Industry news
Date: Mar 12, 2013
March 12, 2013: Japan approves first data warehouse; Pension funds struggle with asset allocation; SHFE Calls for Opening Commodities Futures to Overseas Traders
Regulators in Japan give DTCC a license to create a clearing data warehouse for OTC derivatives. Pension funds are struggling to find asset classes that seem likely to produce much of a return. Shanghai Futures Exchange’s chairman wants China to hurry up with opening its markets to more foreign participation.
First Read
Jill Sommers Reflects on the CFTC, Dodd-Frank, and Her Future
MarketsWiki.tv
Jill Sommers, Commissioner of the Commodity Futures Trading Commission (CFTC), is stepping down after the first quarter of this year. Sommers spoke with JLN editor-in-chief Jim Kharouf about the progress of Dodd-Frank, position limits, and what the future holds for the CFTC after her resignation.
Sommers discussed how the CFTC has changed over the last five years — including their increased budget and staff, moving from principles-based to rules-based rulemaking and their greatly increased public profile.
She also reflected on the Dodd-Frank rulemaking process, saying she wished the CFTC had defined swap-related terms first and delayed compliance with any rules until the rulemaking process was completed.
Sommers was sworn in as a CFTC commissioner on August 8, 2007 and served until April 13, 2009. President Barack Obama nominated her on July 20, 2009 to serve a five-year second term. Before becoming a CFTC commissioner, Sommers worked on several over-the-counter derivatives issues as policy director and head of government affairs for ISDA, as well as working closely with congressional staff drafting the Commodity Futures Modernization Act of 2000.
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In major policy shift, scores of FDIC settlements go unannounced
Los Angeles Times
Since the mortgage meltdown, the FDIC has opted to settle cases while helping banks avoid bad press, rather than trumpeting punitive actions as a deterrent to others. Three years ago, the Federal Deposit Insurance Corp. collected $54 million from Deutsche Bank in a settlement over unsound loans that contributed to a spectacular California bank failure.
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***JM: What could be dumber than SEC no-guilt cash settlements? How about no-guilt cash settlements done in a closet!
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Illinois settles SEC charges of misleading bond investors
Samantha Bomkamp and Rick Pearson – Chicago Tribune
The Securities and Exchange Commission on Monday charged the State of Illinois with securities fraud for allegedly misleading bond investors about pension fund obligations. [...] Illinois has settled the case, in which no fees or penalties were assessed.
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***JM: However, not to be outdone by the FDIC…
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Cinnober Financial Technology AB: DGCX’s New Trading Platform Goes Live
Dubai Gold & Commodities Exchange today announced that its new trading platform, the EOS Trader Platform, has gone live. The activation of the EOS Trader Platform marks the completion of DGCX’s new technology infrastructure.
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Fidessa’s integrated Market Abuse Monitoring service now available in Europe
Fidessa group plc has today unveiled a new service that provides fully integrated market abuse monitoring for its European sell-side clients. Fidessa’s Market Abuse Monitor delivers fully automated surveillance and detection capabilities that flag behaviour likely to give rise to suspicions of insider dealing and market manipulation.
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Press Release from March 11, 2013 | Futures | R.J. O’Brien & Associates
R.J. O’Brien Hires Seasoned Veteran David Levy to Head Global Markets Desk for RJO (UK) Limited
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced that industry veteran David Levy has come on board as Head of the Global Markets Desk of the firm’s R.J. O’Brien (UK) Limited subsidiary.
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DealBook: Responding to Financial Crisis, Britain Overhauls Its Regulators
International Herald Tribune
Britain, unlike other economic powers, is responding to the financial crisis by creating two new agencies, one to oversee institutions and another to watch for market abuses.
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Central clearing splits the market
Lynn Strongin Dodds – Financial News
One of the key regulatory responses to the financial crisis has been the demand for over-the-counter derivative trades to clear through central counterparties to prevent losses in the event of a default. Talks have resurfaced in the securities lending industry over whether it should also move to a CCP model ahead of it possibly being imposed by regulators.
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Rising Pressures on Boards in 2013: 10th Annual Corporate Board Member/Spencer Stuart What Directors Think Survey
Corporate Board Member and global senior executive search firm Spencer Stuart today announced the results of the 10th annual What Directors Think survey, a comprehensive report on boardroom trends gleaned from the responses of U.S. corporate directors nationwide.
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What’s the Difference Between Gambling and Trading Again?
The Atlantic Wire via Yahoo! News
Bad news for gamblers: The shuttering of InTrade leaves you only the stock market, futures markets, casinos, and other predictive markets on which to blow your time, your money, or both. Assuming, of course, that you understand the difference between all of those things. If you don’t, we’re here to help.
jlne.ws/14RnZko
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Work-life balance is not just for women
Andrew Hill – FT.com
The debate about “work-life balance” will generate contributions weightier than Erin Callan’s short article in last weekend’s New York Times, but few will be sadder.
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***JM: Yep.
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Lead Stories
Japan approves first data warehouse
Philip Stafford – FT.com
Japanese regulators have approved plans for the country’s first data warehouse for over-the-counter derivatives by granting a licence to Depository Trust & Clearing Corporation, the US post-trade group.
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Pension funds struggle with asset allocation
Maha Khan Phillips – Financial News
It is a difficult time to be a pension fund manager. Few asset classes are generating strong performance, complicating asset allocation decisions to the point of paralysing investors.
jlne.ws/14RnXJu
SHFE Calls for Opening Commodities Futures to Overseas Traders
Bloomberg
China should accelerate opening commodities futures to overseas investors and detail regulations allowing domestic firms to trade raw materials contracts on bourses abroad, Shanghai Futures Exchange Chairman Yang Maijun said in proposals to the National People’s Congress.
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Goldman leads decline as Wall Street commodity revenues plummet
David Sheppard | Reuters
Wall Street commodity revenues crashed last year to their lowest on record, as tighter regulation and limited price swings squeezed the once dominant traders of Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley.
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Realities Behind Prosecuting Big Banks
ANDREW ROSS SORKIN – NYTimes.com
Are banks too big to jail? If there was any doubt about the answer to that question, Eric H. Holder Jr., the nation’s attorney general, last week blurted out what we’ve all known to be true but few inside the Obama administration have said aloud: Yes, they are.
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Both Sides of SEC Nominee Face Heat
SCOTT PATTERSON and JESSICA HOLZER – WSJ.com
Lawmakers grilling Mary Jo White, President Barack Obama’s nominee for chairman of the Securities and Exchange Commission, on Tuesday will have to weigh two seemingly contradictory versions of the attorney.
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Broker Looks to Revive an Old Name
AARON LUCCHETTI – WSJ.com
It is a bull market for dead brokerage firms, too. Robertson Stephens & Co., a San Francisco firm that made its name pitching high-flying technology stocks during the 1990s but was shut down in 2002, is being resurrected by one of its former executives as a brokerage and wealth-management firm.
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High vaultage
Alice Ross and Claire Jones – FT.com
Traders of Japan’s currency became unusually fond of the Tokyo night air last year. Long after their colleagues had gone home, the traders left the grand investment houses that dominate the skyline of the Marunouchi financial district and strolled north for a block or two.
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Regulatory
SEC nominee White promises “unrelenting” enforcement
Reuters via Yahoo! News
By Sarah N. Lynch
Mary Jo White, the nominee to head the Securities and Exchange Commission, plans to tell lawmakers on Tuesday that she will bring a “bold and unrelenting” enforcement program to the agency if she is confirmed by the Senate.
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White on Hill, China Commodity Trades, CLOs: Compliance
Bloomberg
Mary Jo White, President Barack Obama’s nominee to lead the U.S. Securities and Exchange Commission, says the regulator needs a “sense of urgency” in overseeing markets dominated by high-speed trading.
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This is Iosco’s chance. It must be seized
Michelle Price – Financial News
The International Organization of Securities Commissions’ annual board meeting, at which the regulatory body’s mandate and decision-making mechanisms are debated, takes place later this month. It comes at a critical time in Iosco’s history.
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CFTC Announces that Mandatory Clearing Begins Today
Today, swap dealers, major swap participants and private funds active in the swaps market are required to begin clearing certain index credit default swaps (CDS) and interest rate swaps that they entered into on or after March 11, 2013.
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SIFMA Announces New White Paper: “The Evolving Role of Compliance”
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ESMA: Call For Candidates For The Position Of Chair Of The Committee Drafting A Proxy Advisor Industry Code Of Conduct
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Steven Maijoor, Chair Of The European Securities And Markets Authority (ESMA), Spoke On Shadow Banking At The 5th CDU/CSU Congress In Berlin On 11 March 2013
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Remarks To The IAA Investment Adviser Compliance Conference 2013 By Norm Champ, Director, Division Of Investment Management, U.S. Securities And Exchange Commission
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Exchanges & Trading Facilities
[CBOE] Rule Change Relating to Implementation of an Amended Equity Participation Entitlement Program
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[CBOE] Qualified Contingent Cross (QCC) Transactions
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NYSE MKT Issues Short Interest Report
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TSX Trading List Leaders by Volume and by Values – February 2013
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Instinet France – New Trading Member On The Vienna Stock Exchange
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Moscow Exchange: Start Of Additional Trading Session On March 14-15, 2013
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Moscow Exchange: Settlement Of Futures And Options In March 2013
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NASDAQ Announces End-of-Month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date February 28, 2013
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BM&FBOVESPA: Commodities/Options Exercise And Blocking
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TOM Insight February 2013
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Hedge Funds & Managed Futures
Man Fund-of-Hedge-Funds Unit Expects Best Return Since 2009
Bloomberg
Financial Risk Management Ltd., a unit of the world’s largest publicly traded hedge-fund manager Man Group Plc , may see the best return from its multistrategy funds of funds since 2009, said its chief investment officer.
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Hedge funds eye profits as Chinese regulator flexes M&A muscle
Reuters via Yahoo! Finance
LONDON – China’s antitrust regulator could become the new best friend of hedge funds seeking to profit from the unpredictability of the youngest of the world’s main watchdogs. The country’s Ministry of Commerce (MOFCOM) is becoming a key player in global mergers and acquisitions (M&A) as increasing activity brings more deals within its remit, such as Glencore’s takeover of miner Xstrata
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Billionaire Paulson Eyes Puerto Rico Tax Haven Move
CNBC
Billionaire John Paulson has explored abandoning his native New York for the tropics of Puerto Rico. The Financial Times reports.
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Norway: The New Yale?
The Wall Street Journal
Unless you’ve somehow kept your wealth a secret, your financial adviser has probably already urged you to “add alternatives” to your portfolio, or simply “invest like Yale.” But here’s a comeback to use next time this topic comes up: Tell the professional you’ve recently studied the Norway model—which will be true once you’ve finished reading this column.
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Numerix Stands-Out as the Market Leader in Celent’s Derivatives Pricing & Risk Analytics Vendor Review
Celent, the leading independent research firm and an Oliver Wyman company has recognized Numerix as the leading provider of cross-asset analytics for derivatives valuations and risk management driving today’s charge in the “Derivatives Market Industrial Evolution.”
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Banks & Brokers
The investment banks and their giant game of Jenga
William Wright – Financial News
No pressure or anything, but as you ponder whether to shut down your Asian cash equities business, close your European correlation trading desk, or pull out of the US securitisation market, are you absolutely sure that you’re not going to bring your entire investment bank crashing down around your ears?
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Online Bettor Intrade Halts Service, Cites Irregularities
David Fickling, Kevin Crowley & Joe Brennan – Bloomberg
Intrade, an online service that lets people bet with one another on events such as elections and the weather, ceased trading activity, saying it is investigating possible financial irregularities.
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Barclays Said to Quit Honduras Bond Sale as Lawsuit Emerges
Bloomberg
Barclays Plc quit as co-manager of Honduras’s first international bond sale after learning about a pending lawsuit that wasn’t initially included in a sales prospectus for the securities, according to three investors who were contacted directly by bankers arranging the deal.
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Merrill’s Zagury Quits As Head of Derivatives for High Net-Worth Clients
Dow Jones
Bank of America Corp.’s Raphael Zagury, a managing director in charge of the group that packages derivatives products for high-net-worth clients of Merrill Lynch, said Monday he is resigning, a source said.
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Changes To The UBS Board Of Directors – Reto Francioni To Be Nominated For Election To The UBS Board Of Directors At The Forthcoming Annual General Meeting. Wolfgang Mayrhuber Will Not Stand For Re-Election
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Financial Industry Addresses Alleged Large Bank Subsidy
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TD Ameritrade Named Best for Novices and Long-Term Investing
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Clearing & Settlement
PT Schroder Investment Management Adopts Omgeo Post-Trade Automation In Indonesia
Omgeo, the global standard for post-trade efficiency, today announced that PT Schroder Investment Management Indonesia is the first Indonesian asset manager to go live on Omgeo Central Trade Manager, Omgeo’s domestic and cross-border central matching service for equity, fixed income, exchange traded derivatives (futures and listed options) and contract for difference trades.
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BNP Paribas Securities Services Goes Live On Euroclear’s Global Collateral Highway
BNP Paribas Securities Services (BNP Paribas), a global custodian with over USD 7 trillion in assets under custody, and Euroclear Bank today announces the launch of their joint tri-party collateral management arrangements via Euroclear’s Collateral Highway. The initiative enables mutual clients to access securities held at BNP Paribas Securities Services as collateral for tri-party operations conducted by Euroclear Bank.
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DTCC Introduces Settlement Matching to Reduce Risk and Boost Intraday Settlement Finality
The Depository Trust & Clearing Corporation (DTCC) today released details on how its depository subsidiary, The Depository Trust Company (DTC), will introduce Settlement Matching, bringing significant enhancements to the settlement process and further reducing settlement risk.
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CME Group Clearing Advisory: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (A) Effective Tuesday, March 12, 2013
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Indexes & Products
Quarterly Changes To The NASDAQ Golden Dragon China Index
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Annual Changes To The NASDAQ Internet Index
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Semi-Annual Changes To The NASDAQ Technology Dividend Index
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Quarterly Changes To The NASDAQ Q-50 Index
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Annual Changes To The NASDAQ OMX Global Technology Index
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Semi-Annual Changes To The NASDAQ Clean Edge Green Energy Index
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Annual Changes to the NASDAQ OMX China Technology Index
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Technology
SunGard Selects J.P. Morgan Clearing Corp. to Add Access to Centralized Custody and Settlement Capabilities for Short-Term Cash Management
SunGard is adding the ability for customers of its SGN Short-Term Cash Management multi-fund cash investment solution to access centralized custody and settlement services through J.P. Morgan Clearing Corp. The combination of SGN and J.P. Morgan capabilities will help provide cash investors with cost savings and operational efficiencies by accessing multiple fund providers through a single connection.
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Broadridge Brings New Sales Talent to Support Expanding Asia Pacific Presence
Broadridge Financial Solutions , Inc. today announced the appointment of James Drumm to the role of Senior Director, Strategic Account Sales for Asia Pacific. Mr. Drumm will be responsible for generating new business sales for a range of Broadridge solutions in the Asia Pacific region, including its leading multi-asset, multi-currency processing solution, Gloss.
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Enforcement
SEC Charges New York-Based Private Equity Fund Advisers with Misleading Investors about Valuation and Performance
The Securities and Exchange Commission today charged two investment advisers at Oppenheimer & Co. with misleading investors about the valuation policies and performance of a private equity fund they manage.
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SEC Charges Illinois for Misleading Pension Disclosures
The Securities and Exchange Commission today charged the State of Illinois with securities fraud for misleading municipal bond investors about the state’s approach to funding its pension obligations.
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SEC Charges Private Equity Firm, Former Executive, and Consultant for Improperly Soliciting Investments
The Securities and Exchange Commission today announced charges against New York-based private equity firm Ranieri Partners, a former senior executive, and an unregistered broker who violated securities laws when soliciting more than $500 million in capital commitments for private funds managed by the firm.
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CFTC: Federal Court In New York Orders Madison Dean, Inc. And Its Principal, George Athanasatos, To Pay Over $1.4 Million To Settle Forex Fraud Charges In CFTC Enforcement Action
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Oppenheimer Settles S.E.C.’s Accusations It Misled Investors
PETER LATTMAN – NYTimes.com
Oppenheimer & Company will pay nearly $3 million to settle accusations by federal and state regulators that it misled investors about the performance of one of its private equity funds, in a case that signals stepped-up scrutiny of the buyout industry and how it values its holdings.
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Ex-Trader Seeks to Overturn Sentence, Conviction
CHAD BRAY – WSJ.com
A group of federal appeals court judges showed little sympathy Monday for a former hedge-fund trader who claimed he was being punished with a lengthy sentence because he refused to plead guilty in a closely watched insider-trading case.
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New Zealand’s Financial Markets Authority: Home Detention For National Finance Director
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Environmental & Energy
Japan May Revive Carbon Trading Discussion After Election
Bloomberg
The Japanese government may revive discussions about a carbon market that would reduce pollution levels after elections for the Upper House of parliament due in July, a government adviser said.
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Climate Change Is the Biggest Threat in the Pacific, Says Top U.S. Admiral
Wired
North Korea just annulled the 1953 armistice ending its war with South Korea. China and Japan are locked in a dispute over an island chain. But the greatest long-term threat to the peace of East Asia and Pacific Ocean — the part of the world at the heart of the Obama administration’s aspirational defense strategy — is climate change, according to the admiral in charge of U.S. military operations there.
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Climate Change: Even Worse Than We Feared
National Journal
Back in 1999 Penn State climate scientist Michael Mann released the climate change movement’s most potent symbol: The “hockey stick,” a line graph of global temperature over the last 1,500 years that shows an unmistakable, massive uptick in the twentieth century when humans began to dump large amounts of greenhouse gases into the atmosphere. It’s among the most compelling bits of proof out there that human beings are behind global warming, and as such has become a target on Mann’s back for climate denialists looking to draw a bead on scientists.
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Asia-Pacific
Mrs Watanabe comes out of hiding
Ben McLannahan and Alice Ross – FT.com
Welcome back, Mrs Watanabe. The mythical keeper of Japan’s household savings has spent a long time in retreat, selling a net Y3.6tn of foreign securities over the past 18 months amid a strong yen and weak overseas prospects.
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Taiwan Stock Exchange To Showcase Industry Champions At The Biggest Investment Conference For The Year
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Thai Bourse Launches Campaign To Attract First-Time Investors
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RTS at FOW Derivatives World Asia 2013
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Hong Kong’s Securities and Futures Commission Bans Calvin Ho Kei Him For 14 Months
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Frontier Markets
London to bolster Islamic finance credentials
Robin Wigglesworth in London – FT.com
The UK government has set up an “Islamic finance task force” to reinforce London’s position as the dominant western hub for this niche but fast-growing part of the financial system.
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Dubai’s $20bn debt wall looms large
Farah Khalique – Financial News
The time is fast approaching for Dubai to pay back its $20bn bailout from the financial crisis to its Abu Dhabi lenders and it needs to find an “amicable solution”, rating agency Moody’s warned in a note published yesterday.
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Lahore Stock Exchange Becomes The First Exchange In Pakistan To Lauch SMS Trade Alerts To Facilitate The Investors
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Dubai Mercantile Exchange February Performance
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Miscellaneous
After Lehman, Callan Speaks Out on a Proper Work-Life Balance
By WILLIAM ALDEN – NYTimes.com
Erin Callan, former chief financial officer of Lehman Brothers, has kept mostly to herself after leaving Wall Street during the financial crisis. But she is back in public view, with an opinion essay in The New York Times on Sunday about managing the demands of a high-intensity job.
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