Date: Jul 3, 2013
July 3, 2013: NASDAQ OMX and Borsa Istanbul Sign Strategic Partnership; Tension rises on growing shift of power to Esma; China Bond Futures Get Green Light
Nasdaq OMX and Borsa Istanbul sign a partnership. The EU wants to toughen up its financial regulator, but the UK isn’t having any. In China, the State Council approves the reintroduction of government bond futures trading.
Pat Kenny – CQG
[Without trade restrictions] the obvious and simple system of natural liberty establishes itself of its own accord. Every man…is left perfectly free to pursue his own interest in his own way…. The sovereign is completely discharged from a duty [for which] no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.
– Adam Smith
The Wealth Of Nations, Book IV, Chapter IX, p. 687, para. 51
When you walk into the CBOT building, this quote should be on the wall. I remember when taxi cab drivers were trading in the bond pit and firemen and policemen were trading grains. Times have changed, and because of electronic trading there are even more opportunities for the common man because he no longer needs to own a membership and can trade from the comfort of his home.
With trading volumes reaching record levels, we should work to protect our industry by keeping over-regulation from stifling that growth. As we approach the fourth of July holiday, before we get too busy with barbecues, picnics and fireworks, we should take a moment to remember and appreciate the boundless opportunities and economic freedoms we are afforded because of the sacrifices that were made by our founding fathers. They pledged to one another “[their] lives, [their] fortunes, and [their] sacred honor” in order to create a unique and wonderful place that is the United States of America, the land of opportunity. In order to sustain the growth of our industry we must continue to look to the founding fathers as a guide, and while remaining true to our convictions be open minded to the changes presented by a global economy.
“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” – Benjamin Franklin
Summer Intern Education Series
John J. Lothian & Company, Inc. is pleased to announce today the creation of a Chicago-based industry-wide summer intern education series to introduce the history, innovation, key leaders and future opportunities to participating interns, summer workers, new employees and those interested in careers in the trading and markets. The series, which kicks off on July 16, features presentations from a select group of industry leaders, innovators, entrepreneurs, attorneys, technologists, investors, traders and other industry participants.
The series will start on July 16, with an event featuring Leo Melamed speaking about his experience and philosophy of growing global markets. The kickoff event will also feature Emily Lambert, author of “The Futures,” as well as Pat Fay of Russell Investments (The impact of indices) and Tom McCabe of OneChicago (The story and future of securities futures).
The kickoff event will be held at the CME at 20 South Wacker and rest at the CBOT Building. 141 W. Jackson Blvd. The afternoon series will continue with events on July 18, 23, 25 and 30.
To read more about the program and buy tickets, click HERE.
Independence from News
Since tomorrow (July 4) is a US holiday, we won’t be publishing the John Lothian Newsletter… or any other newsletter, for that matter. Hope everyone on holiday has a fabulous day off!
BlackRock Hires NYSE Liffe U.S.’s Callahan in Cash Role
Matthew Leising – Bloomberg
BlackRock Inc. (BLK) hired NYSE Liffe U.S. Chief Executive Officer Tom Callahan as deputy head of its cash-management group.
***JK: Tom looks good in Black.
MarketAxess Announces June 2013 Volumes
Total estimated USHG market share on MarketAxess increased to a record 16.6% in June 2013 from 12.9% in May 2013. Total estimated USHG market share on MarketAxess increased to a record 14.1% in 2Q13 from 12.3% in 1Q13.
Getco goes away
Lynne Marek – Crain’s
Getco LLC, arguably once the biggest name in Chicago high-speed trading firms, is gone. Not only is the name of Getco, which last year said it would buy Knight Capital Group Inc. for $1.4 billion, being retired, but the newly merged company will no longer be headquartered in Chicago, but rather in Jersey City, N.J.
***JK: After an exhaustive search for a new name, perhaps as long as 3 minutes, Getco came up with KCG Holdings.
Deadline Splits an Agency on Trading Rules Abroad
By BEN PROTESS – NYTimes.com
As the deadline nears, the plan to regulate trading by American banks in London and beyond has set off a rare breakdown of decorum at an agency long known for its cordial style and unanimous votes. … “It’s like the seventh grade but without the lollipops,” said a Congressional aide.
Perseus Clocks Sub-Nanosecond UTC Timescale in Equinix’s London Slough Campus
Perseus Telecom, a leading provider of ultra-low latency, high capacity networks from market-to-market, today announced its High Precision Time offering that provides deterministic synchronization with the US timescale UTC (Coordinated Universal Time) assisting firms balance enterprise systems and meet regulation guidelines.
***JM: STOP – - – PERCY TIME
|View Special Report »|
London has long been seen as THE global financial center. But given economic, political and regulatory changes, can it retain its title as the world’s top financial marketplace? For many in the financial sector, the answer is yes, but it must navigate some tough political and regulatory challenges from the European Union.
John Lothian News took a 2013 snapshot of the derivatives landscape in London. We spoke with regulators, exchange leaders, buy-side participants and others, and put together this special presentation featuring five short videos, numerous charts, graphs and fun facts, and an in-depth story on the City, from the Big Bang of 1986 to the recent financial crisis and its aftermath.
With the impending regulatory overhaul, changes to financial benchmarks such as LIBOR and threats of transaction taxes and disharmony across jurisdictions, London faces some clear headwinds. With these challenges, though, come opportunities – for exchanges, fund managers, vendors and other service providers. London’s financial landscape will certainly evolve, but will continue moving forward.
As the old World War II poster said, “Keep Calm and Carry On.”
|View Special Report »|
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It’s a Catchy Tune, but Can You Manage to It?
WILLIAM ALDEN – NYTimes.com
Some former corporate chieftains spend their post-executive days playing golf or attending board meetings outside the public view. Not Andrew Mason.
The importance of being lazy
Al Gini – Crain’s Chicago Business
Like it or not, according to self-help group Workaholics Anonymous, given the raw number of hours we put into our jobs, most of us are either active workaholics or potential workaholics. Historian Daniel Rodgers argues that we are a nation predisposed to hard work and that the “elevation of work over leisure” is an ethos that long has permeated our lives.
CME Group Webinar July 18: U.S. T-Bond Delivery Basket – Bridging the 5-Year Gap
Remember the 5-year period during the early 2000s when the Treasury Department suspended issuance of 30-year bonds? We may soon see a dearth of bonds available to deliver. Although the current front-month has multiple short-dated issues for cheapest-to-deliver (CTD), the short-dated deliverable bonds will diminish over the next two years. What will this mean? Tune in July 18 at 10am CST; 4pm BST to find out.
***DA: Soon it will be PTT – Perseus Telecom Time
***JM: And that time will be… five seconds ago.
MarketsWiki Page of the Day
Merri Jo Gilette
MarketsWiki Recent Updates
Companies, Organizations and Groups
41,292,965 pages viewed, 7,570 articles, 161,570 edits
NASDAQ OMX and Borsa Istanbul Sign Strategic Partnership
The NASDAQ OMX Group (Nasdaq:NDAQ) and Borsa Istanbul have signed a partnership agreement today, which aims to expand Borsa Istanbul’s global presence, while substantially strengthening Istanbul’s position as a regional hub for capital markets.
Tension rises on growing shift of power to Esma
Anish Puaar – Financial News
A tug of war over the scope of powers given to European watchdogs formed after the crisis is emerging, with the UK doing its best to resist a growing desire from the European Commission to give the new watchdogs more teeth.
China Bond Futures Get Green Light
China’s State Council has approved the reintroduction of government bond futures, a step forward in plans to expand the domestic fixed-income market and signaling an end to an eighteen-year ban on the financial derivatives after a trading scandal, reported China Securities Journal Wednesday, citing people familiar with the situation.
U.S. Banks Must Meet Basel Mark as Small Firms Get Easier Terms
U.S. banking regulators agreed to ease requirements for some of the smallest lenders in a new set of capital standards designed to prevent a repeat of the 2008 crisis that almost destroyed the world’s financial system.
To Basel’s Defenses, the Fed Adds a To-Do List
PETER EAVIS – NYTimes.com
After overlooking so many excesses before the financial crisis, bank regulators have spent the last five years trying to regain credibility. The public got an important opportunity to assess their progress on Tuesday when the Federal Reserve approved a sweeping new set of rules intended to reduce the riskiness of banks’ activities and make them more resilient to losses.
U.S. judge tosses ‘arbitrary’ SEC oil payment disclosure rule
The Washington Times
A federal judge in Washington D.C. tossed out a new securities regulation Tuesday that requires oil, gas and mining companies to disclose payments to foreign governments, The Dallas Morning News reported. The SEC’s extractive resources rule was added to the 2010 Dodd-Frank Wall Street reform law, Reuters said.
Portugal Resignation Rocks European Markets
ED BALLARD – WSJ.com
Portuguese bonds and stocks led heavy declines in European markets Wednesday after Foreign Minister Paulo Portas resigned, triggering the worst political crisis since Portugal accepted an international bailout two years ago.
The final countdown
Alex Mcdonald – FOW
Agreeing on what the shape of the European sister of the Swap Execution Facility will be has been a long time coming. Now, as Mifid II enters the so-called trialogue process where the co-legislators have to agree on the final text of the regulation, we highlight one of the many issues which needs to be more understood.
SEC Announces Enforcement Initiatives to Combat Financial Reporting and Microcap Fraud and Enhance Risk Analysis
The Securities and Exchange Commission today announced three new initiatives that will build on its Division of Enforcement’s ongoing efforts to concentrate resources on high-risk areas of the market and bring cutting-edge technology and analytical capacity to bear in its investigations.
Clues to How the SEC Is Thinking About Crowdfunding
Officials questioning the usefulness of the funding model see restaurants and medical clinics, not tech startups, as key
SEC Creates Task Force to Combat Accounting Fraud
The Securities and Exchange Commission’s enforcement division is launching three new initiatives to combat financial reporting and microcap fraud and enhance its risk analysis capabilities with the use of sophisticated analytical technology.
Requiring Defendants to Admit Guilt Will Be Costly for S.E.C.
DAVID ZARING – NYTimes.com
The Securities and Exchange Commission recently qualified its longstanding policy that allowed companies to “neither admit nor deny” their guilt when settling cases. The policy tinkering has come in the wake of criticism by lawyers, academics and, most memorably, Judge Jed S. Rakoff of the United States District Court in Manhattan.
Regulation threatens global transaction model
Matthew Attwood – Financial News
Regional regulation is increasing costs for international banks, leading some to question the size of their international operations.
Speech By US Federal Reserve Governor Powell On International Financial Regulatory Reform
[Japan] Press Conference by the Minister for Financial Services (June 28, 2013)
Exchanges & Trading Facilities
Deutsche Boerse to launch Cloud Exchange to trade computing power
Reuters via Yahoo! News
By Harro Ten Wolde FRANKFURT – German financial markets operator Deutsche Boerse is planning to commoditize computing power with the launch early next year of the world’s first independent exchange for trading cloud computing capacity.
LME posts new monthly trading record for June
Trading at the London Metal Exchange (LME) reached record levels in June, up 28% on June 2012, taking volumes in the first half of the year to a new high. June saw volumes rise for a third consecutive month with 16,319,351 lots traded. Trading in the first half rose 9% to 86,782,950 lots compared with 79,564,146 lots in the corresponding period of 2012.
SGX securities and derivatives activities increase in June
Singapore Exchange (SGX) today said its securities and derivatives activities increased in June, compared to a year earlier. For the last 12 months (July 2012 to June 2013):
Stock market capitalisation increased 13% to S$954 billion.
Total bond fund-raising increased 45% to S$196 billion. Of this number, S$4.5 billion was denominated in Chinese renminbi.
Securities daily average value (SDAV) increased 11% to S$1.5 billion.
Derivatives daily average volume (DDAV) increased 34% to 412,558 contracts.
Volume of OTC commodities cleared increased 79% to 446,892 contracts and volume of iron ore swaps cleared tripled to a record 370,224 contracts.
BOX Price Improvement Activity for June
In the month of June, price improved contracts on BOX Options Exchange averaged 187,312 per day. Price improvement versus the prevailing NBBO for contracts submitted via BOX’s price improvement auction, PIP, averaged $185,259 per day, while total savings to investors this month was $3.7 MM.
June Turnover At Boerse Stuttgart In Region Of EUR 6.9 Billion – Sharp Increase In Exchange-Traded Products – Discount Certificates In Demand
According to the order book statistics, the total volume of trades at Boerse Stuttgart in June 2013 was down on the total for May at around EUR 6.9 billion.
Moscow Exchange’s Bond Market Hit A Record High In H1 2013
In H1 2013 the average daily value traded on the Moscow Exchange’s bond market reached its highest level since 2007.
NZX June 2013 Shareholder Metrics
July 2013 InBOX
This is the July issue of InBOX, your news source from inside the BOX Options Exchange. This monthly publication will provide convenient summaries of recent developments at BOX.
CME Group Inc. Announces Date Of Second-Quarter 2013 Earnings Release, Conference Call
[CBOE] Solicitation and Allocation of New Option Class Procedure
[CBOE] July 2013 Fee Changes
[CBOE] Prearranged Trades
Hedge Funds & Managed Futures
Pimco Total Return Had $9.9 Billion Withdrawals in June
Charles Stein – Bloomberg
Bill Gross’s Pimco Total Return Fund (PTTRX), the world’s largest mutual fund, absorbed a record $9.9 billion in net redemptions last month as investors fled bonds in anticipation of the Federal Reserve scaling back its purchases.
Cargill explores purchase of ADM’s cocoa unit – source
Josephine Mason – Reuters
Cargill Inc , one of the world’s leading cocoa traders, has explored the possibility of buying Archer Daniels Midland Co’s cocoa business, a source familiar with the situation said, a purchase that would create a global giant in the sector.
SAC Capital posts strong June amid market selloff, U.S. probe
Reuters via Yahoo! News
By Katya Wachtel and Matthew Goldstein NEW YORK – SAC Capital Advisors, the hedge fund firm run by billionaire Steven A. Cohen that has been under intense scrutiny as part of an insider trading investigation, posted a surprisingly strong return in June amid a global market sell-off.
Fortress Macro Fund Named Discretionary Macro-Focused Hedge Fund of the Year by Institutional Investor
Business Wire via Yahoo! Finance
Fortress Investment Group LLC today announced that the Fortress Macro Fund was recognized by Institutional Investor as “Macro-Focused Hedge Fund of the Year, Discretionary,” at the magazine’s 11th Annual Hedge Fund Industry Awards.
Rock Creek Group Named Institutional Investor’s 2013 Manager of the Year for Large Fund of Hedge Funds
Business Wire via Yahoo! Finance
The Rock Creek Group, a leading investment and advisory firm with about $8.5 billion in assets under management, was named “Manager of the Year” in the Large Fund of Hedge Fund cat
Neymar-Investing Hedge Fund Doyen Said Backed by Kazakh Family
A property developer and luxury hotel chain owner are among a small group of investment partners in Doyen Capital LLP, which has made bets on the career of soccer stars Neymar and Radamel Falcao, two people who have worked with the hedge fund said.
Eze Castle Integration Winning Streak Continues with More Accolades for its Hedge Fund Technology, Private Cloud Services
Eze Castle Integration earns multiple honors from Hedgeweek USA 2013, CRN 2013 Solution Provider 500, MicroScope ACEs 2013 awards for its Hedge Fund Technology, Private Cloud Services.
MarksJarvis: Gold prices have precious few ways to break their fall
Banks & Brokers
DealBook: Deutsche Bank Resists Pressure to Scale Back Its Global Ambition
New York Times
The universal banking model is under attack by regulators, but Deutsche Bank seems determined to keep its two-track focus of branch network and investment bank.
Bair Concerned on Banks’ Exposure to Rate Moves
Former Federal Deposit Insurance Corp. Chairman Sheila Bair talks about financial regulation and U.S. banks’ exposure to an increase in interest rates.
Insight: Citigroup’s crown jewel is losing some luster
Reuters via Yahoo! News
By David Henry NEW YORK – Citigroup may be losing ground in a business that is central to its recovery plan, as rivals catch on to how much money the unit makes. The bank’s transaction services unit, which moves $3 trillion around the world daily for companies, banks and national governments, received scant attention from competitors and investors for years.
JPMorgan oil chief moves to Noble, new co-heads named: SparkSpread
Reuters via Yahoo! News
NEW YORK – JPMorgan Chase & Co named Jeff Katz and Mitch Rubinstein to run its global oil operation after the division’s previous chief Jeff Frase left the bank after five years for Noble Group , industry website SparkSpread.com reported on Tuesday.
HSBC wins OK of record $1.92 billion money-laundering settlement
Reuters via Yahoo! News
By Jonathan Stempel – A federal judge has approved HSBC Holdings Plc’s record $1.92 billion settlement with federal and state investigators of charges that it flouted rules designed to stop money laundering and thwart transactions with countries under U.S. sanctions.
Royal Bank of Scotland to trim 1,800 jobs
Associated Press via Yahoo! News
Taxpayer-owned Royal Bank of Scotland said Tuesday it plans to cut as many as 1,800 jobs at its Ulster Bank division by 2016.
RBS Hires Ex-BOE Deputy Governor Lange to Review Lending
Large has been appointed alongside consultant Oliver Wyman to “undertake a thorough and independent review of lending standards and practices” at RBS and its NatWest unit, the Edinburgh-based lender said in a statement on its website today.
Goldman Sachs Terminates General Guarantee Agreement Guaranteeing the Obligations of Goldman Sachs Ireland Finance
ICAP Electronic Broking: June 2013 Volumes
Abel/Noser Solutions ranks world’s best brokerage firms
Abel/Noser Solutions (ANS) has released its annual Global Broker Performance Study, which ranks global brokerage firms on their ability to demonstrate best execution for clients and includes a breakdown of the top brokers in the North American, European and Asian Pacific regions.
Clearing & Settlement
CFTC Approves Order to Remove Foreign Exchange Asset Class from the Provisional Registration of ICE Trade Vault, LLC as a Swap Data Repository
The U.S. Commodity Futures Trading Commission (CFTC) today approved an order for ICE Trade Vault, LLC, a provisionally registered swap data repository, to remove the “foreign exchange” asset class as an asset class for which ICE Trade Vault, LLC will accept data. This approval is pursuant to section 21 of the Commodity Exchange Act and part 49 of the Commission’s regulations.
LCH.Clearnet Granted Licence to Extend Interest Rate Swap Clearing Service to Australian Banks
LCH.Clearnet Limited, the multi-national clearing house, today announced that the Australian government has granted an extension to its existing clearing and settlement facility licence in Australia that will enable LCH.Clearnet to offer its market-leading SwapClear OTC interest rate swap clearing service directly to Australian banks.
OCC Earns Honorable Mention In Ragan’s PR Daily Awards In The Best Annual Report Category
Indexes & Products
NASDAQ OMX Commemorates Six Months of Ownership of the NASDAQ Dividend Achievers Indexes
The NASDAQ OMX Group, Inc. today commemorates the six-month anniversary of the ownership of the NASDAQ Dividend and Income Index Family, which has seen assets under management on products linked to the Family increase 34.7 percent, to $19.0 billion from $14.1 billion, since it was acquired from Mergent, Inc. in December 2012 and subsequently expanded with two additional indexes.
Axioma And CSI Launch An Innovative Suite Of Optimized Factor Indices For The China A-Share Market
FENICS Works With Western Union Business Solutions In Europe
FENICS Software Ltd. today announced that Western Union Business Solutions, a division of the Western Union Company, a leader in global payment services, has licensed FENICS Professional, a pricing and risk management system, to enable it to extend increased foreign exchange products and services to its European clients.
Thomson Reuters Launches New Look Accelus Risk Manager and Delivers Unified Platform Approach for Governance, Risk & Compliance
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the development of a new user interface for Accelus Risk Manager (ARM), which will bring enhanced risk management and risk reporting capabilities to governance, risk and compliance functions within organisations. Accelus Risk Manager’s new look incorporates best practices in useability, and was designed in collaboration with clients, to promote increased engagement with risk management by the front-line business in organisations.
Mistrial declared in U.S. case against London fund manager
Reuters via Yahoo! News
By Nate Raymond NEW YORK – A U.S. jury failed to reach a verdict on whether a London-based portfolio manager was criminally responsible for participating in an alleged scheme to overvalue his hedge fund’s assets by $80 million, resulting in a mistrial.
SEC accuses Bedford man of investment fraud
Fort Worth Star-Telegram
Regulators say Bret Boteler and his Hurst-based EnerMax sold unregistered securities and misled investors.
No Remedy Against SEC for Defrauded Madoff Investors
Investors who lost their life savings at the hands of Bernard Madoff can’t sue over the Securities & Exchange Commission’s failure to earlier uncover his multi-billion dollar Ponzi scheme, the largest in US history.
Environmental & Energy
EU carbon market expects narrow win in crucial rescue vote
Members of the European Parliament on Wednesday will vote on a compromise plan to try to prop up the EU emissions market, the world’s biggest carbon trading scheme.
Japan, Vietnam sign carbon offset market deal
Reuters Point Carbon
Vietnam has become the sixth country to sign up to a scheme that allows Japanese companies to earn cheap carbon credits by helping developing nations cut CO2 and other greenhouse gas emissions, the Japanese government announced on Tuesday.
German Federal Environment Minister Peter Altmaier Visits European Power Exchange EPEX SPOT
World’s First Physical Precious Metals Exchange with Peer-to-Peer Bullion Trading Capabilities Launches in Singapore
Singapore Precious Metals Exchange (SGPMX), the world’s first physical precious metals exchange with peer-to-peer bullion trading capabilities integrated into the trading platform, launched in Singapore today, amid Singapore’s drive to encourage gold trading in the country. As part of the launch, SGPMX also announces the entry into an MOU with Certis CISCO which will act as the custodian for bullion storage.
Tokyo Stock Exchange: HSBC Securities (Japan) Limited, Tokyo Branch, The Hongkong And Shanghai Banking Corporation Limited And HSBC Bank Plc Are Registered On The Lead Managing Underwriter List Of TOKYO PRO-BOND Market
HKFE Announces Revised Margins For Ping An Insurance And PetroChina Futures
HKEx: Admission Of Sinopec Engineering To List Of Designated Securities For Short Selling
India rejects MCX’s foreign investment plan: government
Reuters via Yahoo! Finance
India has rejected the foreign direct investment proposal of the Mumbai-based commodity exchange MCX, a government statement said on Wednesday, without giving any details.
Dubai Gold And Commodities Exchange Launches SENSEX Futures
Further expanding its portfolio of derivatives products, the Dubai Gold and Commodities Exchange (DGCX) today announced the launch of SENSEX Futures, the first ever Indian equity index futures contract to be listed on an exchange in the Middle East and North Africa (MENA) region.
New Qatar emir shakes up sovereign wealth fund
Camilla Hall in Abu Dhabi and Simeon Kerr in Dubai and Ed Hammond – FT.com
Sheikh Hamad bin Jassim al-Thani, Qatar’s former prime minister and architect of its assertive investment strategy, has been replaced as head of the country’s sovereign wealth fund, as the emirate accelerates its transition to a younger generation.
Myanmar Mints Its First Millionaire Tycoon
As Asia’s forgotten last frontier Myanmar opens up, after 50 years of military rule, Serge Pun stands out as its poster boy. Shares of his Singapore-listed, property-to-farming company are up 160% in the last one year, making Yoma Strategic Holding the most valuable private company in Myanmar with a market cap just shy of a billion dollars.
Iranian Delegates Visit Spain Capital Markets
A delegation of Tehran Stock Exchange and Iran Farabourse (SMEs Exchange) visited BME and Spain’s capital market authorities, 25-28 June 2013.
Keynote Address By Deputy Chief Executive, Securities Commission Malaysia At The Malaysia Investor Relations Award 2013