Industry news

June 13, 2012: U.S. Buy-Side Firms Threaten to Stop Trading Swaps Unless Fees are Reduced; New Blood at LSE Makes Further Growth Likely; Clamour for change on Europe’s banks

June 13, 2012: U.S. Buy-Side Firms Threaten to Stop Trading Swaps Unless Fees are Reduced; New Blood at LSE Makes Further Growth Likely; Clamour for change on Europe’s banks
TABB Group reports that many buy-side firms, reacting to high dealer fees and collateral requirements, say they’d rather just stop trading swaps altogether if that’s how it has to be. The big management reorganization at the London Stock Exchange Group looks to some to be a precursor to future expansion for the company. Across the eurozone, heads of state are calling for a major overhaul on the way that Europe’s banks are run and regulated. In today’s top section, John Lothian sends a crew to London and misses out on fun with a kilt. See also his essay on the recession in the financial sector.

First Read

Kharouf and Lothian to London, but not that Lothian

Jim Kharouf and Patrick Lothian are headed to London for International Derivatives Week, or IDX as it is known affectionately, at the end of June. Kharouf is well known in London circles, squares and pubs and has been there many times. This will be Patrick Lothian’s first trip to London, or anywhere overseas for that matter.

Patrick is our head of video production, both for John Lothian News and John Lothian Productions. While in London, he will be shooting content for a video series about exchange builders we began work on last year. He will also shoot the first videos for this summer’s MarketsWiki Questions series, which we have yet to detail.  

Besides work, both Jim and Patrick have been invited to participate in the first annual FFastFill Futures for Kids Cricket match. See the details below.

I was ready to buy a ticket and come to London just to have the chance to play cricket; however, Jim and Patrick are the better athletes here at John J. Lothian & Company, Inc, which means there is less chance of an unfortunate international incident with them playing instead of me.  

I also regret missing IDX this year and not seeing my friend Simon Rostron in a kilt at the IDX gala dinner. He accepted the kilt challenge first accepted by the FT’s Jeremy Grant. Simon’s fundraising for the kilt challenge is going well and he has already raised £2,922.00 of the £3000 target he set. Will someone please put this man over the top of his goal?

FFastFill Future for Kids Cricket match

On the 26th of June an England Cricket team captained by Keith Todd will take on a Barbarian team led by Hamish Purdey a well-known ‘sledger’ from down under!

The match will take place at the Honourable Artillery Company or HAC in the City at 3pm on the 26th of June.  The players are from the wider industry and partners. It is set up to become an annual event in which to have a bit of fun and to raise some money for Futures for Kids the Futures industry .

Charity Registration No. 1124171

Futures for Kids raises funds on behalf of the futures and options industry for charities which work to provide better lives and futures for children internationally.

Please come and watch. If you would like to participate by making a donation please, log onto the Just Giving site at the links below. Donate to the team you expect to win!

http://www.justgiving.com/FFastFillCricketDayEnglandTeam

http://www.justgiving.com/FFastFillCricketDayBarbarians

~John J. Lothian

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Trading Industry Hit by Recession
By John J. Lothian

The world of trading is experiencing a recession. If you were to define industry GDP as traded and cleared volumes times commissions and fees, we would have experienced two consecutive quarters of lower GDP in futures, equities and options markets.  

Besides this metric, we are seeing proprietary trading firms start to shed traders, support staff and executives. A sure sign of a recession is higher unemployment. Crain’s Chicago Business reporter Lynne Marek yesterday reported that the venerable electronic trading firm GETCO had laid off 40 workers, including managing director Ed Boyle.

I believe the trading world is suffering from several shocks simultaneously, which is causing volumes to decline. First is the financial crisis. It is not over yet and the lasting impact of flat-lined interest rates has taken a key fundamental variable for every market and turned it into a near constant.  

Secondly, the regulatory reform, spawned by the financial crisis, has created uncertainty, which in turn has slowed growth in the industry. This is where the value of principles-based solutions would have been a better solution than the regulatory drift back to prescriptive solutions.

Lastly, the MF Global bankruptcy has undermined confidence in the futures markets, brokerage firms and the foundation of segregated funds. Like the oil shock in the 1970s, the MF Global bankruptcy was a shock to the trading world which will retard volumes and trader participation for months and years to come. At the FOW Roundtable I moderated in Eurex’s Chicago offices on Monday, one participant said some traders were executing trades in the swaps markets instead of futures because the due diligence of an OTC counterparty is easier to figure out than the regulatory and legal uncertainty overhanging the futures markets in light of Dodd-Frank and MF Global.

The near-zero level short term interest rates have left our markets more highly correlated, and volatile. Trading one market gives a trader nearly the same exposure as trading many other correlated markets, where once these markets reacted to their own fundamentals.

Some people are so fed up with Dodd-Frank that the sheer ridiculousness of the size of the legislation and accompanying rules is offered as prima facie evidence of its utter ineffectiveness. Simplicity and elegance has been replaced by complexity and oafishness in regulation.  

As long as I have been in the futures industry, we have experienced a dynamic, growing industry. There have been hiccups along the way, but I only remember one year when CBOT volumes were down year on year back in the 1980s.  But that was more of a sector issue; overall, futures and stock volumes were up for the year, but the CBOT’s contract mix led to a mild decline. CME Group’s reported volumes for May showed overall volumes were down 2 percent from a year earlier, with its interest rate complex off 8 percent, from a year earlier. On the positive side, there are also green shoots all around us with new contracts like Eurex’s OAT contract and others.

I lived through the 1983-84 recession in the U.S. economy just as I was starting my full-time employment after graduating from college in 1983. My first job was cut short and I experienced a layoff when declining volumes and structural changes in the industry following regulatory changes earlier caused firms to pull out Knight-Ridder terminals.  

We have been blessed by a wave of growth in the futures industry fueled by product innovation, technology innovation, pro-competition based regulation and fluctuating interest rates. The dearth of IPOs in the equity space, especially following the Facebook face plant, is leaving a key sector without new stories to tell.  

One thing the trading world – particularly futures and options –  has always had going for it is the next crisis. The next crisis is seemingly always a driver of increased volume. However, if our growth strategy is hoping for a crisis, a drought or a war, then we don’t have a strategy. What we need is a proactive strategy of innovation, education and marketing.

Rather than riding the tide that raises all ships, we are going to have to learn how to create our own waves to ride. I like to quote the late management consultant Peter Drucker who said, “Business is about two things, innovation and marketing.” We need to offer something new and different and we need to be able to tell people about it and create the demand.  

How are we going to get out of this industry recession?  We are going to have to innovate, educate and market.   

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Trading firm Getco cuts 40 workers
By Lynne Marek – Crain’s
Getco LLC, one of Chicago’s largest trading firms, last week cut about 40 employees globally, including at least one top manager, as the firm realigns its focus and operations under a new CEO, according to sources familiar with the reduction. Among those cut was managing director Edward Boyle, 49, who was based in Chicago and had business development duties across the firm, the sources said.
http://jlne.ws/LCuO2l

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PhillipCapital Continues Expansion of Global Footprint in U.S.; Hires Robert Keeley to Lead Sales Effort at U.S. FCM
Phillip Futures Inc. (PFI), member of the Singapore-based PhillipCapital group of companies, has just begun accepting U.S. customer business and hired Robert Keeley to lead the sales effort. Keeley, a 21-year veteran of futures trading, sales and management, has joined the firm as Senior Vice President, Director of Sales and Business Development.
http://jlne.ws/MLPBSC

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The National Stock Exchange Appoints William Karsh as Special Advisor
National Stock Exchange, Inc., wholly-owned by the CBOE Stock Exchange, LLC, announced today the appointment of William Karsh as Special Advisor. Karsh’s expertise in electronic trading and market structures, plus his extensive industry experience, will help spearhead the exchange’s strategic growth initiatives.
http://jlne.ws/LCuL6K

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LSE looking for new CEO of MillenniumIT
By Philip Stafford – Financial Times
The London Stock Exchange’s reshuffle of its key management is continuing with the bourse advertising for a new chief executive of its technology division.
http://jlne.ws/LCuOiE

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New grain trading hours spark anxiety
By Gregory Meyer in New York – Financial Times
When dealing with chunky crop reports from Washington, Tim Gubbels, a Nebraska grain elevator owner, sticks to a routine. He skims the data online, scrutinises broker commentary and types futures orders before the market opens two hours later, often furiously. With Tuesday’s latest set of market-moving crop statistics, he will have almost no time at all to react.
http://jlne.ws/LCuLna

Chicago grain trade weathers ‘live’ data
Reuters
Grain traders in Chicago and beyond breathed easier after the world’s premier market for corn, wheat and soybean futures weathered its first trading session with the “live” release of a major federal crop report.
http://jlne.ws/LCuOiO

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European Regulation – A Tale in Four Acts
Fidessa via RFP Connect
According to the Chinese calendar 2012 is the Year of the Dragon. But if you ask anyone in financial markets, 2012 is the year of the regulator. The current influx of drafts, proposals, consultations, regulations and technical standards is enormous. So much so that it prompted seven of Europe’s most influential trade associations to voice their concerns in an open letter to the European Commission. But it is not only the industry that is suffering under the burden; the regulators are feeling the strain too.
http://jlne.ws/MLwfgl

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Dodd-Frank’s Liquidation Plan Is Worse Than Bankruptcy
By Peter J. Wallison – Bloomberg
Some of the key provisions of the Dodd-Frank Act of 2010, advertised as crucial to preventing a new financial crisis, won’t live up to the claims of its sponsors. We have a nice example of this in the plan that the Federal Deposit Insurance Corp. revealed last month for how it expects to deal with troubled financial institutions under the Orderly Liquidation Authority outlined in the new law.
http://jlne.ws/LCuOiT

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5 myths of the great financial meltdown
CNN Money
Five years after the U.S. economy teetered on collapse, here are five reasons why we need to stop pointing fingers and fix the problems that nearly sank us.
http://jlne.ws/LCuLDF

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Speed Is Making The Stock Market Dangerous. Nascar Shows Us How To Make It Safer.
Forbes
The Facebook IPO gave many investors the same queasy feeling about U.S. markets that used to inspire June Cleaver’s signature line, “Ward, I’m worried about the Beaver.” The Beaver in this case is not a charmingly erratic teen, it’s the collection of ever faster and more complex and interconnected systems and networks that collectively form our “new and improved” electronic securities markets. Alas, like the Beaver, they seem to be capable of impressively flakey behavior.
http://jlne.ws/LCuOzo

MarketsWiki.tv

Per Sjöberg of TriOptima Discusses the Changing Regulatory Environment & Portfolio Reconciliation & Compression

MarketsWiki.tv
The ongoing regulatory overhaul is forcing more firms to find ways to reduce risk and improve capital efficiencies. TriOptima has been working with firms on both issues using its triResolve service for portfolio reconciliation and triReduce services, for portfolio compression. The firm’s services have helped terminate over $110 trillion total notional volume in interest rate swaps since 2008. Per Sjöberg, group chief executive officer of TriOptima, spoke recently with JLN’s Jim Kharouf about the changing landscape.
http://jlne.ws/MAfW1S

MarketsWiki

MarketsWiki Page of the Day
Emil van Essen
http://jlne.ws/OsPPNG

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MarketsWiki Recent Updates

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Jessica Titlebaum; Ken Tropin; Emil Van Essen; William Karsh; Per Sjöberg; Mark Schwartz; John Griffith-Jones; Dan Hart; Ted Leveroni; Paul MacGregor; Patrick C. Lothian

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FCStone, LLC; Emil van Essen Managed Futures; Prudential Bache; CME Group, Inc.; Jefferies & Company, Inc.; Financial Conduct Authority; TriOptima; Omgeo; NYSE Liffe; John J. Lothian & Company, Inc.

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Lead Stories

US Buy-Side Firms Threaten to Stop Trading Swaps Unless Dealer Fees are Reduced, Says TABB
TABB Group
The era of a centrally-cleared, transparently traded, trade-reported swaps market in the US is about to begin, but buy-side firms, frustrated with the fees that dealers are charging for client clearing and unsure of where they’ll raise the estimated nearly $2 trillion in margin or collateral needed, tell TABB Group that if the economics don’t add up, they will stop trading swaps, threatening a liquidity crisis across the $600 trillion marketplace.
http://jlne.ws/LCuLDN

New Blood at LSE Makes Further Growth Likely
By Vladimir Guevarra – WSJ
There’s change afoot for the top management of The London Stock Exchange. Former Nasdaq OMX Chief Financial Officer David Warren will replace Doug Webb as CFO of the U.K.-based exchange. Apart from landing a heavy-hitter, the LSE appears to be signalling that its growth internationally–whether by acquisition or other means–is about to be increased by a notch or two.
http://jlne.ws/LCuOzt

Rutherford leaves CME Group
FT.com
Roger Rutherford has left his role as managing director of foreign exchange products at CME Group, the world’s largest futures exchange. Mr Rutherford, who was based in London, decided to leave the group to pursue other interests, the group confirmed. He joined the CME in November 2010 from CLS Bank, the settlement system for currency trades and left last Thursday.
http://jlne.ws/M2WFI0

Clamour for change on Europe’s banks
By Patrick Jenkins and Alex Barker – Financial Times
There is a growing clamour for change in the way Europe’s banks are regulated and supervised. Suggestions on Monday by José Manuel Barroso, European Commission president, that there should be a pan-European Union supervisor built upon comments last month by Mario Draghi, European Central Bank president. And on Tuesday Vitor Constâncio, his vice-president, went further, arguing that the ECB itself should take over bank supervision.
http://jlne.ws/LCuOPG

JPMorgan’s Dimon says trading losses isolated event
Reuters via Yahoo! News
JPMorgan Chase & Co’s recent trading losses are an isolated incident and the bank is expected to be “solidly profitable” in the second quarter, Jamie Dimon, the bank’s chief executive, will tell the Senate Banking Committee on Wednesday.
http://jlne.ws/LCuRer

Libor Traders Said to Avoid Charges in British Probe
Bloomberg
Traders being investigated by U.K. regulators for the suspected rigging of global interest rates are unlikely to face criminal charges while their firms may suffer record fines, people with knowledge of the probe said.
http://jlne.ws/LCuOPW

Threat Spreads Across Europe
By SUDEEP REDDY And BRIAN BLACKSTONE – WSJ
Borrowing costs for Italy and Spain continued to surge on Tuesday, escalating calls for bigger steps from euro-zone leaders amid a new warning that the crisis is dragging down even the world’s resilient emerging economies.
http://jlne.ws/LCuP6h

Greek Hedge Manager Says Drachma Is Back as Wages Plunge
Bloomberg
Jason Manolopoulos, the hedge-fund manager who wrote “Greece’s ‘Odious’ Debt,” has news for anyone wondering whether the country will exit the euro: The drachma has already returned.
http://jlne.ws/LCuP6r

Germany’s IPO Market Goes Down for the Count
BY EYK HENNING
Germany may be the strong man of Europe, but its IPO market is on its back this year as companies weigh the risks of flotation in an increasingly uncertain environment. Just a few months ago, several substantial initial public offerings looked likely to be completed in Germany before the middle of July. But with the financial markets sweating over troubles in Greece, Spain and Italy, nearly all of the proposed IPOs are in danger of being postponed or scaled back.
http://jlne.ws/LCuP6t

How tiny Finland could bring euro crisis to end
By Matthew Lynn – MarketWatch
The most pressing question about the euro crisis is also the hardest one for anyone to answer. It is easy to analyze why the single currency has gone so badly off the rails, pick apart the flaws in its construction, and identify the mistakes made in the endless bailout packages. But how will the saga eventually resolve itself?
http://jlne.ws/LCuRLr

Regulatory

Sants warns over BoE governor’s powers
By Chris Giles, Economics Editor – Financial Times
Hector Sants, the departing chief executive of the Financial Services Authority, has joined a growing list of senior officials saying the government is making a mistake by giving too much power to the governor of the Bank of England.
http://jlne.ws/LCuPmN

New U.S. regulators question bank capital rules
Reuters via Yahoo! News
The newest members of the U.S. Federal Deposit Insurance Corp raised concerns on Tuesday that forthcoming international bank capital standards, known as Basel III, might not be tough enough.
http://jlne.ws/LCuPmR

UK-backed banks not obliged to warn investors
By Adam Jones, Accountancy Correspondent – Financial Times
UK banks that receive confidential state support should not always be obliged to warn investors about their viability, a regulatory panel tasked with answering one of the most contentious accounting questions posed by the financial crisis says.
http://jlne.ws/LCuPn0

Statement of CFTC Chairman Gary Gensler Regarding Senate Appropriations Subcommittee’s Vote on the CFTC Budget
“At this funding level, the CFTC will have sufficient cops on the beat to promote swap market transparency, to lower risk to the financial system, and to help protect the American people from future bailouts of the financial industry. I am grateful to Senator Durbin and other members of the subcommittee for working to ensure the CFTC has the necessary resources to oversee these markets.
http://jlne.ws/LCuS1T

Fed’s Tarullo Pushes For Less Risk In Shadow Banking
Dow Jones
Federal Reserve Gov. Daniel Tarullo pressed Tuesday for quick action to reduce risks in the shadow banking system, including in money-market mutual funds and in short-term financing markets.
http://jlne.ws/LCuPDl

CFTC May Skip Cost-Benefit Analysis for International Oversight
By Silla Brush – Bloomberg
The U.S. Commodity Futures Trading Commission, already fighting lawsuits challenging the economic basis for two rules, may release a proposal for cross-border derivatives oversight that won’t require analysis of its costs.
http://jlne.ws/Lk01p0

Fidessa Helps Market Participants Make Sense Of EU Regulation – White Paper Assesses Likely Future Landscape To Help Firms Stay One Step Ahead
Fidessa group plc, provider of high-performance trading, investment management and information solutions for the world’s financial community, has announced the publication of a white paper examining the on-going regulatory pressures faced by the European trading community today. Entitled
http://jlne.ws/LCuPDs

Public Statement By SEC Commissioner Luis A. Aguilar: Investor Voices Renewed: The New Investor Advisory Committee
http://jlne.ws/LCuS29

SIX Swiss Exchange Supports Abolition Of Control Premiums On Corporate Takeovers
http://jlne.ws/LCuPTN

Exchanges & Trading Facilities

CME Group Inc. Announces Date of Second-Quarter 2012 Earnings Release, Conference Call

CME Group Inc. will announce earnings for the second quarter of 2012 before the financial markets open on Thursday, July 26, 2012. The company has scheduled an investor conference call that day at 7:30 a.m. Central time.
http://jlne.ws/LCuPTS

ICE Futures U.S. Announces Daily Volume Record
Press Release
ATLANTA, June 13, 2012 /PRNewswire/ — IntercontinentalExchange (NYSE:ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets announced that ICE Futures U.S. established a daily volume record of 851,852 contracts on June 12, with 801,304 futures contracts and 50,548 options on futures traded during the day. The exchange’s previous daily volume record of 840,591 contracts was set on September 16, 2008.
http://jlne.ws/KELu66

[CBOE] PAR Reporting Responsibilities and End of Day
http://jlne.ws/LCuPTW

NASDAQ Announces End-Of-Month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date May 31, 2012
http://jlne.ws/LCuPU0

Borsa Italiana Monthly Update – May 2012
http://jlne.ws/LCuSyV

Warsaw Stock Exchange Derivatives Market In May 2012
http://jlne.ws/LCuSyY

D.E MASTERBLENDERS 1753 celebrates first day of trading on NYSE Euronext
http://jlne.ws/LCuSz1

1st Repetitive General Meeting Of Hellenic Exchanges
http://jlne.ws/LCuQau

SMX E- Gold Futures live for trading
Singapore Mercantile Exchange has announced the successful commencement and completion of its first daily settlement of the E-Gold futures based on the Indian gold price. The contract which went live on 1st June has witnessed a jump of nearly 3 times in its volumes with USD 16 million traded since its launch.
http://jlne.ws/LlLB7F

Hedge Funds & Managed Futures

CME Group and BarclayHedge Honor Managed Futures Leaders
PR Newswire via Yahoo! Finance
CME Group and BarclayHedge recognized leaders in the managed futures industry during the inaugural Managed Futures Pinnacle Awards yesterday at the Museum of Broadcast Communications.
http://jlne.ws/LCuSz6

Hedge Fund Industry Assets to More than Double in 5 Years: Citi Prime Finance Survey
Assets invested with hedge fund firms could more than double by 2016, according to a just-released survey from Citi (NYSE: C) Prime Finance. The study finds that pension funds, endowments, foundations and other institutional investors are increasingly embracing the risk management and diversification that hedge funds offer, and that hedge funds are developing new products that compete with traditional, long-only managers.
http://jlne.ws/LCuQaz

Investors In Hedge Funds Are Starting To Head For The Exits
Forbes
Citigroup says the hedge fund industry could more than double to $5 trillion, but not if hedge fund managers can’t turn around performance first.
http://jlne.ws/LCuQqV

Hedge funds saw $5 billion outflow in April: TrimTabs
Reuters via Yahoo! News
Hedge funds lost $5.1 billion to outflows in April, reversing inflows of $2.8 billon in March, as persisting uncertainty in the euro zone affected investors worldwide. The outflows amount to 0.3 percent of total industry assets, which increased 1.6 percent for the first four months of 2012 to an estimated $1.7 trillion, the research firm said.
http://jlne.ws/LCuSPr

BlackRock plans property fund launch
By Ajay Makan in New York and Ed Hammond in London – Financial Times
BlackRock plans to make direct loans to European commercial property developers, taking advantage of a slowdown in lending by European banks, two executives said.
http://jlne.ws/LCuQHk

TrimTabs and BarclayHedge Report Hedge Funds Redeemed $5.1 Billion in April 2012
BarclayHedge and TrimTabs Investment Research reported today that the hedge fund industry redeemed $5.1 billion (0.3% of assets) in April, reversing a $2.8 billion inflow in March. Based on data from 3,042 funds, the April TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.7 trillion in April, up 1.6% for the first four months of 2012.
http://jlne.ws/LCuQHw

Nearly 60% Considering Futures Over Swaps, Says TABB Group
Katy Burne – Dow Jones
New regulations overhauling the $300 trillion privately traded U.S. derivatives market are threatening to take a big bite out of dealers’ profits, and now customers are threatening to move away from the use of swaps altogether. Nearly 60% of customers surveyed by research firm Tabb Group said they would start using cheaper alternatives in the futures market if the rules make those “over-the-counter” derivatives, called swaps, too expensive to trade, according to a report released Tuesday.

Breaking Down the New Hedge Fund ETFs
ETF Trends via Yahoo! Finance
Global X and AlphaClone recently rolled out ETFs designed to mimic the buying patterns of top hedge fund managers. Skeptics have voiced concerns about the ability of a rules-base index to successfully replicate hedge-fund tactics. Proponents say hedge fund ETFs give investors access to these complex strategies with lower fees and no lock-up periods.
http://jlne.ws/LCuQHA

Ex-Swiss bank chairman taking new role at BlackRock
Reuters via Yahoo! News
The former chairman of the Swiss National Bank Philipp Hildebrand, who quit in a currency trading scandal in January, is joining BlackRock as vice-chairman in October, the U.S. fund manager said on Wednesday.
http://jlne.ws/LCuT62

Marshall Wace co-founder takes aim at industry
Giles Turner – Financial News
The co-founder of one of London’s biggest hedge funds has criticised several players across the capital markets – from banks to credit rating agencies to politicians such as Hank Paulson – and has argued the “financial sector has become much too big”.
http://jlne.ws/LCuQXV

South Carolina pension officials succumb to Wall Street greed
The Daily Caller via Yahoo! News
South Carolina’s pension fund is running a deficit of $14.4 billion, and critics say that like so many other states across the country, South Carolina pension officials were blinded by the sparkle of Wall Street into making risky investments with taxpayer money.
http://jlne.ws/LCuQY6

Private Equity Has Too Much Money to Spend on Homes: Mortgages
Bloomberg
Funds planning to invest more than $6 billion to buy and rent foreclosed homes are finding it easy to raise money. The difficulty is spending it.
http://jlne.ws/LCuTTC

BAML Monthly Investor Survey: Optimism Has “Collapsed”
Dow Jones
Investor optimism has collapsed, and fund managers now widely expect further monetary easing in the euro area and, to a lesser extent, in the U.S., to counter the pain, according to a monthly survey of 260 investors released by Bank of America Merrill Lynch (BAC).
http://jlne.ws/LCuTmv

Are Alternative Funds Losing Their Luster?
Financial Planning.com
Mutual funds that invest in alternative types of securities, ranging from commodities to private equity investments, have been hot. But the heat appears to be cooling off.
http://jlne.ws/LCuTTN

CapitalCube Stock Screener From AnalytixInsight Inc. Now Available on LSE’s ProQuote Portal
Covering more than 40,000 global equities, CapitalCube is the largest provider of company analysis including fundamental research, corporate actions, earnings quality, dividend quality, and equity screening solutions to the global investment community.
http://jlne.ws/LCuTmA

Banks & Brokers

Victor IB Holdings LLC Receives Strategic Investment, Expands Board of Directors
Victor IB Holdings LLC, operator of Victor Securities and Victor Technologies, announced today it has received equity funding from a group of private investors and financial industry veterans. Victor IB Holdings announced that it will add new leadership to its Board of Directors, including Michel Daher, Chairman of Master Capital Group SAL; and Jim Brown, an investor with significant experience investing in electronic trading systems including Liquidnet, Currenex, and FXCM.
http://jlne.ws/MGUlsH

Ex-Fund Manager Sues Saying RBS Ignored Fraud Warnings
Bloomberg
A former hedge-fund manager sued Royal Bank of Scotland Group Plc’s NatWest unit claiming the bank ignored evidence its accounts were used to conduct what may be one of Britain’s biggest Ponzi schemes, in which he lost about 19.3 million pounds ($30 million).
http://jlne.ws/LCuUa4

Gorman Touts Differences From Dimon on Risk Management
Bloomberg
While JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon was in Washington preparing to explain his firm’s $2 billion trading loss, Morgan Stanley CEO James Gorman was in New York making the case to investors why it couldn’t happen at his firm.
http://jlne.ws/LCuUa9

JPMorgan doomsday scenario revealed
By Tom Braithwaite in Washington – Financial Times
Just as JPMorgan Chase’s chief investment office was engaging in disastrous lossmaking trades, other parts of the bank were working out what would happen if it suffered a “catastrophic, idiosyncratic event”.
http://jlne.ws/LCuUag

Dimon Says JPMorgan ‘Let People Down’ on Faulty Credit Trades
Bloomberg
This portfolio morphed into something that, rather than protect the firm, created new and potentially larger risks, Dimon said in prepared remarks ahead of his appearance tomorrow before the Senate Banking Committee. “We have let a lot of people down, and we are sorry for it.”
http://jlne.ws/LCuUaj

JPMorgan Traders Took Risks They Didn’t Understand, Dimon Says
Bloomberg
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon told Congress the bank let traders take risks they didn’t understand while he didn’t answer key questions about more than $2 billion in trading losses.
http://jlne.ws/LCuTCY

JPMorgan’s losses keep adding up
CNN Money
The stock market hasn’t been kind to JPMorgan Chase lately. The recent market gyrations have exacerbated the bank’s $2 billion loss from its bad bet on a thinly traded slice of the derivatives market.
http://jlne.ws/LCuUqK

Deutsche Bank Co-CEO Jain: Banks Need to Restore Public Trust
Dow Jones
Banks have made mistakes that contributed to the banking crisis, and the banking industry’s biggest challenge is to restore the public’s trust in the sector, Deutsche Bank AG (DB) Co-Chief Executive Anshu Jain said Tuesday.
http://jlne.ws/LCuTD5

BofA Invests $50B for the Environment
Zacks via Yahoo! Finance
Bank of America Corporation (BAC) is the latest to join the list of banks pledging finance towards environmental causes to develop alternative sources of power in order to ease pressure on the dwindling natural resources.
http://jlne.ws/LCuUqP

Morgan Stanley to drop Smith Barney name: Gorman
Reuters via Yahoo! News
Morgan Stanley’s brokerage joint venture with Citigroup unit, Morgan Stanley Smith Barney, will eventually drop the Smith Barney name, the investment bank’s chief executive said at an investor conference Tuesday.
http://jlne.ws/LCuUH2

Morgan Stanley “maniacally” focused on cost cuts: CEO
Reuters via Yahoo! News
Morgan Stanley is “maniacally focused” on cutting costs apart from compensation and is on track to reduce expenses by $500 million this year, Chief Executive James Gorman said on Tuesday.
http://jlne.ws/LCuTDa

UBS Tops European Equity Rankings for Twelfth Successive Year
Business Wire via Yahoo! Finance
UBS is today named the leading Pan European Brokerage firm for Equity Linked Research for a record twelfth consecutive year, in the Thomson Reuters Extel Survey. The survey also ranked UBS number one in Sales and Equity Trading and Execution .
http://jlne.ws/LCuTDf

BofA Dropped by Sallie Mae as Barclays Wins Upromise Card
Bloomberg
We thought Barclays offered us a better overall execution, Joe DePaulo, SLM’s chief marketing officer, said yesterday in an interview. “This is a step up.”
http://jlne.ws/LCuUXG

Fitch Takes Rating Actions On Spanish Banks Following Sovereign Downgrade
http://jlne.ws/LCuWyW

European Central Bank: Financial Stability Review June 2012
http://jlne.ws/LCuUXR

U.S. Treasury Department Announces $619 Million Settlement With ING Bank, N.V. – Largest-Ever Settlement Reached In A Sanctions Case
http://jlne.ws/LCuWPj

Indexes & Products

FTSE and Cürex Group Announce Global Partnership and the Launch of Independently Calculated, 24/5 Real-Time Executable Benchmarks for Spot FX
http://jlne.ws/LCuWPm

PIMCO Files For Three More Active Bond ETFs
Zacks via Yahoo! Finance
PIMCO looks to continue its bond market dominance with the filing for three fixed income ETFs of popular mutual funds.
http://jlne.ws/LCuWPq

Northern Trust Launches Pooled Index Fund to Invest in Asian Equities
http://jlne.ws/LCuWPt

Standard & Poor’s Announces Changes In The S&P/TSX Canadian Indices – Neo Material Technologies Inc. To Be Removed From The S&P/TSX Composite Index
http://jlne.ws/LCuVei

Mr Price Group Added To Dow Jones Emerging Markets Consumer Services Titans 30 Index
http://jlne.ws/LCuX5N

Technology

MeritKapital Goes Live with SunGard’s SGN for Direct Market Access
MeritKapital Limited, an investment firm licensed by the Cyprus Securities and Exchange Commission, is providing its clients with direct market access (DMA) to the London Stock Exchange via the SunGard Global Network (SGN) international order routing service.
http://jlne.ws/LCuVuF

Numerix Presses GreenButton for Cloud Pricing Capacity
WatersTechnology
Derivatives pricing and risk analytics software vendor Numerix has expanded its on-demand capacity capabilities via an agreement with New Zealand-based cloud computing provider GreenButton, which enables clients of Numerix’s CrossAsset XL spreadsheet pricing platform to offload compute-intensive pricing calculations to their choice of cloud provider using GreenButton’s interface, and to perform otherwise-lengthy calculations within the reporting timeframes specified by regulators if sufficient internal compute capacity is not available.
http://jlne.ws/MM7WPq

Perseus Telecom Wins GTB 2012 Financial Network Innovation Award For Fastest Connection To BM&F Bovespa – Spotlight On Booming Brazil – Ultra-Low Latency Telecommunications Firm Honoured For Pivotal Expansion
http://jlne.ws/LCuXmh

AlgoSpan reveals results of the latest RadioFeedâ„¢ latency analysis
AlgoSpan has announced that RadioFeed can normalise raw exchange data with an average latency of 6.5 microseconds and 99.99 percentile latency of 38 microseconds.
http://jlne.ws/LCuVuQ

Enyx FPGA Based Trading Platform Certified For Chi-X Canada
http://jlne.ws/LCuXmo

Terilogy Provides TS-Associates Precision Instrumentation Solutions to Support KVH Latency Monitoring Service
PR Newswire via Yahoo! Finance
Terilogy Co., Ltd. today announced that KVH has selected TS-Associates Precision Instrumentation solutions to deliver high precision latency measurement services supporting Asian based financial markets participants.
http://jlne.ws/LCuVLb

Enforcement

SEC Charges 14 Sales Agents In $415 Million Long Island-Based Ponzi Scheme
The Securities and Exchange Commission today charged 14 sales agents who misled investors and illegally sold securities for a Long Island-based investment firm at the center of a $415 million Ponzi scheme.
http://jlne.ws/JZFchF

NFA takes emergency enforcement action against Louisiana firms, Level III Management LLC and Level III Trading LLC, and their principal
National Futures Association (NFA) announced today that it has taken an emergency enforcement action against Level III Management LLC (L3M), Level III Trading LLC (L3T), and the firms’ listed principal and associated person (AP), Bruce A. Gwyn. L3M is a commodity pool operator and commodity trading advisor and L3T is an introducing broker. Both NFA Member firms are located in Metairie, Louisiana.
http://jlne.ws/LCuXCK

[ASIC] Former AWB Chief Financial Officer acknowledges breaching legal duties
http://jlne.ws/LCuVLj

Environmental & Energy

BM&FBOVESPA announces result of carbon credits auction held on Tuesday, June 12
BM&FBOVESPA held today (June 12) the third sell auction of certified emission reductions (CER) held by the Municipal Government of São Paulo. Mercuria Energy Trading, based in Geneva (Switzerland), was the winning bidder for the lot, at E3.30 per carbon credit.
http://jlne.ws/M1bXge

Mercuria buys 530k Brazil CERs at 3.30 euros each
Reuters
Swiss trading firm Mercuria bought 530,000 spot Certified Emissions Reduction (CERs) credits at auction from aBrazilian landfill project for 3.30 euros each on Tuesday, Brazilian exchange BM&FBovespa said.
http://jlne.ws/KrWXMy

Bill could kill N.H.’s participation in RGGI
Seacoast Online
It looks as if the amended Regional Greenhouse Gas Initiative bill that passed the House and Senate last week — a bill that both the left and the right decry — will likely make it into law, even if Gov. John Lynch decides to veto it.
http://jlne.ws/K0AXlZ

Asia-Pacific

Malaysia set to surpass HK in listings
By Jeremy Grant in Singapore – Financial Times
Malaysia is set to vault ahead of Hong Kong as Asia’s largest market for international initial public offerings with the planned flotation of shares in two massive government-linked companies defying a gloomy global listings environment.
http://jlne.ws/LCuVLo

Hedge Fund Researchers Looking Into Chinese Companies Are Being Arrested By The Chinese Government
Business Insider
At least two hedge funds have reported their researchers may have been threatened or arrested in China. From the Trib – Two American hedge funds, Absaroka Capital Management LLC and EOS Holdings LLC, also reported their researchers in China were arrested and/or threatened with death by thugs, police or both.
http://jlne.ws/LCuXCZ

Temasek Says Europe Crisis Offers Deal Openings: Southeast Asia
Bloomberg
Temasek Holdings Pte said the turmoil in Europe may result in a market slump rivaling the 2008 global financial crisis, creating opportunities for the Singapore state-owned investment company to make deals.
http://jlne.ws/LCuW1J

[TSE] Statistics on Dates of Annual General Shareholders Meetings for Companies which settle accounts in March 2012
http://jlne.ws/LqZYuO

Taiwan Futures Exchange Monthly Newsletter – June 2012
http://jlne.ws/LCuXTs

Frontier Markets

Head of Nigerian bourse regulator suspended
AFP via Yahoo! News
The head of Nigeria’s stock exchange regulator has been suspended from her post, its board announced Tuesday, weeks after she publicly clashed with politicians over corruption allegations.
http://jlne.ws/LCuW1S

UAE shakes up share ownership rules
Reuters via Yahoo! News
DUBAI (Reuters) – Stock ownership rules in the United Arab Emirates have been overhauled to boost transparency in the Gulf Arab state’s two stock markets and lead to better disclosure during takeovers. Enforcing the regulations will be the main challenge for the Securities and Commodities Authority, analysts said on Tuesday.
http://jlne.ws/LCuW1V

The Palestine Exchange (PEX) Announces Sunday 17 June 2012 An Official Holiday
http://jlne.ws/LCuWie

Miscellaneous

Executive Pay Rises 10% in Britain, Adding to Debate
NY Times
A report released on Tuesday showed that median total pay for executives at companies in the FTSE 100 rose 10 percent, to £3.7 million, even as the index fell 5 percent.
http://jlne.ws/LCuY9P

How One Guy Blew His Chances At A High-Profile Hedge Fund Job Seconds After He Got The Offer
Business Insider
This story should teach hedge fund hopefuls how NOT to go through with an interview.
http://jlne.ws/LCuWip