Industry news
Date: May 31, 2013
May 31, 2013: CME reports record single-day volume; Korea to Launch Third Stock Exchange; Japan Exchange to Top Profit Forecast on Volume
Exchange operator CME Group posts an overall daily record volume this week. Korea plans to launch the country’s third stock exchange; this one will focus on smaller businesses. The head of Japan Exchange Group says that the company is on track for record profits.
First Read
CME reports record single-day volume
Neil Munshi in Chicago – FT.com
CME Group registered its most active day on record this week in a sign that markets are rebounding from the lower trading activity that plagued the securities industry in recent years.
jlne.ws/17DkrsL
***** Volume up = Spirits rising.
***** Past performance IS indicative of future results: I predict that traffic to MarketsWiki will hit 40 million page views today.
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International Securities Exchange Trades 15 Millionth Contract Through Implied Order
The International Securities Exchange (ISE) today announced that trading of multi-legged strategy orders through its Implied Order* functionality has exceeded 15 million contracts.
jlne.ws/17DkrsP
***** Complexity made simple = Spirits rising
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Gensler’s Personal E-Mail Use at CFTC Faces Republican Scrutiny
Silla Brush – Bloomberg
U.S. Commodity Futures Trading Commission Chairman Gary Gensler is drawing congressional scrutiny over his use of personal e-mail for work including communication during the collapse of MF Global Holdings Ltd.
jlne.ws/17DkpRK
***** I have never had Chairman Gensler’s email address, either personal or business. I had doubts he used email, perhaps being one of those executives who was relied on an assistant to do that for him. I was wrong. But he is still rather stingy with his email address. I can’t really criticise the chairman for using his personal email. My email address is both business and as personal as you can get.
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OTC earthquake shaking up futures clearing
Tom Osborn – Risk.net
Like any earthquake, the advent of mandatory clearing in over-the-counter derivatives markets is shaking a lot of other things up as well, including the futures clearing landscape. As clients go looking for a firm to handle their OTC business, many are also reviewing their choice of listed derivatives clearers – a rare event for relationships that can date back a decade or more – because of cost, operating and margin efficiencies that may be attainable when clearing both types of business with a single firm.
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***** Not all future clearers will clear OTC derivatives. Thus, it is an earthquake with partial impact.
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Buy-side in limbo on cross-border reforms
Dan Barnes – FOW
Without well-defined cross-border derivatives trading rules, buy-side firms are struggling to identify viable counterparties for clearing, potentially increasing their costs further. At a Futures and Options Association briefing with UK regulators and the SEC held on 15 May 2013, Anthony Belchambers, chief executive of the FOA summed up the concerns of the buy-side.
jlne.ws/17DkrsX
***** I could tell you too, but I don’t use that kind of language.
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The European FTT Is Finished
Rebecca Healey – TabbFORUM
In a supposed victory for banks and trading organizations, the European Commission apparently will scale back the financial transaction tax significantly. But here are 5 reasons why the anti-FTT lobby should not relax just yet.
jlne.ws/1aHNBDu
***** If there was a tax on stupidity, there would be a high velocity here.
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Wall Street Turns to ‘Boot Camps’ to Bring New Workers Up to Speed
New York Times
For fees that can exceed $1,000 a day per student, Training the Street, Wall Street Prep and other companies teach basic skills like spreadsheet building and database extraction.
jlne.ws/17Dkrt1
***** It is the boot camp haircuts that have them really confused.
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Peregrine Headquarters Sold at Deep Discount
JACOB BUNGE – WSJ.com
The splashy office building once occupied by Peregrine Financial Group Inc. is slated to be sold to an Iowa-based realty company for $3.3 million, according to the manager of the sale.
jlne.ws/16vuAYk
***** Yet, but they will still have to spend millions on getting the bad karma out.
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Chicago Sun-Times lays off all photographers
Robert Channick, Chicago Tribune
The Chicago Sun-Times laid off its entire staff of photographers Thursday and plans to use freelance photographers and reporters to shoot photos and video, the newspaper said. A total of 28 full-time staffers received the news at a morning meeting, according to sources familiar with the situation.
jlne.ws/17Dkq88
***** In a flash, they were all gone.
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In Lithuania, the Tax Man Cometh Right After the Google Car Passeth
MARCIN SOBCZYK – WSJ.com
VILNIUS, Lithuania—One day last summer, a woman was about to climb into a hammock in the front yard of a suburban house here when a photographer for the Google Inc. Street View service snapped her picture. The apparently innocuous photograph is now being used as evidence in a tax-evasion case brought by Lithuanian authorities against the undisclosed owners of the home.
jlne.ws/17DkrJk
***** Talk about being Googled.
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MarketsWiki.tv
Stephanie Hammer Speaks About the New Mindset for Financial Technology
MarketsWiki.tv
Stephanie Hammer talks about some of the key themes and takeaways in putting together her new book, “Architects of Electronic Trading: Technology Leaders Who Are Shaping Today’s Financial Markets.” In it, Hammer interviews 15 financial industry professionals across the spectrum of the trading space in a Q&A format, exploring topics such as transformational technology, affordable desktop supercomputing, cloud computing and microwave data technology. She also discusses how technology is being implemented at top trading firms today, along with how technologists are being integrated into the trading and business decisions made at trading firms today.
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Lead Stories
Korea to Launch Third Stock Exchange
Kwanwoo Jun – WSJ
The Korea Exchange, operator of the country’s benchmark Kospi and the tech-heavy Kosdaq markets, said Friday it will launch a new third bourse for small firms and startups on July 1.
jlne.ws/17DkrJp
Japan Exchange to Top Profit Forecast on Volume, CEO Says
Toshiro Hasegawa – Bloomberg
Japan Exchange Group Inc., operator of the biggest bourse outside the U.S., is on track to beat a profit forecast released last month as trading surges to a record, Chief Executive Officer Atsushi Saito said.
jlne.ws/11bNrj7
London Stock Exchange cuts fees for ETF market makers
Madison Marriage – FT.com
The London Stock Exchange has cut fees in half for exchange traded fund market makers as it continues its quest to grow market share.
jlne.ws/18DC210
Probe of HKMEx Brings Furor in Hong Kong
TE-PING CHEN – WSJ.com
The political scandal and criminal investigation that has accompanied the shutdown of the Hong Kong Mercantile Exchange has created more drama, including a sixth arrest on Thursday, than the small, struggling exchange ever did trading gold and silver futures.
jlne.ws/17auWTB
EU Urges U.S. Swaps-Rule Delay to Give Banks Breathing Space
Bloomberg
The European Union is urging the U.S. to allow time for international talks before it imposes swaps rules on EU lenders, saying that the current timetable would lead to the banks facing extra costs.
jlne.ws/17Dkq8m
EU Likely to Weaken Proposed Transaction Tax
TOM FAIRLESS – WSJ.com
Deep disagreements among 11 European Union states that have pledged to introduce a tax on financial transactions mean the proposal faces delays and could be significantly scaled back, EU diplomats involved in the discussions said on Thursday.
jlne.ws/17DkrJu
Private Wealth Rebounds as Managers Face Higher Costs
DAISY MAXEY – WSJ.com
NEW YORK–Global private wealth grew more strongly in 2012 than in the two prior years, driven by net new assets and exceptionally strong stock-market performance. But that growth isn’t translating into a proportional growth in revenue for wealth managers.
jlne.ws/17DkqoE
Number of problem banks isn’t shrinking fast enough
CNN Money
The regulations meant to strengthen our big banks may be leaving the U.S. with more troubled small banks.
jlne.ws/17DkrZN
The huge misconception at the heart of “too big to fail”
Quartz via Yahoo! Finance
As banks continue to swell in size, the public might conclude that legislators have gone back on their promise to never again let a bank grow “too big to fail.” But making banks smaller was never what legislators—most of them, anyway—had in mind.
jlne.ws/17DkqoH
Prolexic Stops Largest Ever DNS Reflection DDoS Attack – 167 Gbps Attack Targets Real-Time Financial Exchange Platform
Prolexic, the global leader in Distributed Denial of Service (DDoS) protection services, announced today that it has successfully mitigated the largest DNS reflection attack ever recorded, which peaked at 167 Gigabits per second (Gbps). The attack, the largest single DDoS attack Prolexic has mitigated in its 10-year history, was directed against a real-time financial exchange platform on May 27, 2013.
jlne.ws/17DkqoJ
Regulatory
ASIC releases updated guidance for auditors reporting of contraventions
jlne.ws/17DkqoM
Canadian Securities Regulators adopt “Pre-Marketing” and “Marketing” amendments to prospectus rules [CSA]
jlne.ws/17DkqoN
Exchanges & Trading Facilities
TMX Group Appoints Deana Djurdjevic To Lead Equity Trading
TMX Group today announced that Deana Djurdjevic has been appointed Senior Vice President, Equities Trading. Ms. Djurdjevic joined TMX Group following the acquisition of Alpha, where she served most recently as Chief Trading and Data Officer.
jlne.ws/17DkrZU
Oslo Børs: Schedule For The Burgundy Go-Live Weekend
Information on the schedule and planned activities for the Burgundy go-live weekend is found on this page: Schedule – Burgundy Go-live Weekend. We encourage all clients to check this page regularly during the go-live weekend as status updates, relevant information and important messages will be posted here.
jlne.ws/17DkqoT
ASX acquires d-cpyhaTrade Limited
ASX has today entered into an agreement to acquire d-cyphaTrade Limited from Transpower New Zealand Limited. Under the agreement, ASX will acquire 100% of the shares in d-cypha for an acquisition price of A$55 million.
jlne.ws/17DkqoW
NASDAQ OMX NLX Secures Support of Founding Participants Ahead of Launch
NASDAQ OMX NLX, the new London market offering a range of both short-term interest rate and long-term interest rate euro- and sterling-denominated listed derivative products, has secured the support of a wide range of founding participants including banks, clearing, brokerage and trading firms who will contribute to the provision of liquidity and open interest at NLX.
jlne.ws/17DkqFe
CME Group Volume Reaches All-Time High on May 29
CME Group, the world’s leading and most diverse derivatives marketplace, reached a record high in single-day volume with 26,947,300 contracts traded across all asset classes on May 29, 2013, surpassing the previous record of 25,734,651 contracts on August 9, 2011.
jlne.ws/17DkrZY
NEXPONOR to be the largest listing on NYSE Alternext in 2013
jlne.ws/17DkqFi
Moscow Exchange Announces Results For First Quarter Of 2013
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Athens Exchange: Continuation Of Suspension Of Trading Of The Shares Of The Companies BANK OF CYPRUS PUBLIC COMPANY LTD And CYPRUS POPULAR BANK PUBLIC CO LTD
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Hedge Funds & Managed Futures
Third Point marketer Marc Zwebner joins York
Harriet Agnew – Financial News
A New York-based managing director in marketing at Dan Loeb’s hedge fund manager Third Point is leaving to lead the marketing efforts of a rival event-driven manager, Financial News has learnt.
jlne.ws/17Dksgl
Ex-SAC Hong Kong trader readies hedge fund to bet on price swings
Reuters via Yahoo! Finance
Miaodan Wu, a former portfolio manager at billionaire Steven A. Cohen’s hedge fund SAC Capital Advisors, is preparing to launch his own hedge fund in Hong Kong to bet on price swings in financial securities, people familiar with the matter told Reuters.
jlne.ws/17DkqFm
Credit crunch casualty Eckert plots hedge fund reincarnation
Reuters via Yahoo! News
By Laurence Fletcher LONDON – As comebacks go, it’s one of the more ambitious. Fred Eckert – the hedge fund manager who lost $250 million of his own money, saw his firm go bankrupt in the credit crisis, went through a divorce and spent two months in a coma – is back with the launch of his new firm.
jlne.ws/17DkqFp
Boston-Power founder Christina Lampe-Onnerud joins hedge fund firm Bridgewater Associates
Boston Globe
One of Boston’s highest-profile energy entrepreneurs, Christina Lampe-Onnerud, is moving to Connecticut to join one of the world’s biggest hedge fund managers, Bridgewater Associates.
jlne.ws/17Dksgr
Risk-parity funds, the next ‘better mousetrap’?
Associated Press via Yahoo! News
The mutual fund industry is forever trying to build a better mousetrap_with mixed results. The latest contender to be a better mousetrap is known as the risk-parity fund. Just four years after their debut, the new breed of funds has already attracted nearly $30 billion in assets_$16 billion of that in the past year alone, according to Lipper.
jlne.ws/17Dksgx
Nanette Abuhoff Jacobson Named Global Investment Strategist For Hartford Funds
Business Wire via Yahoo! Finance
Hartford Funds has named Wellington Management Company, LLP’s Nanette Abuhoff Jacobson as global investment strategist.
jlne.ws/17DktAR
Top Finnish Fund Deserts Thailand for Vietnam Seeking Growth
Bloomberg
PYN Elite , Finland ’s best-performing fund, is helping to drive a stock rally in Vietnam as it abandons Thailand, where the portfolio has reached annual returns of almost 25 percent for the past 14 years.
jlne.ws/17DktAV
News Corp. Delists From London Bourse Citing Low Trading Volume
Bloomberg
Rupert Murdoch ’s News Corp. is canceling its listing on the London Stock Exchange, citing the low trading volume for its shares. The delisting precedes the New York-based company’s split into two separate businesses at the end of next month, News Corp. said in a statement today.
jlne.ws/17DktAX
Och-Ziff Capital Management Group LLC to Present at the Keefe, Bruyette & Woods 2013 Asset Management Conference
jlne.ws/17DktAY
Banks & Brokers
Citi overhauls electronic trading in the US
Anish Puaar
Citigroup has completed an overhaul of its US electronic trading platform for equities, which has resulted in closer links between its electronic and sales trading desks that have historically been kept separate, the bank has said.
jlne.ws/17DktB0
God’s new banker brings Teutonic thoroughness to Vatican
Guy Dinmore and Rachel Sanderson in Vatican City – FT.com
On his last full day of a troubled papacy, Benedict XVI bade farewell to his household staff lining up in the Vatican, greeting cleaners, drivers and gardeners, before stopping to exchange just a few words with a newly arrived fellow German.
jlne.ws/17DktB1
Australia Banks on Track for Biggest Monthly Fall in Three Years
Bloomberg
Australian bank stocks are on course for their worst monthly performance in three years as investors cash out of a rally that drove financial shares to a record high in April.
jlne.ws/17DktB6
Morgan Stanley Cutting Correlation Unit Added $50 Billion
Bloomberg
Morgan Stanley was shrinking its derivatives business to cut risk under new banking rules when three deals came along that it couldn’t resist. The bank bought credit-correlation positions with a notional value of more than $50 billion over the past three years, including a portfolio sold by Credit Suisse Group AG in 2012, four people with knowledge of the transactions said.
jlne.ws/17Dksx5
BGC Partners Receives Approval to Conduct Principal Bond Trading in Korea
BGC Partners, Inc., a leading global brokerage company servicing the wholesale financial and real estate markets, today announced that its Korean entity, BGC Capital Markets and Foreign Exchange Broker (Korea) Limited, has been granted a licence by the Financial Services Commission (FSC) to offer principal bond trading to financial institutions in Korea.
jlne.ws/17DksNi
What’s Inside the Government’s Deal With Citigroup?
Bloomberg
The conservator for Fannie Mae and Freddie Mac was eager for publicity in September 2011 when it sued 17 financial institutions, accusing them of ripping off the two government-backed housing financiers. It isn’t so enthusiastic anymore.
jlne.ws/17DksNk
UBS Said to Increase Investment Bankers’ Salaries by Average 9%
Bloomberg
UBS AG , Switzerland ’s biggest bank, is boosting base salaries for investment bankers to retain key employees and help align pay with competitors, said three people with knowledge of the plan.
jlne.ws/17DktRr
James P. Gorman to Speak at the Fourth Annual Morgan Stanley U.S. Financials Conference
jlne.ws/17DktRs
Indexes & Products
State Street Rolls Out TIPS, Global Dividend ETFs
ETF Trends via Yahoo! Finance
State Street Global Advisors has launched a pair of ETFs, a fund designed to offer a potential hedge against medium-term inflation and a portfolio of global dividend stocks.
jlne.ws/17DktRx
ETFs Are Dumbing Down Active Investment Management
Business Insider
Exchange traded funds, or ETFs, have taken the investment industry by storm. It’s estimated that individuals and institutions have poured over $1.5 trillion into these derivative securities in recent years.
jlne.ws/17DktRB
Thomson Reuters Named Best Islamic Index Provider In The Asset Triple A Islamic Finance Awards 2013
jlne.ws/17Dku7S
Technology
Interbolsa at the forefront in T2S connectivity
Interbolsa, a subsidiary of NYSE Euronext and Central Securities Depository (CSD) for the Portuguese market, has chosen the global provider SWIFT to connect to Target2Securities (T2S), hence placing itself in the forefront of the European post-trading transformation.
jlne.ws/17Dku7T
nexRates enhances trading platform with high performance Excel plugin from MDX Technology
nexRates, the latest e-trading product from SoftSolutions!, today announces that it has integrated MDXT Connect, the high performance Excel plugin from MDX Technology (MDXT), a leading provider of real-time market data connectivity for traders.
jlne.ws/17Dku7V
Enforcement
Florida-Based Stock Promoter Charged with Lying to SEC Investigators
The Securities and Exchange Commission today announced that the subject of an enforcement inquiry in Florida has has been criminally charged for obstructing justice and lying to SEC investigators looking into his real estate securities offerings to investors.
jlne.ws/17Dkt3X
Federal Court in New York Imposes a $1 Million Fine and other Sanctions against Kevin Cassidy, Former CEO of Optionable Inc.
The Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court order requiring Defendant Kevin Cassidy, formerly of Bedford Hills, New York, former CEO of Optionable Inc., to pay a $1 million civil monetary penalty for violating the anti-fraud provisions of the Commodity Exchange Act (CEA) and CFTC Regulations.
jlne.ws/17Dkt41
Merrill Lynch Equities (Australia) Limited pays $120,000 infringement notice penalty
jlne.ws/17Dku7Y
[BCSC] Securities regulator alleges fraud and illegal distributions against B.C. man
jlne.ws/17Dku80
Environmental & Energy
Google Backs First Africa Renewable Power and May Invest in More
Bloomberg
Google Inc. (GOOG), which has invested more than $1 billion in renewable-energy projects, is considering spending more on clean power in Africa after announcing its first solar investment on the continent.
jlne.ws/136iboT
**RKB — Google’s African power investment history detailed. As for the future, it’s still shopping, including geothermal opportunities in East Africa.
Backloading Insufficient to Fix Carbon Market, Vattenfall Says
Bloomberg
The European Union needs a long-term solution to address a glut in its carbon trading system, and a proposed plan to temporarily reduce supply is inadequate, according to Vattenfall AB, the Nordic region’s biggest utility.
jlne.ws/16uhx9w
**RKB — “We think a price of 40 euros per ton of CO2 is needed long-term, to encourage low-carbon energy production,” says CEO Loeseth.
European Demand For Voluntary Offsets Surges 34% As Corporates Go Green
Ecosystem Marketplace
Voluntary demand for carbon offsetting grew 4% in 2012, when buyers committed more than $523 million to offset 101 million metric tonnes of greenhouse gas emissions. Private sector buyers flocked to offsets earned by planting trees, saving tropical forests, or distributing clean cookstoves in the developing world, according to this year’s State of the Voluntary Carbon Markets report
jlne.ws/15h3OPv
Asia-Pacific
Cerberus Capital Battles With Japan’s Seibu
ATSUKO FUKASE AND CYNTHIA KOONS – WSJ.com
When Seibu Railway Co. needed cash back in 2005, the problem-plagued Japanese conglomerate turned to U.S. private-equity giant Cerberus Capital Management LP. One of the deal clinchers: The Americans said they wanted to help management, not take control. Eight years later, nobody is talking about harmony anymore.
jlne.ws/17Dkt47
IMF Mission Concludes The 2013 Article IV Consultation With Japan
jlne.ws/17Dku88
Frontier Markets
The BRICS Exchanges Alliance Launches Its Own Website
On May 29, 2013 BRICS Exchanges Alliance launched its own website at BRICSMART.org. The basic concept of the new website is to create a single data portal containing information on financial products and services offered by the BRICS Exchanges — members of the alliance.
jlne.ws/17Dkuoo
Southern Africa Development Fund Mired in Debt
BARRY MEIER and RON NIXON – NYTimes.com
The initiative began two decades ago, with the best of intentions, after apartheid fell and southern Africa’s future brightened. Today that program, the Southern Africa Enterprise Development Fund, is in its death throes, apparently victimized by mismanagement, insider dealings and a lack of oversight by federal officials.
jlne.ws/17Dkuop
Malawi Stock Exchange Weekly Report – 31 May 2013
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MCX Weekly Market Report May 24, 2013 To May 30, 2013
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