Industry News

Industry news

Date: Jan 31, 2013

January 31, 2013 – CFTC Staff to Host Public Roundtable to Discuss the “Futurization of Swaps”, Japan bourse boosted by ‘Abenomics’, MF Global accord, once thought unlikely, goes before U.S. judge

The Commodity Futures Trading Commission (CFTC) today announced that staff will hold a public roundtable on January 31, 2013, from 9:30 a.m. to 3:15 p.m., to discuss the “futurization” of the swaps market. The Financial Services Authority (FSA) has confirmed that Barclays, HSBC, Lloyds and RBS will start the full review of their sales of interest rate hedging products (IRHPs) to small businesses. Japan Exchange joined the likes of Canon and Hino Motors in raising profit forecasts on Wednesday, citing the prospect of “Abenomics” policies driving trading volumes higher in the world’s second-largest equity market.

FIRST READ

New Restoring Customer Confidence Video
The ninth video in our Restoring Customer Confidence series deals with securing segregated funds. Each week we will post a new idea answering the question – how do you restore customer confidence and bring traders back?

Restoring Customer Confidence

More ideas»

Customer Segregation: Keep It Separate
MarketsWiki.tv

There has been much talk about protecting customer funds but keeping them in segregated accounts outside of the brokerage house. John Omahen, vice president of post trade derivatives solutions at SunGard, talks about the value in moving customer funds to a clearing house. Such segregation could help not only protect customer funds, but also could create lower financing costs.

Watch the video »

Also see — Customer Segregation: A Clear View

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About the Restoring Customer Confidence video series
In the aftermath of the MF Global collapse, fraud at Peregrine Financial Group and high profile high-frequency trading shocks, John Lothian News asks – how do you restore customer confidence and bring traders back? Previous videos:

Visit the video series page on MarketsWiki.tv over the next several weeks for new ideas and solutions.

CBOE Risk Management Conference, March 3 to 5

29th Annual CBOE Risk Management Conference
Sunday, March 3 through Tuesday, March 5, 2013
Park Hyatt Aviara Resort, Golf and Spa
Carlsbad, CA

Hosted by the CBOE and CBOE Futures Exchange, the 29th Annual Risk Management Conference is the foremost educational conference on the use of equity derivatives and volatility products to increase returns and manage risks. The conference provides an ideal setting for institutional users and prospective users of exchange-traded derivatives to network with their peers, exchange ideas and learn the latest about new trading products and risk management strategies. Session topics are current and relevant and speakers are selected for their expertise and ability to communicate complex material in a straightforward, understandable manner.

Whether you’re interested in learning the latest risk management techniques or simply mastering the fundamentals, the Risk Management Conference is a valuable opportunity to learn from some of the top traders and strategists.

For details and to register, visit www.cboeRMC.com or contact institutional@cboe.com.

***** CBOE holds a risk management conference on my birthday, how appropriate?

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Something About Tax Cuts Or Earnings Or Money Or Something In Recent Economic News
The Onion
http://jlne.ws/12av82j

***** A parody of all of us.

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A Full Service Moderator

I have returned from Miami, having missed the winter ice storm that hit Chicago last weekend to escape to warm, sunny Florida to attend the CMC 2013 State of the Industry Conference.

CMC, or Commodity Markets Council for long, asked me to come to Florida and pack my panel moderation skills. And so I did. I had the privilege of moderating the Monday afternoon panel discussion among international end users. It was a good panel discussion and maybe one of the best one I have done yet. A lot of that credit though goes to the panelists and I was blessed with excellent ones. Thank you to the CMC for having me and setting me up with such a great group.

I started the panel with an audience laugh as I helped a hotel worker remove the podium from the stage so people could see me in a newly placed chair on the stage. I told the audience I was a full-service moderator and received a good laugh.

I believe humor in a panel discussion is an important way to keep people engaged, so we were off to a good start.

I opened my comments by talking about an experience I had right before getting on the plane to come to Florida. I had attended church and my 17-year-old son Timothy was one of the speakers at a youth service. While Tim’s words were challenging and engaging, it was the announcement from one of the other speakers that caught my attention. Without an attribution, this young man told the story that 2012 was the best year in the history of the world.

The audience laughed at that statement. Of course, I did not have the source to back this up, but I said if that is the case, then that means our markets are working well. And that is a good thing.

The source of the claim by this young man was the magazine The Spectator. In the story, “Why 2012 was the best year ever,” the author tells that “never in the history of the world has there been less hunger, less disease and more prosperity.”

We live in a golden age, the article said.

I was glad I went to church on Sunday morning. I am glad I made it out of Chicago before the big storm. I am glad to have made it back to Chicago safely on Tuesday night, despite big storms across the Midwest and South that delayed my flight by 2 /12 hours. And I am hopeful for 2013 to be an even better year in more ways than 2012.

Lead Stories

CFTC Staff to Host Public Roundtable to Discuss the “Futurization of Swaps”
The Commodity Futures Trading Commission (CFTC) today announced that staff will hold a public roundtable on January 31, 2013, from 9:30 a.m. to 3:15 p.m., to discuss the “futurization” of the swaps market. The roundtable will consist of four panels, discussing 1) general industry views and concerns regarding the conversion of swaps to futures in each asset class; 2) clearing and different margin requirements for swaps and futures; 3) transaction-related matters including appropriate block rules for swaps and futures; and 4) the effect of the conversion of swaps to futures on end-users.
http://jlne.ws/U1OxQT

FSA confirms start of full review of interest rate swap mis-selling
The Financial Services Authority (FSA) has confirmed that Barclays, HSBC, Lloyds and RBS will start the full review of their sales of interest rate hedging products (IRHPs) to small businesses. In June last year, the FSA announced that it had found serious failings in the sale of IRHPs. Today’s announcement means that these banks have agreed to work on reviewing individual sales and providing redress to customers based on principles outlined in today’s FSA report, and overseen by independent reviewers.
http://jlne.ws/YGkv6z

Japan bourse boosted by ‘Abenomics’
By Ben McLannahan in Tokyo
Japan Exchange joined the likes of Canon and Hino Motors in raising profit forecasts on Wednesday, citing the prospect of “Abenomics” policies driving trading volumes higher in the world’s second-largest equity market.
http://jlne.ws/W1eVHD

Deutsche Bank Beats Capital Goal as Jain Shrugs Off Loss
http://bloom.bg/XU4unL

CFTC’s O’Malia calls for savvier technological surveillance
Automated Trader
http://jlne.ws/YlcKiL

MF Global accord, once thought unlikely, goes before U.S. judge
By Nick Brown – Reuters
A year ago, the bankruptcy of MF Global, the collapsed brokerage run by former New Jersey Governor Jon Corzine, seemed like it would be a long and messy affair involving plenty of courtroom drama around the world.
http://jlne.ws/VpVvu2

A Market-Cop Image May Be Challenged
SEC Nominee’s Views on Corporate Indictments, Whistleblowers May Draw Questions at Her Confirmation Hearings
By SCOTT PATTERSON and JESSICA HOLZER
WSJ.com
WASHINGTON—Mary Jo White, President Barack Obama’s pick to head the Securities and Exchange Commission, has argued against pursuing corporations in criminal courts and pushed, on behalf of corporate clients, for rules that could discourage corporate whistleblowers from coming forward.
http://jlne.ws/14tlDdg

U.S. Wants Peregrine’s Wasendorf Imprisoned for 50 Years
By Karen Gullo
Bloomberg
Russell Wasendorf Sr., the founder of now-bankrupt commodities firm Peregrine Financial Group Inc., should get 50 years in prison for stealing more than $215 million from customers, federal prosecutors will tell a judge.
http://jlne.ws/UG0Eku

Peregrine Financial ex-CEO expects life of fraud to end in jail
By Tom Polansek (Reuters)
Russell Wasendorf Sr., who admitted looting more than $100 million from futures broker Peregrine Financial Group, expects to die behind bars even if a judge ignores prosecutors and imposes a lenient sentence at a hearing on Thursday.
http://jlne.ws/VpVDtF

CME Retreat on Grain Hours Welcomed by Traders Who Need to Sleep
By Tony C. Dreibus & Jeff Wilson – Bloomberg
CME Group Inc. (CME), owner of the world’s largest grain market, is backing off an expansion of trading hours in May that left some traders complaining that 21 hours a day left them with little sleep and less liquidity.
http://jlne.ws/WAl133

Ex-Jefferies Arrest Shows Market Lacking Transparency
By Zeke Faux & Chris Dolmetsch
Bloomberg
Jesse Litvak, a former Jefferies & Co. mortgage-bond trader, is accused of cheating customers by using unscrupulous sales tactics that the U.S. Securities and Exchange Commission’s deputy director of enforcement called “unfit for a used car lot.” Such practices are widespread in a market lacking transparency, investors and regulators say.
http://jlne.ws/14tkrXt

REGULATORY

FSA launches pension annuity probe
An investigation into the £11bn annuity market has been launched by the City watchdog amid concerns British pensioners are getting a poor deal in exchange for their retirement savings.
http://jlne.ws/WAlKS1

Oxley Slams Dodd-Frank Whistleblower Program
By Samuel Rubenfeld
Former Rep. Michael Oxley (R., Ohio), author of the Sarbanes-Oxley Act of 2002, slammed a key provision of the Dodd-Frank Act on Wednesday, saying it encourages potential whistleblowers to pursue a “lottery” type payout.
http://jlne.ws/YGti8B

Traders Seek Harmonization in New Futures, Swaps Rules
By KATY BURNE – WSJ.com
A federal regulator is discussing new rules for large derivatives that traders say could determine which platforms are the winners and losers of financial-market overhaul.
The Commodity Futures Trading Commission recently began considering rules that could change what size energy futures can take place privately, away from exchanges, and what delay will be allowed in the public reporting of those trades.
http://jlne.ws/TfJpXT

Futures Industry Moves Forward with Enhanced Customer Protections
Joanne Morrison
Since the collapses of MF Global and Peregrine Financial, the futures industry has made significant progress to better protect customer funds with a series of actions that have led to better transparency and internal controls. Many of the recommendations are in line with initiatives recommended by an FIA task force early in 2012.
http://jlne.ws/XLJUFn

EU Lawmakers May Urge Veto of Swaps Rules on Business Concerns
By Jim Brunsden – Jan 30, 2013 11:31 AM CT
Bloomberg
European Union lawmakers may oppose draft rules for over-the-counter derivatives amid concerns that the measures would be too onerous for businesses and don’t respect existing EU law.
http://jlne.ws/11jDYuK

EXCHANGES

ISE Strengthens Focus on ETF and Index Development with Introduction of ISE ETF Ventures
NEW YORK, January 30, 2013 – The International Securities Exchange (ISE) today announced that its new product development group will now be known as ISE ETF Ventures. The new name reflects the group’s evolving focus and expanded capabilities in the ETF area. With ISE ETF Ventures, ISE has moved beyond its established expertise in index development to offer partner firms a full suite of capabilities to support the launch of new ETFs.
http://jlne.ws/XK2uh9

CME Group Inc. Declares Quarterly Dividend
CHICAGO, Jan. 30, 2013 /PRNewswire/ — CME Group, the world’s leading and most diverse derivatives marketplace, today declared a first-quarter dividend of $0.45 per share, payable March 25, 2013, to shareholders of record March 8, 2013.
http://jlne.ws/WhnyzP

Calculation of TOPIX and Other Indices in Relation to Equity Market Consolidation
http://jlne.ws/11ag3i9

Commodities 2013: implementation strategies using ETPs
In partnership with ETF Securities, SIX Swiss Exchange held the first ETF/ETP-Lunch of the current year.
http://jlne.ws/VpOvNR

Hedge Funds & Managed Futures

Mutual Funds vs. ETFs: Which Is Right for You?
Yahoo! Finance
http://jlne.ws/Vvr07T

BANKS & BROKERS

Barclays, RBS May Pay Billions Over Improper Derivatives Sales
http://bloom.bg/Xm7om9

Morgan Stanley Wealth Management Launches Perspectives in Philanthropy, Vol. 9, “Athletes and Entertainers Giving Back”
http://jlne.ws/XLBZHX

Knight Capital explores asset sale
By Arash Massoudi in New York
Knight Capital is exploring a sale of underperforming assets as the US electronic trading firm looks to dispose of certain units ahead of its planned takeover by rival Getco, people familiar have said.
http://jlne.ws/14ti07g

TD Ameritrade’s thinkorswim Named Best Options and Mobile Trading Platform
Investor’s Business Daily Investor Survey names thinkorswim #1 in multiple categories
OMAHA, Neb.–(BUSINESS WIRE)–More than 10,000 have spoken. TD Ameritrade Holding Corporation (NYSE: AMTD) today is pleased to announce that thinkorswim®, the active trader platform of its brokerage subsidiary TD Ameritrade, Inc. has been named one of the “Best Online Brokers” by Investor’s Business Daily in the publication’s Jan. 28, 2013 issue
http://jlne.ws/Xa76Np

Mizuho Quarterly Net Income Jumps on Lending, Trading Gains
By Shigeru Sato & Shingo Kawamoto
Bloomberg
http://jlne.ws/14tk2Eq

Deutsche Bank chiefs maintain course
By Daniel Schäfer and James Wilson – FT.com
Seven months after taking over from Josef Ackermann at the helm of Deutsche Bank, Anshu Jain and Jürgen Fitschen have been striving to show the differences they intend to make at Germany’s flagship lender.
http://jlne.ws/WDpi2N

TECHNOLOGY

SunGard to Announce Fourth Quarter and 2012 Results on February 7, 2013
SunGard announced today that it will release financial results for the fourth quarter ended December 31, 2012 and full year 2012 on the morning of Thursday, February 7, 2013, followed by a conference call at 9:00 a.m. (Eastern Time) to discuss the financial results.
http://jlne.ws/YGl2W6

smartTrade releases HTML5 user interfaces
Automated Trader
http://jlne.ws/WhsJQg

Progress Apama platform deployed by Chinese investment bank
Automated Trader
http://jlne.ws/XnqhoI

ENFORCEMENT

Australian Securities and Investments Commission – 13-014MR ASIC cancels AAA Shares Pty Ltd’s licence
http://jlne.ws/11jgpC4

Barclays, RBS May Pay Billions Over Improper Derivatives Sales
Barclays Plc, Royal Bank of Scotland Group Plc and Britain’s two other biggest banks may have to pay as much as 5 billion pounds ($7.92 billion) to compensate small businesses improperly sold interest-rate derivatives following a probe by the U.K. financial regulator.
http://jlne.ws/Vxvazw

ENVIRONMENTAL/ENERGY

Review of 2012: “Transparency in Energy Markets” continuously expanded and on track for REMIT
http://jlne.ws/W1868M

ICAP Energy appoints George Dranganoudis
London and Singapore, 31 January 2013 – ICAP plc (IAP.L), the world’s leading interdealer broker and provider of post trade risk and information services, today announces the appointment of George Dranganoudis as a Managing Director of ICAP Energy in Singapore, from 4 February, 2013.
http://jlne.ws/VpOdqn

Two-Time Insider Trader Roomy Khan Seeks to Avoid Prison
By Patricia Hurtado
Bloomberg
http://jlne.ws/XV2zPF

Helium Rises to Highest Since 1995 in Fallout From Shale Boom
By Jacob Adelman
Bloomberg
Helium prices in the U.S., the world’s biggest producer, are trading at the highest level since at least 1995 as the shale boom exacerbates a shortage of the gas used in everything from semiconductors to medical equipment.
http://jlne.ws/11lMbdc

ASIA

China’s latest investment craze: U.S. pecans
The Chinese are developing a thing for U.S. pecans.
Attracted by their perceived health benefits, the Chinese are gobbling up pecans from the United States in record amounts. Last year saw a staggering 64% jump in pecan exports to Hong Kong, according to the latest numbers from the Southern United States Trade Association.
http://jlne.ws/11jwUya

Rio Said to Consider Halt at Biggest Mongolia Copper Mine
http://bloom.bg/XiEPpC

The trading volume of Equity Options (Auction trading) reached a record high of 7,976 contracts
http://www.tse.or.jp/english/news/22/101201_a.html

FRONTIER

Russia Seen Beating Emerging Stock Gauge Third Month by Verno
Russia’s benchmark Micex Index (INDEXCF) will grow at a faster pace than other emerging markets for a third month as high dividends and low volatility lure investors.
http://jlne.ws/WU1LM5

MISCELLANEOUS

The Cotton Bond Bubble
By PHIL LEIGH
New York Times
It’s a story recognizable to anyone who dealt with toxic derivatives in the early 21st century: on Jan. 29, 1863, the Confederate Congress secretly authorized the Paris-based bankers at Erlanger et Cie. – which rivaled Rothschild for European royalty connections – to underwrite $15 million of Confederate bonds, denominated in British pounds or French francs.
http://jlne.ws/WhvMbh

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