire up to 90% of equity interest over a five-year period.
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***** INTL FCStone needs some good news.
Bloomberg users’ messages leaked online
Daniel Schäfer in London and Andrew Edgecliffe-Johnson in New York – FT.com
More than ten thousand private messages sent between users of Bloomberg’s financial terminals have leaked online, undermining the company’s attempts to restore faith in its ability to keep client data confidential as it scrambles to allay clients’ privacy concerns.
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***** This is not pretty. And will get uglier.
Safeguarding Customer Data – Statement From Daniel L. Doctoroff, CEO And President, Bloomberg L.P.
Client trust is our highest priority and the cornerstone of our business, and we are deeply committed to ensuring the complete integrity and confidentiality of our clients’ data in all situations and at all times.
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FDIC and Bloomberg
MICHAEL R. CRITTENDEN And WILLIAM LAUNDER – WSJ.com
The Federal Deposit Insurance Corp. and other government agencies have been in contact with Bloomberg LP in the wake of last week’s disclosure that its journalists until recently had access to certain customer data, according to people familiar with the matter.
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ICAP CEO Says No Inappopriate Conduct Found in ISDAFix
Liam Vaughan – Bloomberg
ICAP Plc Chief Executive Officer Michael Spencer said an internal probe into allegations brokers manipulated ISDAFix, the benchmark for the $379 trillion swaps market, found no evidence of wrongdoing.
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Off-Exchange Trading Falls to 35% in April
Traders Magazine
Off-exchange trading fell to 35.0 percent of shares exchanged on all lit and unlit venues in April, according to statistics maintained by BATS Global Markets and Nasdaq OMX Group. That is the third straight drop in share of off-exchange trading, since a recent peak of 36.7% in January.
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Regulatory
SEC Chairman Reviewing Company Cybersecurity Disclosures
Bloomberg
U.S. Securities and Exchange Commission Chairman Mary Jo White has asked her staff to review whether publicly traded companies should be prodded to disclose more information about cyberattacks on their computer networks.
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CFTC SEF Debate Sets Up Dodd-Frank Showdown
WatersTechnology
The US Commodity Futures Trading Commission (CFTC) has set a date of May 16 for a public meeting, over key elements of rules that govern how swap execution facilities (SEFs) will work. In the agenda, the CFTC has listed core principles and requirements for swap execution facilities, large swaps trades for block SEFs, and procedures for making a contract available to trade on the facility as being the key points of discussion.
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TABB Group CEO Says Questionable Effectiveness of SEC’s Reg. NMS Rules Needs to be Investigated
In a market structure-focused research report published today, Larry Tabb, founder and CEO of TABB Group, the capital markets research and consulting firm, addresses the need to rethink how markets should operate and tweak, or even scrap, Regulation National Market System (Reg. NMS) that so many institutions have come to loathe.
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ISDA Publishes ISDA 2013 Reporting Protocol And Side Letters
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the launch of the ISDA 2013 Reporting Protocol. The ISDA 2013 Reporting Protocol, which contains a counterparty’s consent to the disclosure of information, is intended to facilitate market participants’ compliance with mandatory trade reporting requirements.
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Georgia Southern University Commencement Address: Preparing For Challenges And Opportunities By Commissioner Luis A. Aguilar
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Remarks At SRO Outreach Conference By SEC Commissioner Elisse B. Walter
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Exchanges & Trading Facilities
PUMA Trading System: BM&FBOVESPA celebrates a month of BOVESPA segment transactions at the new platform
Period has two message and trade records for a one-minute peak in the BOVESPA segment and 20,708,540 total trades at the platform
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TMX Group Announces Election of Directors
TMX Group today announced that the nominees listed in the management proxy circular for the 2013 Annual and Special Meeting of Shareholders were elected as directors of TMX Group Limited. Detailed results of the vote for the election of directors held at the Annual and Special Meeting on Friday May 10, 2013 in Toronto are set out below.
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Burgundy: 67 % Of Trading In Swedish Equities On Alternative Marketplaces
jlne.ws/15ISPSw
Liquidnet Makes Senior Hires To Support European Growth
Liquidnet, the global institutional trading network, announced today two senior appointments to its London based EMEA trading team to further strengthen and develop relationships with its community of leading asset management firms.
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Toronto Stock Exchange, TSX Venture Exchange, Montreal Exchange, TMX Select and Alpha Closed for Victoria Day
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Migration Of SPECTRA To M1 Data Center
As part of technology infrastructure development strategy, the Moscow Exchange has planned to migrate SPECTRA platform to the M1 data center (125 Varshavskoe shosse, Moscow) which plays the role of the main Moscow Exchange data center. The migration should be completed by Q3 2013.
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NZX Expands Global Reach Through BT Radianz Services
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Hedge Funds & Managed Futures
NY state’s pension fund reaches record $160B
Associated Press via Yahoo! News
The New York pension fund for state and local government workers has topped $160 billion after reporting a 10.4 percent return on investment for its last fiscal year, the state comptroller’s office reported
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Ex-BlackRock portfolio manager arrested in insider dealing probe
Brooke Masters, Chief Regulation Correspondent – FT.com
A former star portfolio manager at BlackRock is the latest person to be arrested in the Financial Conduct Authority’s campaign to stop insider dealing by City professionals.
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An S.E.C. Settlement That Seems to Favor Falcone
New York Times
Philip Falcone and his hedge fund are not acknowledging wrongdoing as part of a settlement with the S.E.C., and the agency is not even asking for an injunction against Mr. Falcone, the author writes.
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Roman debunks gold myth
Harriet Agnew – Financial News
Manny Roman, the new chief executive of the UK’s largest listed hedge fund manager Man Group, has said that the price of gold should fall to $1,000.
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Banks & Brokers
Wildenberg to leave Citi for Neonet
Philip Stafford – FT.com
Tim Wildenberg, head of electronic trading at Citi, is set to be named as chief executive of Neonet, the private equity-backed broker, according to two people familiar with the situation.
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INTL FCStone Inc. Names Scott Branch as President
INTL FCStone Inc. today announced that the board of directors has appointed Scott Branch to the office of President of INTL FCStone Inc. Mr. Branch joined INTL FCStone (or International Assets Holding Corporation, as it was then known) in October 2002 as President and was elected to the board of directors in December 2002, after making a substantial investment in the company.
jlne.ws/15ISP53
BGC Partners Appoints Jean-Jack Badet As General Manager, Switzerland
BGC Partners, Inc., a leading global brokerage company servicing the wholesale financial and real estate markets, today announced the appointment of Jean-Jack Badet as General Manager of its business in Switzerland. Based in Nyon, Mr. Badet will be responsible for all of BGC’s Financial Products business in Switzerland and helping drive business growth in Switzerland.
jlne.ws/15ISQ91
JPMorgan Says It Faces Enforcement on Consumer Practices
Bloomberg
JPMorgan Chase & Co. , the biggest U.S. bank by assets, said it will face enforcement action from federal regulators over its collection practices and add-on products commonly appended to credit cards.
jlne.ws/15ISPlj
J.P. Morgan Investors Examine Links With Directors
FOX Business
Shareholders are taking a close look at financial relationships between some J.P. Morgan Chase & Co. board members and the company they oversee, in a sign of the scrutiny the nation’s largest bank faces in the wake of a multibillion-dollar trading loss last year.
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Goldman Sachs Head Of Australian Cash Equities Simon Greenaway Retires – Source
Gillian Tan – Dow Jones
Simon Greenaway, an Australia-based Goldman Sachs managing director, has announced his retirement, a person familiar with the matter said Tuesday.
jlne.ws/15ISPln
HSBC puts a slice of private bank up for sale
Sarah Krouse – Financial News
HSBC has put part of its global private bank up for sale. It has reclassified assets as non-core, which reduced revenues and pushed the operation into the red in the first three months of this year.
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Monte Paschi Seen Posting Fourth Straight Loss on Lending Income
Bloomberg
Banca Monte dei Paschi di Siena, the bailed-out Italian bank embroiled in a fraud probe, will probably report a fourth straight quarterly loss as lending income falls.
jlne.ws/15ISQpo
Morgan Stanley CEO Gorman Faces Hot Seat
CNBC
Morgan Stanley Chairman and CEO James Gorman may face some intense questioning Tuesday at the firm’s annual meeting in Purchase, NY. The shares are down more than 19 percent since Gorman took the helm in January, 2010. The stakes are high.
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Lazard Capital Markets Weighs Sale Among Strategic Options
Bloomberg
Lazard Capital Markets LLC, the closely held brokerage controlled by current and former Lazard Ltd. employees, is exploring strategic options including a sale or joint venture, according to a spokesman.
jlne.ws/15ISPlr
ICAP: Full-year results for the year ended 31 March 2013
ICAP plc, the world’s leading interdealer broker and provider of post trade risk and information services, today announced its audited results for the year ended 31 March 2013.
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Federal Reserve Board Announces That Results Of Company-Run, Midyear Stress Tests Are Due On July 5
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Clearing & Settlement
DTCC Celebrates 40th Anniversary of Depository Operations and Showcases New Brand Identity
Business Wire via Yahoo! Finance
Marking 40 years of service to the financial industry, The Depository Trust & Clearing Corporation has launched a new corporate brand positioning line – Securing Today. Shaping Tomorrow. which supports the strategic vision of the company and complements its new visual identity.
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BME Welcomes “Reform Of Registration, Clearing And Settlement System” By CNMV
BME welcomes the publication by the Spanish Stock Market regulator, the CNMV, of the document “The reform of the Registration, Clearing and Settlement System”, whose aim is to show the main progress made in the development of the new Securities Clearing, Settlement and Registration System of the Spanish Market.
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CME Group Clearing Advisory: Change to Interest Rate Swap Price Curve
jlne.ws/15ISQpD
CME Group Clearing Advisory: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (A) Effective Tuesday, May 14, 2013
jlne.ws/15ISPBX
Indexes & Products
TSE : JPX Group and Nikkei Agree on Joint Development of New Index
jlne.ws/15ISQFX
Changes To The Composition Of The Oslo Børs Benchmark Index (OSEBX)
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Semi-Annual Changes To The NASDAQ Biotechnology Index
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Moscow Exchange Indices Weekly Review: May 6-10, 2013
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KBW Announces Change to KBW Regional Banking Index (KRXSM)
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Technology
Cidron Delfi Intressenter AB and Orc Group invite to an investor telephone conference on May 29
Cidron Delfi Intressenter AB and Orc Group invite you to attend an investor telephone conference (in English) on Wednesday, May 29, 2013 at 3.00 p.m. CEST. CEO Torben Munch and CFO Tomas Ljunglöf will present and comment on the group´s interim report for January – March 2013.
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Lombard Risk Announces Record Results For Year Ending 31 March 2013
John Wisbey John Wisbey, Chief Executive Officer, Lombard Risk says: “This year was a record year both for revenue and profit with 31% headline growth in revenues to £16.8m and a rise of 77% in EBITDA to £ 5.3m. This growth was achieved despite the European Banking Authority delaying new regulatory reporting requirements in our key EMEA market, which deferred some revenues into the next period.”
jlne.ws/15ISSxJ
Credit Europe Bank adopts SDX to boost structured products offering
Credit Europe Bank NV, one of the top 10 banks in the Netherlands,has chosen SDX, the real-time cross-asset front office system from SuperDerivatives, to enhance its structured products offering in equities and forex.
jlne.ws/15ISQGa
SIX Financial Information to Become Main Data Provider for Patria Direct
SIX Financial Information has acquired a new client, Patria Direct, which operates one of the biggest online financial portals in the Czech Republic.
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GoldenTree Asset Management Expands With Paladyne Data Management Warehouse
jlne.ws/15ISQWq
Enforcement
CFTC Charges Global Precious Metals Trading Company and Michael Ghaemi of Coral Gables, Florida with Fraudulent Precious Metals Scheme
The U.S. Commodity Futures Trading Commission (CFTC) today filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Defendants Global Precious Metals Trading Company, LLC (GPMT) of Coral Gables, Florida, and its owner Michael Ghaemi, who resides in Miami, Florida. The CFTC’s Complaint charges that, since July 2011, the Defendants solicited and accepted more than $800,000 from approximately nine U.S. customers in connection with illegal off-exchange retail commodity transactions and then misappropriated virtually all of the customers’ funds.
jlne.ws/15ISSO7
Federal Court Orders Ohioans Kevin and Keelan Harris, Canada-based Karen Starr, and their Companies, Complete Developments, LLC and Investment International Inc., to Pay over $23 Million for Fraud in Foreign Currency Ponzi Scheme
The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Judgment requiring Defendants Kevin Harris, Keelan Harris, Complete Developments, LLC (CDL), and Investment International Inc. (a/k/a/ I3), all of Warren, Ohio, and Karen Starr of Barrie, Ontario, Canada, collectively to pay restitution and civil monetary penalties of over $23 million for solicitation fraud and misappropriation in connection with operating a multi-million dollar off-exchange foreign currency (forex) Ponzi scheme.
jlne.ws/15ISQWs
Ex-BlackRock Manager Said to Be Arrested in UK Probe
Bloomberg
Former BlackRock Inc. fund manager Mark Lyttleton was arrested April 30 as part of an insider trading probe by the U.K. Financial Conduct Authority, two people familiar with the matter said.
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Connecticut hedge fund boss gets 6 1/2 years in insider case
New Haven Register
NEW YORK — The co-founder of a Connecticut hedge fund who authorities said made his firm nearly $70 million in illegal profit through insider trading was sentenced Monday to 6 1/2 years in prison.
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[ASIC] Statement on Westpoint action
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Environmental & Energy
Airline industry leans toward global carbon offset scheme
Allison Martell and Valerie Volcovici – Reuters
MONTREAL/WASHINGTON – The global airline industry favors offsetting carbon emissions by buying carbon credits rather than participating in an industry-wide cap-and-trade system, the head of the trade association for global airlines said Monday.
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It’s not all about CO2: A plan to help reduce short-term climate pollutants
David Roberts – Grist.org
People are always lamenting the lack of small-scale, practical legislation that can address climate change without getting mired in polarized culture wars. Problem is, when legislators introduce bills like that, they’re often completely ignored. It’s the sexy, controversial stuff that gets attention.
jlne.ws/18GC2yc
EEX Transparency Platform to be Expanded with Power Market Data from Switzerland – swisselectric becomes New Partner
jlne.ws/15ISSOh
Asia-Pacific
Nomura Achieves Goal of Record 90 Trillion Yen in Retail Assets
Bloomberg
Nomura Holdings Inc. increased retail client assets to a record 90.3 trillion yen in April, achieving a goal of Chief Executive Officer Koji Nagai two years ahead of schedule, thanks to Japan ’s stock rally.
jlne.ws/15ISQWB
TSE : Release of ” Report by the Study Group on the Listed Infrastructure Market – Toward Establishing the Listed Infrastructure Market in Japan -”
jlne.ws/15ISSOj
smartTrade Technologies Provides Koscom With Smart Order Routing And Aggregation Capability For Emerging ATS Systems In Korea
jlne.ws/15ISQWG
Thai Bourse Market Report For April 2013
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Speech By Song Liping, President & CEO Of Shenzhen Stock Exchange At The Brokerage Innovation Conference 2013
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Frontier Markets
Current Account: A Misused Compass Points Awry
MoneyBeat – WSJ
In just two weeks, the English city of Manchester has witnessed the departures of two of its most famous representatives. The one the world knows about is Sir Alex Ferguson, who announced his retirement last week after 26 years in charge of Manchester United.
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Malawi Stock Exchange Weekly Trading Report -10th May, 2013
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