Date: Jun 20, 2013
June 20, 2013: Nasdaq seeks tech head to build USD1bn business; ATS Brasil seeks to open exchange to compete against Bovespa; Moscow Exchange to Launch Stock Futures for German Blue Chips
Nasdaq is on the prowl for a new chief for its technology division. In Brazil, ATS Brasil files for approval to start up a new exchange next year. Moscow Exchange plans to offer futures contracts from Deutsche Boerse beginning in September.
The Pinnacle of Nervousness
The most nervous man in the world was spotted last night at the CME’s Pinnacle Awards for top performing CTAs. Previously known as The Most Interesting Man in the World, CQG’s Pat Kenny seemed somewhat nervous about living up to his reputation as “The Most Interesting Man in the World” after I wrote an article about him and called him such. Pat is scheduled to guest edit this newsletter the week after next. I told him to be himself and have fun with it, which comes naturally to him.
Next week, Jim Kharouf and I will be in London and Londoner David Setters will be the guest editor. Pat Kenny will be the guest editor the following week while I am away at Boy Scout summer camp. Both of them will do just fine, but they do have big shoes to fill.
CME Group’s Pinnacle Awards: …and the winner is…
Last night, the CME hosted its second annual Pinnacle Awards event, recognizing the top CTAs of 2012 and for the five year period ending last year. All the winners are posted on the JLN blog at jlne.ws/10AbNs8. Also congratulations to Keith Campbell, of Campbell & Co. for the Pinnacle Achievement Award. Well deserved.
ABN Amro broker to pay $1m to settle customer account shortfalls
Gregory Meyer in New York and Philip Stafford in London – FT.com
A broker owned by ABN Amro has agreed to pay $1m to settle charges over customer account shortfalls worth tens of millions of dollars, as part of a regulatory crackdown on the futures industry following scandals at MF Global and Peregrine Financial Group
***** ABN AMRO has hired the accounting firm Grant Thornton to come in and audit their business practices.
The CFTC OIG Semi Annual Report
The CFTC’s Office of Inspector General had some of the following observations.
The CFTC’s Kansas City office has at least 30 empty workstations. The less than a year old offices reflect expectations of staffing increases, but some of that may be unnecessary as the KCBOT building will be sold and the open outcry markets moved to Chicago.
The OIG noted that the CFTC has no office west of Kansas City, MO. They also suggested revisiting re-opening a West Coast office.
FIA Volume Report: Global Futures And Options Volume Rose 0.5% In The First Quarter
The number of futures and options traded on exchanges around the globe reached 5.41 billion during the first quarter of 2013, up 0.5% from 5.39 billion during the first quarter of 2012. Futures-only volume rose 21.2% during the quarter to 3.06 billion from 2.53 billion contracts, but that was almost completely offset by a 17.9% decrease in options volume to 2.35 billion from 2.86 billion contracts.
***** One step forward.
Futurisation dooms energy swap execution facilities
The US Dodd-Frank Act envisioned a new type of trading venue for over-the-counter derivatives, known as swap execution facilities (Sefs). But in the energy markets, at least, it appears Sefs are dead and traditional futures exchanges have emerged triumphant.
***** Doom is a very strong word. And it ain’t over. The fat regulator has yet to sing.
Firm58 Offers New Market Surveillance Solution for Broker Dealers
Firm58 is launching its new compliance & surveillance solution for broker dealers in response to heightened scrutiny of trading activity and evolving requirements for broker dealer trade supervision. The new solution will assist brokerages with adhering to the regulatory bodies’ broadening definitions of suspicious behavior, by detecting the accountable party and corresponding trades.
***DA: The “failure to supervise” rule makes a broker-dealer guilty until proven innocent.
NYSE Euronext’s “The Big Stage” Provides Unique Insights Into Capital Markets Community
Going public on the New York Stock Exchange (NYSE) is a significant benchmark for any business. While it’s the culmination of many successes, an IPO is followed by even more growth stories and achievements. To showcase the great moments, individuals and activities behind the most fascinating companies in business, the NYSE today unveiled a new multichannel marketing initiative: The Big Stage.
***** Everything is BIG in NYC!
FINRA reviewing brokerages’ use of social media
Reuters via Yahoo! News
Wall Street’s Financial Industry Regulatory Authority is looking at how brokerage firms supervise their use of communication outlets such as Facebook, Twitter and LinkedIn, the industry-funded regulator said. FINRA, which conducts periodic “sweeps,” or targeted checks on Wall Street brokerages, sent out letters to firms earlier this month requesting information about their use and monitoring of social media communications for the companies and individual employees.
***** Oh stop. Really. #OMG
White-Collar Sentences Get a Fresh Look
JOHN R. EMSHWILLER – WSJ.com
A hearing scheduled for Friday in a Houston federal court on whether to substantially reduce former Enron Corp. Chief Executive Jeffrey Skilling’s 24-year prison sentence comes at a time of growing debate about the rules for punishing white-collar criminals.
***** Growing debate among white collar criminals?
European hedge funds struggle to break into U.S. market
Reuters via Yahoo! Finance
European and Asian hedge fund firms are finding the potentially lucrative U.S. market impossible to ignore, but as tough as ever to negotiate. Delegates at the annual GAIM conference in Monaco this week talked about the difficulties, particularly for small funds, in attracting new money to an industry once at the top of investors’ wish lists.
***** Don’t worry, it will only get harder with the new regulations.
Finance people are from Mars, and economics people are from Venus
Neil Irwin – Washington Post
Well that was something. On a day when there is already a strange hothouse atmosphere around the Federal Reserve’s policy statement and chairman Ben Bernanke’s afternoon news conference, there was a long, often tense exchange on CNBC between Rick Santelli, the network’s sometimes-bombastic correspondent (recall that it was one of his rants that launched the tea party movement), and Jon Hilsenrath, chief economic correspondent at The Wall Street Journal.
***** Rick Santelli is not “sometimes bombastic,” he is a full-time bombastic.
AP News: Minn. mother, son accused of stealing gopher feet
A Minnesota mother and her 18-year-old son are accused of stealing nearly $5,000 in frozen gopher feet and selling them for a bounty.
***** If we had gopher feet futures, we would not have this sort of OTC market problem.
Fluffy cows: Old beauty practice gains attention
Grooming cows so they look like unusually large poodles is a well-known beautification practice in the show cattle industry. But although it may be decades old, it’s just now getting attention on the Internet.
***** I thought the Cow Afro was a little much.
Jeremie Bacon on Taking the Reins at ORC Americas and Modular Technology
After a decade of running his own technology firm, Jeremie Bacon decided it was time for a new challenge. In May, he took the reins as president of Orc Americas, the Chicago-based subsidiary of Orc Group. Bacon sat down with JLN editor-in-chief Jim Kharouf to talk about why decided to leave the firm he co-founded, Backstop Solutions, a software-as-a-service company in the alternative investment space.
MarketsWiki Recent Updates
Companies, Organizations and Groups
G.H. Financials Group; Shenzhen Carbon Exchange; Commodity Futures Trading Commission; Orc Group; Eurex; Hong Kong Exchanges and Clearing Ltd; Thailand Futures Exchange; Rosario Futures Exchange; ADM Investor Services, Inc.
40,851,412 pages viewed, 7,532 articles, 160,912 edits
Nasdaq seeks tech head to build $1bn business
Tim Cave – Financial News
Nasdaq OMX has launched a global search for a new manager of its technology division, who will have a remit to grow the exchange group’s revenues from technology sales to over $1bn, Financial News has learnt. The New York-based operator is seeking a “general manager” for its global technology solutions unit via executive search firm Heidrick & Struggles, according to a job specification seen by Financial News.
ATS Brasil seeks to open exchange to compete against Bovespa
Guillermo Parra-Bernal and Natalia Gómez | Reuters
American Trading Systems Brasil has requested permission to open a financial exchange in Brazil that would compete against the Bovespa stock market, and is in advanced talks with potential partners to help fund the new enterprise.
Moscow Exchange to Launch Stock Futures for German Blue Chips
Andrey Ostroukh – WSJ.com
MOSCOW–The Moscow Exchange said Wednesday it will start trading stock futures contracts for German companies listed on Deutsche Boerse AG in September, extending its global reach as part of an ambitious plan to make Moscow an international financial center by 2020.
Hong Kong Scans ‘Millions of Messages’ in Rate Probe
Fion Li & Simon Lee – Bloomberg
Hong Kong’s central bank extended its investigation of possible misconduct in setting the city’s benchmark interest rates to HSBC Holdings Plc and other lenders after crackdowns by the U.S., U.K., Japan and Singapore.
Fed Roils World Markets
KATIE MARTIN – WSJ.com
Fresh signs that the U.S. Federal Reserve is considering pulling back on efforts to support the U.S. economy rattled global markets Thursday. Speaking on Wednesday, Fed Chairman Ben Bernanke stressed that the Fed isn’t poised to raise interest rates any time soon. But assuming economic data keep improving in the world’s biggest economy, it will look to trim its monthly bond purchases from the current level of $85 billion a month by the end of this year.
Why should there be more women on the trading floor?
Michelle Price – Financial News
Within today’s Parliamentary Commission on Banking Standards report, the government observes that the culture of the UK financial services industry is in dire need of reform and suggests, among a number of measures, one eye-catching remedy: getting more women onto the testosterone-soaked trading floor.
News from Turkey
Lira Plunges to All-Time Low as Fed Compounds Turkish Protests
Selcuk Gokoluk & Taylan Bilgic – Bloomberg
Turkey’s lira tumbled to an all-time low against the dollar and the country’s bonds and shares slumped the most among emerging markets as the U.S. Federal Reserve signaled it may scale back monetary stimulus this year.
***** You can bully the people, but when you cross the line the market will punish you.
Turkey’s ‘Standing Man’ Launches New Protest Wave
After weeks of sometimes violent confrontation with police, protesters in Turkey have found what could be a more potent form of resistance: standing still.
Bernanke: SEC ‘Moving in Right Direction’ On Money Funds
Wall Street Journal Blogs
Fed Chairman Bernanke has made no secret of his desire to reduce risks in the $2.6 trillion money-market mutual fund industry. On Wednesday, he said he’s “very glad” securities regulators have finally made progress addressing those risks but stopped short of endorsing a recent proposal by the SEC.
The Regulator Who’s Not Afraid of Wall Street
New York Magazine
Two years ago, the New York State Department of Financial Services didn’t exist. Today, it’s becoming Wall Street’s most feared enemy. The tiny, state-run agency, which was created in late 2011, isn’t supposed to be any more powerful than any other Wall Street regulator.
European regulators seek to ‘future-proof’ ETF products
Suzi Ring – Financial News
The European exchange-traded fund market has faced an onslaught of regulatory guidelines and consultations over the past two years. The European Commission is now looking to create regulation that can keep pace with the future innovation of the market.
ESMA’s Chairman Steven Maijoor Delivers Keynote Speech At ISLA’s 22nd Annual Conference
Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA), delivered the keynote address at ISLA’s 22nd Annual International Securities Lending Conference in Prague
Transformational Technologies, Market Structure, And The SEC By Gregg E. Berman, Associate Director, Office Of Analytics And Research, Division Of Trading And Markets, U.S. Securities And Exchange Commission – SIFMA TECH Conference, New York
ESMA Publishes Compliance Table For Guidelines On Market Making
Exchanges & Trading Facilities
HKEx says ‘cash only’ for new products
South China Morning Post
The high rent in Hong Kong is not only hurting retailers, but also affecting product launches by Hong Kong Exchanges and Clearing. The bourse’s chief executive, Charles Li Xiaojia, said yesterday that when the exchange introduced commodities products for trading in the city, it would prefer cash settlement over physical delivery.
CME Group Media Room
National 4-H Council and CME Group have launched a new partnership that will connect the important work of the world’s leading futures exchange company to the 4-H mission at the local level.
Moscow Exchange to Introduce Five German Single Stock Futures as Part of Deutsche Börse Partnership
Moscow Exchange and Eurex Exchange, the derivatives arm of Deutsche Börse, announced today that single stock futures of some well-known German underlyings will be made available for trading on the derivatives market of Moscow Exchange as of September 2013.
NYSE Veteran Associate Program Provides U.S. Military Veterans With Business Experience, Professional Skill Development And Job Opportunities – 2nd Annual Summer Program Expands With 28 Veteran Participants For 10-Week Session
KCBT.com will no longer be available after June 28, 2013
TSX Markets: Top 20 Largest Consolidated Short Position Report – June 15, 2013
Hedge Funds & Managed Futures
In Wake of Pay-to-Play Scandal, Riverstone Raises Its Largest Fund
PETER LATTMAN – NYTimes.com
Four years ago this month, the private equity firm Riverstone Holdings agreed to pay $30 million to resolve its role in a “pay-to-play” pension fund investigation by Andrew M. Cuomo, the New York attorney general at the time. Several months later, Riverstone’s founder, David M. Leuschen, paid an additional $20 million to settle his role in the case.
Moore to Tudor Said to Stick With Japan After Correction
Louis Bacon, Michael Novogratz and other multibillion-dollar hedge-fund managers expect to make more money this year from rising Japanese stocks and a falling yen even after being forced to scale back their bets as markets changed direction, according to clients.
Smaller funds of hedge funds grow faster
Harriet Agnew – Financial News
Smaller fund of hedge fund firms have grown faster than their larger counterparts over the last three years, as larger firms were hit by changing investor needs.
Hedge Funds Using ETFs for Trades
ETF Trends via Yahoo! Finance
Exchange traded funds have found their way into self-directed brokerage accounts of the average retail investor, financial advisor investment strategies, and even the world’s largest hedge fund.
BNY Mellon Retains Top Spot as Biggest Fund of Hedge Funds Administrator
BNY Mellon, the global leader in investment management and investment services, has again been recognized as the world’s largest fund of hedge funds (FoHF) administrator in HFMWeek’s bi-annual assets under administration survey.
FORGET JACK BOGLE: AllianceBernstein Makes The Case For Active Portfolio Management
Business Insider via Yahoo! Finance
After the financial crash there has been a loss of confidence in active management as passive investing strategies have outperformed. Vanguard’s Jack Bogle has built his entire reputation on passive investing, or investing in stock market indices.
Gold tumbles through $1,300 on Fed move
Emiko Terazono in London – FT.com
Gold has tumbled more than 4 per cent to a two-and-a-half-year low below $1,300 an ounce after the US Federal Reserve signalled a scaling back of its monetary stimulus programme. The change of course for the Fed prompted heavy selling, and the yellow metal on Thursday fell as low as $1,287.60 a troy ounce, its weakest since September 2010.
Banks & Brokers
ICAP invests in Enso Financial Management LLP
ICAP plc, a leading markets operator and provider of post trade risk mitigation and information services, today announces it has made a strategic investment in Enso Financial Management LLP an early-stage firm providing hedge funds and asset managers with innovative portfolio reporting and data analytics services.
Traiana to expand direct connectivity for foreign exchange NDF clearing
Traiana, the leading provider of post-trade solutions, announces it is to launch direct connectivity between Traiana’s Harmony CCP Connect and LCH.Clearnet Ltd’s (LCH.Clearnet) foreign exchange clearing service, ForexClear, for non deliverable forwards (NDFs) clearing.
Ten double standards from the Banking Commission?
William Wright – Financial News
A 571-page report produced in less than a year by a commission of 10 individuals of widely diverging political views and motivations was always going to throw up a few anomalies and inconsistencies.
Russia’s BCS wins UK regulatory approval
Philip Stafford – FT.com
BCS Financial Group is preparing to transfer its operations for trading emerging markets stocks from Cyprus to its London operations after the Russian broker received authorisation from UK regulators on Wednesday.
Wall Street Trading Desks Defying Second-Quarter Curse
Michael J. Moore – Bloomberg
Wall Street banks, buoyed by record stock-market prices and high-yield bond issuance, probably will report a jump in second-quarter trading and investment-banking revenue from the same period a year ago.
Commerzbank to cut around 5,200 jobs
Reuters via Yahoo! News
FRANKFURT – Germany’s second-largest lender Commerzbank said on Wednesday it will cut 5,200 jobs, about 12 percent of its 45,000 full-time staff, adding to job-shedding by banks across Europe.
Five Banks Must Raise $21.2 Billion in Fresh Capital, BOE Says
Five U.K. banks must submit plans to raise another 13.7 billion pounds of additional capital by the end of 2013 to withstand possible losses on loans, fines and risk models, the Bank of England said.
ABN Amro chief says Dutch bank ready to privatize
The chief executive of ABN Amro says the Dutch bank is ready to be privatized. Gerrit Zalm said on a late-night television talk show Wednesday that the bank is sufficiently capitalized and had remained profitable despite a recession in the Netherlands.
UK watchdog says Lloyds must raise 8.6 billion pounds capital
Reuters via Yahoo! News
By Huw Jones and Matt Scuffham LONDON – Lloyds Banking Group must plug a capital shortfall of 8.6 billion pounds, Britain’s banking regulator said on Thursday, a day after the government signalled plans to return the part-state owned lender to the private sector.
Goldman Terminates Ebix Deal After U.S. Prosecutors Open Probe
Goldman Sachs Group Inc. terminated an agreement to acquire Ebix Inc. after the insurance software maker was informed that federal prosecutors had opened an investigation.
AIG Target Raised at Deutsche Bank After Hancock Meeting
American International Group Inc. had its price target raised by Deutsche Bank AG after the bank’s equity analysts met with Peter Hancock, the chief executive officer of AIG’s property-casualty unit.
Britain to start sale of Lloyds soon, review RBS split
Reuters via Yahoo! News
By Matt Scuffham and David Milliken LONDON – Britain is ready to start selling its shares in Lloyds Banking Group and will examine whether to break up Royal Bank of Scotland , Finance Minister George Osborne said, admitting the re-privatization of RBS remains a long way off.
Bank Of England: A Governor Looks Back – And Forward – Speech By Mervyn King
E*TRADE Financial Corporation Reports Monthly Activity for May 2013; Provides Updates to Its Loan Delinquencies
Clearing & Settlement
ABN AMRO Clearing Chicago fined $1 million
The top U.S. derivatives regulator fined ABN AMRO Clearing Chicago LLC $1 million for a raft of breaches in the handling of customer accounts over a period of three years.
Indexes & Products
New copper ETC from db ETC Index plc launched on Xetra
NYSE Euronext Launches CAC 40 Ext Index
NYSE Euronext is extending its range of stockmarket indices with the addition of the CAC 40 Ext, which tracks the market’s benchmark CAC 40, but with extended calculation and distribution hours – from 8.00 am to 6.30 pm CET compared with 9.00 am to 5.30 pm CET for the CAC 40. The CAC 40 Ext index is calculated on the basis of CAC 40 index future traded on the NYSE Liffe exchange, adjusted for dividends and interest payments.
Equiniti to launch platform pooling back office functions
Vanessa Kortekaas – FT.com
Equiniti, the share registrar and outsource provider, is set to launch a platform that will pool several wealth managers’ back office functions, in response to increasing regulatory and operating costs in the industry.
Dion Appoints Achim Kleber To Its European Sales Team
Dion Global Solutions, technology partner to the financial services industry, has appointed Achim Kleber to its European Sales Team. As Business Development Manager, Achim will help drive Dion’s growth in the European market across the DACH region.
CameronTec’s Catalys Muscles In On Central And Eastern Europe – CameronTec Providing CEE Stock Exchange Group With Connectivity Technology And Trading Infrastructure To Manage And Support The Entire Trading Lifecycle
Derivitec Introduces Hedge Fund Risk Management Tool
SAN MATEO, Calif.—-Derivitec’s Trade Blotter, powered by Xignite financial data APIs, provides small- to mid-tier hedge fund managers analytics and tools to easily build models for risk analysis.
CFTC Orders ABN AMRO Clearing Chicago LLC to Pay $1 Million to Settle Charges of Segregated and Secured Fund Deficiencies, a Minimum Net Capital Violation, Books and Records Violation, and Supervision Failures
The U.S. Commodity Futures Trading Commission (CFTC) issued an Order on June 18, 2013, filing and settling charges against ABN AMRO Clearing Chicago LLC (ABN AMRO) of Chicago, Illinois, for failing to segregate or secure sufficient customer funds; failing to meet the minimum net capital requirements, failure to maintain accurate books and records, and failure to supervise its employees.
Ex-Goldman Trader Barred From Presenting Lawyers’ Advice
Ex-Goldman Sachs Group Inc. trader Fabrice Tourre lost a bid to present evidence that he “reasonably relied’ on the advice of lawyers when working on a transaction at the center of a fraud lawsuit filed by the U.S. Securities and Exchange Commission.
Life Partners Holdings, Inc. CEO Files Whistleblower Complaint for Naked Short Selling and Market Manipulation
Business Wire via Yahoo! Finance
Brian Pardo, CEO of Life Partners Holdings, Inc. , parent company of Life Partners, Inc., announced today that an independent investigation has uncovered substantial evidence of coordinated market manipulation and naked short selling of Life Partners’s stock in and around September 26, 2012.
AMF identifies Desjardins Group as a systemically important financial institution for Québec
Former Melbourne company director arrested and charged
Environmental & Energy
Carbon Rescue Plan Wins Support of EU Parliamentary Panel
A panel of European Union lawmakers approved a watered-down rescue plan for the world’s biggest carbon market, after a record surplus of emission permits pushed prices to an all-time low.
Top White House climate adviser vows Obama will act soon
The Hill’s E2 Wire
President Obama’s top climate adviser on Wednesday vowed that “meaningful” action on global warming was coming soon. Heather Zichal, the deputy assistant to the president on energy and climate change, said she didn’t want to get “in front of the big man” and unveil specific plans during an event in Washington, D.C., hosted by The New Republic.
Obama calls climate change the ‘global threat of our time’ in Berlin address
The Hill’s E2 Wire
President Obama on Wednesday called climate change the “global threat of our time” in a speech in Berlin.
Thai Alternative Bourse Enters 15th Year With Record High Market Cap
The Stock Exchange of Thailand’s Market for Alternative Investment (mai) enters its 15th year with a record market capitalization of THB 200 billion (approx. USD 6.67 billion) and an average daily trading value of THB 3 billion (approx. USD 100 million) per day, while market liquidity continues to increase.
Singapore Exchange Regulatory Announcement: Statement On Special Audit Report On China Sky
Shanghai Stock Exchange, China Securities Index Co. Update Industry Classification Of Listed Companies
Dalian Commodity Exchange: Forum Held For Jiangsu Futures Companies
HKEx And Hunan Financial Affairs Office Sign MOU
A word of caution on Qatar and UAE status upgrade
Mirza Beg and Michael Bevan – FT.com
Last week’s upgrade of the Qatari and UAE stock markets to emerging market status by MSCI, the index provider, was a long time coming but is highly welcome nonetheless.
Sallie Krawcheck Appoints Allyson McDonald As President of Global Women’s Network, 85 Broads
Business Wire via Yahoo! Finance
Sallie Krawcheck has appointed seasoned financial services and non-profit executive Allyson McDonald as president of 85 Broads. Krawcheck recently acquired the global women’s network from founder, entrepreneur and former Goldman Sachs executive Janet Hanson.