Industry news

July 12, 2012: Fall of Peregrine’s Wasendorf Presaged in Christmas Toast; Canada’s TMX in Talks to Buy Direct Edge; LSE and Singapore set to cross-trade

TMX Group, in the middle of being acquired, is looking to buy Direct Edge.  London Stock Exchange and Singapore Exchange create a preliminary agreement for cross-listing, possibly indicating closer ties between the exchanges. The CFTC may act on MFGlobal-prompted client-fund protection rules, now that PFGBest has lit another fire of need underneath that agency.

First Read

Other Voices

After the bankruptcy of MF Global last October, we heard countless calls for change within the futures industry. The customer protection firewall had been breached. Absent any “bold action” to make customers whole and rebuild trust between brokers, FCMs and their customers, the industry may never recover. Nine months later, not only has there been no real progress toward rebuilding customer trust, but the industry was hit by the implosion of another prominent FCM, Peregrine Financial Group.

Rapid Ratings International uses a proprietary quantitative system to rate the financial health of corporations and financial institutions, and may provide the answer as to how to rebuild trust within the industry. The company’s Financial Health Ratings system, covers over 8,000 public companies and thousands of private companies (on a confidential basis), using 62 financial and operating ratios to assess companies in terms of debt service management, capital efficiency, sales, cost structure, leverage, and overall profitability. For the two years leading up to the MF Global bankruptcy, Rapid Ratings had placed MF Global into its “high risk” category, citing deteriorating sales and profitability ratios.

Could this ratings and analysis be part of the solution?

For more on Rapid Ratings, see our video with James Gellert on MarketsWiki.tv.

~Doug Ashburn

The PFG Implosion: Lessons (Re)learned
by James Gellert, Chairman and CEO, Rapid Ratings International
Edward Chambliss, Senior Vice President, Rapid Ratings International

For the second time in less than a year the futures industry has been rocked by the implosion of yet another well-known FCM, Peregrine Financial Group, Inc. This time the collapse took place against a backdrop of formal CFTC allegations, from the start, of the misappropriation of customer funds. While PFG was nowhere near MF Global in the size and scope of its business, the firm enjoyed added industry prominence as a “thought leader” and promoter of ”best practices” growing out of its special efforts to instruct large numbers of individual traders by means of the periodicals and books it published over many years.

For the rest of this Other Voices commentary go to:  http://jlne.ws/Oc9wGL

++++

Analysis: So what actually is a “swap” again?
Galen Stops – FOW
It seems that the industry can now breathe a sigh of relief, firms can blow the dust off their SEF application forms and everyone can begin preparing for the swaps regulation that has been lurking on the horizon for some time now. Except that there currently seems to be one tiny spanner in the works that threatens to prevent this stately procession towards a fair, safe and orderly swap market. This detail, which appears to have been overlooked in the documents released by the CFTC following their approval of the new rules, is none other than the actual definition of a ‘swap’.
http://jlne.ws/ObOwzM

*** Just read the 853 page definition.  It is that simple.

++++

Quick View: MCX’s uphill battle in India
By Jeremy Grant – Financial Times
Equity market fragmentation is on the march in Asia. First there was Japan, then Australia, where Chi-X has been doing battle with both countries’ incumbent exchanges. Now it’s India’s turn with news that the markets regulator has allowed MCX, the commodity exchange, to launch a third stock exchange in competition with the National Stock Exchange-Bombay Stock Exchange duopoly.
http://jlne.ws/ObOwjm

++++

Libor Investigation Extended to US Mortgages, but What About TALF Loans?
Naked Capitalism
A good report by Shahien Nasiripour recounts that the OCC has woken up to what a hot potato the Libor scandal has become, and has identified the mortgages that might have been hurt by the rate diddling. To start with, the universe that might have been affected is not that large. Per the Financial Times account :
http://jlne.ws/ObOwQc

++++

How Wall Street can stop worrying and learn to love financial regulation
Washington Post
Amid the massive backlash from Wall Street against Dodd-Frank, some are urging banks to look at the silver lining. Deloitte has a new report urging banks to use the new government regulations to their own advantage — and consider how some of the new rules could actually be a business opportunity.
http://jlne.ws/ObOzeV

++++

Glass-Steagallism and rate-rigging impact
By Jonathan Guthrie – Financial Times
Terribly important to do things in the right order. Don your underpants before your trousers, for example. Otherwise you give the impression you believe yourself to be Superman or a Lucha Libre wrestler. Similarly, politicians need better evidence on the impact of Libor manipulation before they split investment banks from commercial and retail parents, as many commentators are now proposing.
http://jlne.ws/ObOzf0

++++

Barclays’ Rate-Fixing Is the Tip of a Much Larger Scandal, Bank Officials Say
Peter Jukes – Daily Beast
You ain’t heard nothing yet. If you thought the admission by Barclays Bank that it manipulated the key interbank lending rate was shocking, be prepared for a series of larger jolts which could expose the banking system to its worst crisis yet.
http://jlne.ws/ObOwQp

++++

Four Reasons To Chill Out Over Endless Bank Scandals
Rick Newman | U.S.News & World Report
Will it ever end? After Wall Street nearly bankrupted the entire universe in 2008, you’d think the bankers would have gotten their act together and the rest of us would have enacted a zero-tolerance policy toward financial shenanigans. You’d be wrong, of course.
http://jlne.ws/ObOzf5

++++

Timely light on murky areas of trading
By Jeremy Grant in Singapore – Financial Times
Every time the image of the New York Stock Exchange trading floor and its clanging opening bell flashes up on morning business television, the great machine of American capitalism is on view. Here is a trading floor – the great trading floor of the NYSE – teeming with people handling orders. Here is Wall Street at work, channelling the savings of millions of Americans and other investor capital usefully through the system. I hate to break it to you, but this isn’t how the markets work these days.
http://jlne.ws/ObOzvn

**** You mean the world is not what I see on television?  

++++

The silence of the pits
Chicago Tribune
A defining symbol of Chicago business is going the way of the stockyards. But it’s not going without a fight. For generations, the commodity trading pits have brought together buyers and sellers in a cacophony of arm-waving and shouting known as open outcry.
http://jlne.ws/NfnR6y

MarketsWiki.tv

Charlotte Crosswell Talks About The New NASDAQ OMX NLX
MarketsWiki.tv
The interest rate market will get some more competition at the end of the year with the launch of the NASDAQ OMX NLX futures exchange. JLN editor-in-chief Jim Kharouf spoke with exchange CEO Charlotte Crosswell, at IDX 2012 in London, about the new exchange’s move into euro and sterling-based short-term interest rate and long-term interest rate contracts, the trading and clearing platform and who will be participating in the new market.
http://jlne.ws/OR8jsX

JLN Options

Interview:  Rob Newhouse, CEO, Victor Technologies
Rob Newhouse is the chief executive officer of Victor Technologies, a provider of trading and risk management applications. The company was formed when the Gargoyle Group, an options market-making firm, spun off its technology arm in 2010. He spoke with Sarah Rudolph and Jeff Bergstrom of John Lothian Newsletters about a new infusion of capital for the company, their growth strategies, and their technology offerings for options traders.

Q: Victor IB Holdings received equity funding from a group of private investors and financial industry veterans. What will this new infusion of funding do for the company?

A: Well, for some background, the company started last year on the premise that introducing brokers are needed for an under-served community – hedge funds with between $10 million and $250 million in assets under management that are generally able to offer their own in-house trading tools, but lack access to enterprise level risk management. We saw a lot of mid-level hedge funds that didn’t have access to portfolio management tools like stress tests and professional margin calculators, which larger hedge funds do have access to. So, through our purchase of a suite of intellectual property from the Gargoyle group, we are offering small and mid-sized hedge funds access to a professional suite of risk management tools for the first time.

The capital part of this infusion will help us finish the transition of the intellectual property we acquired and focus on building a bigger team on the broker-dealer side. We are actively growing our sales team, having already made hires since our closing of investment capital.

Our management team is already in place. This is a different investment model from previous ventures I have been involved with, inasmuch as the R&D has already been completed through the acquisition of Gargoyle’s intellectual property and already has a team in place of people who have successfully built similar businesses.

For the rest of the interview and deeper coverage of the options sector, visit the JLN Options website at http://www.jlnoptions.com/

MarketsWiki

MarketsWiki Page of the Day
William P. Janulis
http://jlne.ws/NhgADm

++++

MarketsWiki Recent Updates

People

Ed Chambliss; James H. Gellert; William P. Janulis; Rosemary Hollinger

Companies, Organizations and Groups

Hong Kong Mercantile Exchange; Rapid Ratings International; PFGBEST.com; Integral Development Corp.

Products

HKMEx USD Silver Futures; HKMEx USD Gold Futures; SFO Magazine

Miscellaneous

Five Minutes; Five Minutes with Rob Newhouse; Rare earth metals

Statistics

25,985,455 pages viewed, 6,946 articles, 144,247 edits
MarketsWiki Statistics

Lead Stories

Fall of Peregrine’s Wasendorf Presaged in Christmas Toast
By Matthew Leising and Anastasia Ustinova – Bloomberg
Peregrine Financial Group Inc. employees gathered for their annual holiday party at the River East Art Center, overlooking the Chicago River. After enjoying appetizers and an open bar, they heard the kind of somber note you don’t expect from the boss at such a fete: even businesses that get off to a good start aren’t guaranteed to last.
http://jlne.ws/ObOAzy

Canada’s TMX in Talks to Buy Direct Edge – Sources
By Ben Dummett and Jacob Bunge – Dow Jones
TMX Group Inc., Canada’s top exchange operator, is in talks to acquire U.S. stock-market operator Direct Edge Holdings LLC, according to people familiar with the matter.
http://jlne.ws/ObOzvv

LSE and Singapore set to cross-trade
By Jeremy Grant in Singapore – Financial Times
The London Stock Exchange on Wednesday said it would launch an “international board” as part of a preliminary agreement with the Singapore Exchange (SGX) to offer trading in each other’s blue-chip stocks.
http://jlne.ws/ObOx6W

CFTC Said Poised to Adopt Client-Fund Safeguards After MF Global
Bloomberg
The U.S. Commodity Futures Trading Commission is poised to adopt client-fund safeguards to require more reporting of transfers after the collapse of MF Global Holdings Ltd. and shortfall claims against Peregrine Financial Group Inc., said two people briefed on the matter.
http://jlne.ws/ObOxnc

Canadian exchange deal wins final clearance
Reuters via Yahoo! News
The C$3.8 billion acquisition of Canada’s TMX Group cleared its final regulatory hurdles on Wednesday, allowing a financial consortium to take control of all of the country’s major securities exchanges and related businesses.
http://jlne.ws/ObOzLO

Citi Provides Transparency on Customer Derivatives
By Katy Burne – WSJ
Citigroup Inc. (D) said Wednesday it has launched a web tool giving its customers detailed information about their derivatives accounts at the company, lifting the veil on how its broker-dealer safeguards customer money at a time when nerves are frayed by allegations of missing money in the futures-trading industry.
http://jlne.ws/ObOzLS

NY Fed to release Libor documents Friday, official says
Reuters via Yahoo! Finance
REUTERS – The Federal Reserve Bank of New York will release on Friday documents showing it took “prompt action” four years ago to highlight problems with the benchmark interest rate known as Libor and to press for reform, an official at the regional U.S. central bank said on Wednesday.
http://jlne.ws/ObOzM2

U.S. states look to enter Libor manipulation case
Reuters via Yahoo! News
WASHINGTON – State attorneys general are jumping into the widening scandal over whether banks tried to manipulate benchmark international lending rates, a move that could open a new front against the top global banks.
http://jlne.ws/ObOA2k

Factbox: Banks drawn into Libor rate-fixing scandal
Reuters via Yahoo! News
More than a dozen banks are under investigation by authorities in Europe, Japan and the United States over the suspected rigging of the London interbank offered rate, a key interest rate used in contracts worth trillions of dollars globally. Some 16 banks contributed to the setting of dollar Libor rates in 2008, the period at the center of investigations.
http://jlne.ws/ObOxDO

Chicago Board of Trade hits back against grain traders’ lawsuit
Reuters via Yahoo! News
The Chicago Board of Trade on Wednesday criticized a group of floor traders for suing the exchange over new rules for settling end-of-day grain prices instead of raising their concerns with federal regulators.
http://jlne.ws/ObOxDS

PFGBest Collapse

Peregrine case focuses on Wasendorf Snr
By Gregory Meyer, Kara Scannell and Arash Massoudi in New York – Financial Times
The owner of Peregrine Financial Group may have deceived company officials including his own son as he made up false bank statements to hide a $200m gap in customer accounts, people familiar with the investigation into the shortfall said.
http://jlne.ws/ObOA2z

CME to Make Farmer Insurance Fund Available to Peregrine Clients
By Jacob Bunge – Dow Jones
CME Group Inc. (CME) said Wednesday that family farmers and ranchers with assets caught up in the collapse of brokerage Peregrine Financial Group Inc. will be eligible to draw upon an insurance fund set up in the wake of the futures industry’s previous big scandal.
http://jlne.ws/ObOA2B

Peregrine Futures Clients Aren’t Protected by SIPC, Chief Says
By Bill Rochelle and Andrew Harris – Bloomberg
Peregrine Financial Group Inc. futures customers won’t have their losses covered by the Securities Investor Protection Corp. even if they were defrauded, the fund’s chief said.
http://jlne.ws/ObOxDX

Exclusive: U.S. probing failed broker PFGBest’s use of small auditor
Reuters via Yahoo! News
U.S. futures industry investigators are looking into why Iowa-based collapsed brokerage PFGBest used a tiny accounting firm that appears to be operating from inside a suburban Chicago home to audit its books, according to a person familiar with the matter.
http://jlne.ws/ObOAiV

U.S. Bank Draws Scrutiny in Peregrine CEO’s Alleged Fraud -Source
By Jacob Bunge and Matthias Rieker – Dow Jones
U.S. Bank is being examined by investigators in relation to its role in overseeing client funds allegedly misappropriated by Peregrine Financial Group Inc., according to a person familiar with the matter.
http://jlne.ws/ObOAj0

Business Woes, Erratic Moves Dogged Stricken Executive
BY JOSH DAWSEY, IANTHE JEANNE DUGAN AND MICHAEL ROTHFELD – WSJ
Friends of Peregrine Financial Group Inc. founder Russell Wasendorf Sr. were looking forward to his wedding Aug. 4 in Cedar Falls, Iowa. But this week, they learned that Mr. Wasendorf had quietly gotten married two weeks ago at the Bellagio Chapel in Las Vegas. It is one of many mysteries involving the 64-year-old futures-industry veteran, who attempted suicide Monday, triggering the collapse of his commodity-brokerage firm and an investigation into $215 million of allegedly missing client money.
http://jlne.ws/ObOAzp

Vegas marriage deepens PFGBest mystery as Iowa brokers pack
By P.J. Huffstutter – Reuters
Employees emptied their desks as a local charity collected food from the cafeteria of failed broker PFGBest’s Iowa offices on Wednesday, most still seeking answers to the expanding scandal that has shaken the industry. Two days after the attempted suicide of founder and chairman Russell Wasendorf Sr, regulators are piecing together the alleged fraud that caused more than $200 million of the broker’s client funds to vanish — and the cover-up that hid the fact the money was missing for more than two years.
http://jlne.ws/ObOAzF

Peregrine’s Fall Said to Be Tied to Electronic Reporting Shift
By Matthew Leising and Dakin Campbell – Bloomberg
A switch to electronic regulatory filings prompted by the failure of MF Global Holdings Ltd. may have exposed an alleged $220 million shortfall of customer money at Peregrine Financial Group Inc. that prompted the attempted suicide of its founder.
http://jlne.ws/ObOyaO

U.S. grain trade wants answers in PFGBest broker scandal
Reuters via Yahoo! News
The largest U.S. grain trade group was stunned by the latest scandal to hit the futures industry when Iowa-based brokerage PFGBest collapsed after regulators accused the firm of misappropriating customer funds.
http://jlne.ws/ObOAQ5

FIA: Industry ‘Outraged’ Regarding Reports Of Missing Funds at PFGBest
Debbie Carlson – Kitco News
The futures industry is “outraged” regarding reports of missing funds at now-bankrupt futures brokerage Peregrine Financial Group, said a futures industry advocacy group on Wednesday. The Futures Industry Association said the industry as a whole is “outraged at what appears to be an extensive fraud carried out on futures customers of this firm and is appalled that customers may be victims of this deceit. Any violations of the law should be vigorously pursued and prosecuted.”
http://jlne.ws/ObOyrl

Peregrine clients angry about alleged shortfall
Lynne Marek – Crain’s
Chicago commodity trading firms with client accounts at Peregrine Financial Group Inc. reacted with frustration and anger this week over news of a possible shortfall in customer funds at the futures commission merchant and brokerage, which filed for bankruptcy Tuesday evening.
http://jlne.ws/M2uaNf

Don’t Blink, or You’ll Miss Another Shameful Scandal
By Christopher Barker | Motley Fool
With the rate at which horrifying examples of widespread moral bankruptcy and fraudulent misdeeds are coming to light in the financial industry today, one can scarcely afford a moment’s rest for fear of missing the dastardly disgrace du jour.
http://jlne.ws/ObOyrs

Regulatory

Will regulators get it right on the Volcker Rule?
Washington Post
The limits of regulation are well known to Gary Gensler. As a core member of President Bill Clinton’s Treasury Department, Gensler, with his colleagues, leapt to transform the financial markets through new legislation, in the wake of an Asian currency crisis that threatened the global financial system. Years later, they realized they had made some flawed assumptions.
http://jlne.ws/ObOB6B

New FINRA rule seen as weakening brokerage defenses
Reuters via Yahoo! Finance
A new securities industry rule that strengthens protections for investors could have a serious downside for the brokerages that advise them: fewer defenses in an arbitration.
http://jlne.ws/ObOB6C

SEC approves high-frequency trade audits
Market Watch
The Securities and Exchange Commission on Wednesday narrowly approved a rule designed to give exchanges more information about high-frequency trades.
http://jlne.ws/ObOBmW

SEC Approves New Rule Requiring Consolidated Audit Trail To Monitor And Analyze Trading Activity
The Securities and Exchange Commission today voted to require the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) to establish a market-wide consolidated audit trail that will significantly enhance regulators’ ability to monitor and analyze trading activity.
http://jlne.ws/ObOyHU

[SEC] Opening Remarks Regarding the Adoption of Final Rules for the Consolidated Audit Trail; Commissioner Elisse B. Walter
http://jlne.ws/ObOyYh

[SEC] “Smart Regulation: Keeping the Door Open for Effective Ideas”; Commissioner Luis A. Aguilar
http://jlne.ws/ObOyYs

[SEC] Statement at SEC Open Meeting: Consolidated Audit Trail; Commissioner Daniel M. Gallagher
http://jlne.ws/ObOEza

FINRA Statement on Consolidated Audit Trail
http://jlne.ws/ObOBU5

[Video] CFTC Commissioner O’Malia on Peregrine, Industry
Bloomberg
Scott O’Malia, a commissioner on the U.S. Commodity Futures Trading Commission, talks about its lawsuit against Peregrine Financial Group Inc. for an alleged $200 million “shortfall” in client funds, and the outlook for further regulation in the futures industry.
http://jlne.ws/ObOBU6

“That’s a Clown Question, Bro” – Statement Of Commissioner Bart Chilton At The CFTC Public Meeting On Dodd/Frank Rulemaking
http://jlne.ws/ObOBU7

At ten year anniversary of Sarbanes-Oxley corporate governance is stronger, audit quality is improved
The passage of The Sarbanes-Oxley Act (SOX) ten years ago dramatically transformed US financial reporting by improving audit quality and strengthening corporate governance.
http://jlne.ws/ObOEPK

Glass-Steagall: Not the Answer to Our Financial Woes
The Motley Fool
Pundits have been calling for the reinstatement of Glass-Steagall. Spoiler alert: It won’t help.
http://jlne.ws/ObOEPU

Shake-Up at New York Fed Is Said to Cloud View of Risk at JPMorgan
By JESSICA SILVER-GREENBERG and BEN PROTESS – NY Times
After the financial crisis, regulators vowed to overhaul supervision of the nation’s largest banks. As part of that effort, the Federal Reserve Bank of New York in mid-2011 replaced virtually all of its roughly 40 examiners at JPMorgan Chase to bolster the team’s expertise and prevent regulators from forming cozy ties with executives, according to several current and former government officials who spoke on the condition of anonymity.
http://jlne.ws/ObOEPV

Katharina Pistor And Martin Hellwig Receive Max Planck Research Award – Excellent Research Focus On The Regulation Of International Financial Markets
http://jlne.ws/ObOCaC

ASIC proposals on winding up abandoned companies
http://jlne.ws/ObOCr9

Exchanges & Trading Facilities

London Stock Exchange and Singapore exchange sign cross quotation agreement
London Stock Exchange (LSE) today announces that it has signed a Memorandum of Understanding (the “Agreement”) with Singapore Exchange Limited (SGX) to allow the largest and most actively traded stocks on each exchange to be traded by their respective member firms.
http://jlne.ws/ObOF6m

BCSC publishes final recognition orders regarding Maple Group application
The British Columbia Securities Commission today published its final notice regarding the application by Maple Group Acquisition Corporation. The BCSC focused on the impact that Maple’s acquisition of the TMX Group Inc, and the Canadian Depository for Securities Limited and the CDS Clearing and Depository Services (jointly known as CDS) will have on the Canadian venture market.
http://jlne.ws/ObOCHy

Maple and TMX Group Obtain Recognition Orders From BCSC And ASC
http://jlne.ws/ObOFmH

NYSE Dims the Lights to Attract Trading
BusinessWeek
For the past decade, the New York Stock Exchange (NYX) has watched its share of trading volume slowly erode. While a lot of that volume simply vanished as individual investors pulled an estimated $300 billion out of U.S. equity mutual funds since 2009, plenty of it was grabbed by upstart competitors: Public exchanges Direct Edge and BATS, launched in 2005 and 2006, respectively, now account for a combined 17 percent of all equity trading volume in the U.S. Today the NYSE handles about 22 percent, down from around 80 percent in the late 1990s.
http://jlne.ws/ObOFmP

TMX Select celebrates its First Anniversary
TMX Group Inc. is pleased to announce that TMX Select, TMX Group’s alternative trading system, is celebrating its first anniversary today. “We are proud to celebrate this significant milestone,” said Gary Knight, Vice President, Trading, TSX Markets and CEO of TMX Select. “TMX Select offers unique trading features and we’re pleased that over the past year our customers have benefitted from the choice our marketplace provides.”
http://jlne.ws/ObOFDd

Trading volumes decline on NYSE-run exchanges
Associated Press via Yahoo! News
Fewer shares of stock and derivatives were traded on NYSE Euronext’s exchanges last month, the investment exchange operator said Wednesday.
http://jlne.ws/ObOCYg

FESE European Equity Market Report – June 2012 Figures
http://jlne.ws/ObODeD

NYSE MKT Issues Short Interest Report
http://jlne.ws/ObODv7

NYSE Group Inc. Issues Short Interest Report
http://jlne.ws/ObOFTT

NASDAQ Announces End-Of-Month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date June 29, 2012
http://jlne.ws/ObODLz

TMX Group: The MiG Report June 2012
http://jlne.ws/ObODLH

Borsa Italliana Monthly Update – June 2012
http://jlne.ws/ObODLQ

Hedge Funds & Managed Futures

Pension funds up investment in commodity assets
Reuters via Yahoo! News
Pension funds are stepping up investments in commodity assets such as farms, timberland, mines and energy projects as they seek to diversify portfolios away from equities, an official at consultant Mercer said.
http://jlne.ws/ObOGan

Two And Twenty And Zero To Show For It As Hedge Funds Underperform The Stock Market
Zero Hedge
With AAPL and several other strange-attracting hedge fund hotels dominating the holdings of the 2-and-20′ers, we thought it timely that Bloomberg TV would point out today that their aggregate hedge fund index is now significantly underperforming the S&P 500.
http://jlne.ws/ObOE2i

Amid SEC Charges, Hedge Fund Manager Phil Falcone Attempts Audacious IPO
Forbes
Phil Falcone will become chairman of a publicly-traded company while facing securities fraud charges from the SEC
http://jlne.ws/ObOGqT

Thomson Reuters Welcomes The European Commission’s Second Market Test
Thomson Reuters welcomes the decision by the European Commission to move ahead with a formal market test of its revised proposal to extend usage rights of its Reuters Instrument Codes (RICs) in relation to the real-time consolidated feed space.
http://jlne.ws/ObOGr0

Minutes Of The Federal Open Market Committee, June 19-20, 2012
http://jlne.ws/ObOGHj

Invesco Ltd. Announces June 30, 2012 Assets Under Management
Invesco Ltd. today reported preliminary month-end assets under management of $646.6 billion, an increase of 2.3% month over month.
http://jlne.ws/ObOGHs

Banks & Brokers

ICAP steps up cost cuts to counter broking slowdown
By Luke Jeffs – Reuters
ICAP Plc has brought forward plans to slash 50 million pounds ($77.5 million) of annual costs to counter a trading slowdown that forced the brokerage’s revenue down 9 per cent in the last quarter.
http://jlne.ws/ObOGXL

ICAP chief distances broker from Libor scandal
Reuters via Yahoo! News
ICAP chief executive Michael Spencer sought to reassure investors that his broking firm was not involved in the interest rate-fixing scandal engulfing the world’s top banks, despite having suspended two of its employees.
http://jlne.ws/ObOHuQ

Libor price fixing case is getting work for lawyers
Reuters via Yahoo! News
More than a dozen current and former employees of several large banks under investigation for allegedly trying to manipulate benchmark interest rates have hired defence lawyers over the past year, according to people familiar with the matter.
http://jlne.ws/ObOGXT

Clients of Swiss Bank Raided in Tax Probe
BY DAVID CRAWFORD AND LAURA SAUNDERS – WSJ
German tax inspectors in recent weeks have been raiding the homes of Credit Suisse Group AG clients suspected of evading taxes, according to bank and German government officials. The investigation is centering on about 5,000 clients who between 2005 and 2009 allegedly bought insurance policies at a Bermuda-based subsidiary of the Swiss bank.
http://jlne.ws/ObOGXY

JPMorgan Chase Goes Live With ISO 20022 Income Announcements
http://jlne.ws/ObOJTq

Li Cui Joins Goldman Sachs as China Economist From RBS
Wall Street Journal Blogs
Goldman Sachs Group Inc. has hired Li Cui as its senior China economist based in Hong Kong, according to a memo seen by the Wall Street Journal.
http://jlne.ws/ObOHLA

JPMorgan bags analysts award
New York Post
She’s Jamie Dimon’s better half in the rough-and-tumble world of picking stocks. Noelle Grainger, who heads JPMorgan Chase’s superstar team of analysts, will be crowned Wall Street’s best analyst today, according to a new survey.
http://jlne.ws/ObOI1R

HSBC braced for $1bn US penalty
By Sharlene Goff, Retail Banking Correspondent – Financial Times
HSBC is to apologise to US lawmakers for failing to have appropriate controls in place to ensure it did not facilitate the financing of terrorism and other criminal activities, transgressions that analysts estimate may cost it up to $1bn in fines.
http://jlne.ws/ObOKa1

Many Regulators Put Their Attention on How JPMorgan Marketed Its Funds
New York Times
Authorities are responding to current and former JPMorgan financial advisers who said they had felt pressure to sell the bank’s products even when cheaper or better performing options were available.
http://jlne.ws/ObOI1V

Morgan Stanley Fires German Equity Trading Head Gegenwart
Bloomberg
Harald Gegenwart, Morgan Stanley ’s head of German equity trading, was among those dismissed as the lender cuts jobs amid a slowdown in Europe , according to two people with direct knowledge of the decision.
http://jlne.ws/ObOI1W

BofA shareholders may pursue lawsuit over MERS, mortgages
Reuters via Yahoo! News
A federal judge refused to dismiss a lawsuit accusing Bank of America Corp of misleading shareholders about its exposure to risky mortgage securities and its dependence on an electronic mortgage registry known as MERS.
http://jlne.ws/ObOI21

Clearing & Settlement

CME Clearing – Performance Bonds / Margins
Performance Bond Requirements: Natural Gas Outrights- Effective Wednesday, July 11, 2012
http://jlne.ws/ObOKqu

CME Group Clearing Advisory
NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (A) Effective Thursday, July 12, 2012
INDEXES & PRODUCTS

Technology

SunGard’s Valdi Now Supports RBS’s Global Futures and Options Business
SunGard and RBS Markets & International Banking, the UK-based investment bank, have collaborated to implement SunGard’s Valdi Trader Lite exchange traded derivatives trading workstation.
http://jlne.ws/ObOKqw

NYSE Technologies Expands Network to Equinix New York Data Center Campus
Business Wire via Yahoo! Finance
Equinix, Inc., a provider of global data center services, today announced that NYSE Technologies, the commercial technology unit of NYSE Euronext, will build and operate a SFTI Access Center at the Equinix NY5 data center in Secaucus, New Jersey.
http://jlne.ws/ObOIip

IMAGINE SOFTWARE LAUNCHES NEW FINANCIAL PLATFORM AND APP MARKETPLACE
Imagine Software, the leading provider of cloud-based portfolio and risk management solutions worldwide, today announced the general availability of the Imagine Financial Platform (IFP) and the Imagine Marketplace.
http://jlne.ws/ObOKH0

NASDAQ OMX Event-Driven Analytics Now Available At Carteret Datacenter
http://jlne.ws/ObOKH8

Princeton Financial Systems Signs Asian Fund Manager
http://jlne.ws/ObOIyS

Portware Completes Acquisition Of Aritas Technology Assets – Creates Industry’s First Algo Optimization Service Bureau Powered By Artificial Intelligence
http://jlne.ws/ObOIyX

U.S. Federal Financial Regulators Release Statement On Outsourced Cloud Computing
http://jlne.ws/ObOIz8

Equinix Boosts Data Center Investment In APAC – Completion Of Second Phase Of Hong Kong 2 Meets Ongoing Demand For Premium Data Center Services
http://jlne.ws/ObOIz9

Enforcement

CFTC Charges Houston-based Christopher Daley and his company, TC Credit Service, LLC, with Solicitation Fraud and Misappropriation in $1.4 Million Dollar Commodity Pool Scheme
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an anti-fraud enforcement action in the U.S. District Court for the Southern District of Texas, charging Christopher D. Daley (Daley) of Houston, Texas, and his firm, TC Credit Service, LLC (TCCS) (doing business as Del-Mair Group, LLC) with operating a commodity pool scheme that fraudulently solicited and accepted approximately $1.4 million from the public. Daley was owner and sole employee of TCCS, and none of the defendants has ever been registered with the CFTC.
http://jlne.ws/ObOIPo

ASIC obtains court orders against Queensland-based self-managed super advice companies
http://jlne.ws/ObOKXN

Environmental & Energy

Clean coal tech is ready, but there’s a catch
Politico
Climate-friendly coal faces a conundrum.
The federal government has funneled billions of dollars over the past two administrations into cutting carbon pollution from coal-fired power plants, but so far the “clean coal” dream is far from reality.
http://jlne.ws/O9tJwR

**RKB — CBO’s disappointing calculations issued last month are dusted off for this piece: CBO said the $6.9 billion provided by Congress to the Energy Department to demonstrate and reduce the cost of CCS has so far had little practical effect. Remedies advanced? Carbon tax, among other politically poisonous measures. And yet, business goes on. Read below.

Shell Gets Conditional Alberta Approval for Carbon-Capture Plan
Bloomberg
Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, received conditional approval from Alberta’s energy regulator for a carbon capture and storage project planned north of Edmonton.
http://jlne.ws/O9tJwR

The Case for (and Against) a Carbon Tax
National Review Online
Yoram Bauman and Shi-Ling Hsu are convinced that a “carbon tax swap,” in which revenue from a carbon tax is used to reduce taxes on individuals and firms, is an excellent idea.
http://jlne.ws/NplqwE

Asia-Pacific

Hong Kong regulators signal flexibility on derivative reforms
Reuters
Hong Kong’s financial watchdogs said on Wednesday that they planned to offer more flexibility in their proposed new rules for over-the-counter derivative trading.
http://jlne.ws/ObOIPu

Analysis: Latin America’s love affair with China may sour
Reuters via Yahoo! News
Latin America has developed a dangerous dependency on China as a voracious consumer of commodity exports and the region now faces a potential hit as the huge Asian economy cools.
http://jlne.ws/ObOIPv

SGX welcomes Neo Group to Catalist
http://jlne.ws/ObOLee

Hong Kong’s Regulators Release Consultation Conclusions, Supplemental Consultation On Proposals to Regulate OTC Derivatives Market
http://jlne.ws/ObOJ5U

Thai Bourse’s H1 Performance Reaches Goals
Average Daily Securities Trading Volume At THB 30.3 Bln In H1 – Derivatives Trading Volume At 43,768 Contracts/Day – To Launch New Trading Platform, ASEAN Link, In Q3
http://jlne.ws/ObOJ61

Hong Kong’s Securities And Futures Commission Revokes Licence Of Edmond Leung Chi Keung And Bans Him For 10 Years
http://jlne.ws/ObOLL7

Frontier Markets

India Gets Its Third Stock Exchange; MCX-SX To Be Functional In Couple Of Months
International Business Times
MCX Stock Exchange is all set to become India’s third full-fledged stock exchange as it got license from the Securities and Exchange Board of India to trade in new asset classes, including equities, futures and options and other products.
http://jlne.ws/ObOJ67

Egyptian Exchange Hosts NILEX 3rd Annual Day
http://jlne.ws/ObOLLh

Miscellaneous

Only Half of Americans Exceed Parents’ Wealth
By CATHERINE RAMPELL – NY Times
On Tuesday I wrote about the income and wealth distribution of today’s workers versus those of a generation earlier, based on a new report from the Pew Economic Mobility Project. In the report, Pew researchers also examined mobility trends within individual families: That is, regardless of what the generations as a whole look like, are today’s Americans better off than their own parents?
http://jlne.ws/ObOJmu