Industry news

June 21, 2013: Derivatives industry lobby groups plan merger; CME Considers Soft Commodities Contracts as ICE Takes Over Liffe; U.S. Can’t Go It Alone on Derivatives

Industry lobby associations FIA and FOA plan to join forces. CME Group looks at the impending ICE-NYSE organization and considers the possibility of creating softs futures products. Michel Barnier in Europe has some suggestions for the US regulatory effort, and they don’t involve racing ahead of everyone else.

First Read

Futures Lobbyists in U.S., Europe Combine to Address Rules
Matthew Leising – Bloomberg
The futures industry lobbying organizations based in the U.S. and Europe are combining to address financial regulation on a global scale, the groups said in a statement. The Futures Industry Association, based in Washington, will merge with the London-based Futures & Options Association to create FIA Global, they said in a joint statement today.
jlne.ws/14NQjaG

***** This has been rumored about for a long time and now accomplished during the second year of Walt Lukken’s leadership of the FIA.

Derivatives industry lobby groups plan merger
Philip Stafford – FT.com
Two of the derivatives market’s most high profile trade associations are to merge amid growing industry concern over global issues such as cross-border regulation.
jlne.ws/14NQgM0

***** I wonder what we’ll be talking about at IDX next week.

FOA members need assurances on the creation of FIA Global
William Mitting – FOW
A merger between the FOA by the FIA has been in the pipeline for many years and the ambitious American organisation has longed eyed expansion into Europe. Now, amid rumours of threats by the FIA to set up a European chapter to rival the FOA, denied by the FOA, a deal has been formed that will see the FOA rebranded FIA Europe and sit in a confederation with the FIA and FIA Asia under an umbrella group, FIA Global, that will represent the organisations at a global level.
jlne.ws/14NQjaH

***** Oh my, the Yanks are coming, the Yanks are coming…..

FOA And FIA Announce Agreement To Combine Organisations Under Global Structure
Press Release
jlne.ws/14NQjaJ

***** There is still room for an intergalactic futures organization. How about IFO?

++++

Quantitative Brokers’ Robert Almgren Responds to Chicago Fed’s John McPartland’s White Paper
Robert Almgren
I would like to thank John McPartland for proposing what I think of as a “full employment act for quants.” As a quantitative analyst myself, I think that his proposals would provide an extremely rich set of opportunities for sophisticated traders to leverage their analytical capabilities to understand, better than other market participants, what is really happening in the market and how to profit from it. But as a market participant, I think that these proposals would complicate a trade match process whose main goals should be to be simple, robust, transparent, and predictable.
jlne.ws/10AWdN6

***** Let the debate continue.

++++

Mathew Gladstein, Options Guru With Merton, Scholes, Dies
Laurence Arnold – Bloomberg
Mathew L. Gladstein, a Wall Street executive who tapped the expertise of Robert Merton and Myron Scholes — future Nobel Prize-winners — in the 1970s to bring options trading to the masses, has died. He was 90.
jlne.ws/14NQjaL

***** I did not know Mr. Gladstein, but I would guess that he expired in the money.

++++

Commodities traders need to wake up to key-man risk
Javier Blas in Hong Kong – FT.com
The leadership changes in Louis Dreyfus Commodities and Bunge are a good reminder that chief executives do not stay forever – and a wake-up call for some big trading houses facing a “key-man risk”.
jlne.ws/14NQjr0

***** Jim Kharouf, who spoke at a WILD event last night, says we should use the term “key-person” risk.

++++

Morgan Stanley Said to Cut Commodities Jobs as Revenue Declines
Bloomberg
Morgan Stanley is cutting jobs in its commodities business, one of the three biggest on Wall Street, after Chief Executive Officer James Gorman said the unit’s revenue the past two quarters was among its worst in 18 years.
jlne.ws/14NQh2k

***** Less gold watches, less gold demand, bingo!

++++

Threats to Financial Markets Lurk in Dark Pools
Bloomberg
Regulators on two continents have noticed that too much trading in stocks takes place out of sight.
jlne.ws/14NQjr2

***** What you can’t see CAN hurt you.

++++

CME Group Raises Trading Margins on Gold Futures 25%
Dow Jones
Exchange operator CME Group Inc. raised the amount of collateral required to trade the benchmark gold futures contract on Thursday after a volatile day that saw gold prices slump to their lowest level in more than two years.
jlne.ws/14NQh2l

***** Youzzza!!!

++++

Kingdom’s bourse missing some magic
Anne Renzenbrink – Phnom Penh Post
At the headquarters of the Cambodia Securities Exchange on the 25th floor of Canadia Tower, something seems to be missing. Here, in Phnom Penh’s business heart, the sights typically associated with trading shares – gesticulating, shouting traders, the confusing hand signals, the buzz in the air as thoughts of money blanket the room – are nonexistent.
jlne.ws/13XzYiB

***** It helps to have things to trade.

++++

Crowdfunding And Predatory Capitalism: The Battle Lines Are Drawn
Ingenious Britain
Crowdfunding is no ordinary industry. It’s become clear that it has the power to re-make the economy in a new, more democratic, image. Less like the predatory capitalism of the last three decades. More open and collaborative. More conducive for entrepreneurs and the innovation we need to dig us out of the hole that predatory capitalism has put us all in.
jlne.ws/14NQjr4

++++

MarketsWiki

MarketsWiki Recent Updates

People

Peter J. Layton; John Goode; Kevin Kometer; Tim Merryman; D. Keith Campbell; Fred Schoenhut; Russell Levens

Companies, Organizations and Groups

CBOE Futures Exchange; Maven Wave Partners; Boston Options Exchange; Firm58; Commodity Floor Brokers and Traders Association

Miscellaneous

Prop trader

Statistics

40,878,625 pages viewed, 7,534 articles, 160,983 edits
MarketsWiki Statistics

Lead Stories

CME Considers Soft Commodities Contracts as ICE Takes Over Liffe
Nandini Sukumar & Isis Almeida – Bloomberg
CME Group Inc., the largest futures exchange, is considering new soft commodities contracts to compete with IntercontinentalExchange Inc (ICE). and NYSE Euronext Liffe, according to four people familiar with the situation.
jlne.ws/14NQjr5

***** NYMEX listed softs when ICE moved its softs futures to the screen. Let’s hope this effort works better.

U.S. Can’t Go It Alone on Derivatives
Michel Barnier – Bloomberg
Over the past five years, the European Union and the U.S. have developed separate, new regulatory regimes for derivatives, aimed at protecting our financial systems, economies and taxpayers from a repeat of the 2008 crisis. The next challenge is to use those reforms as the foundation for a single, global framework.
jlne.ws/14NQh2p

Gensler Sticks to Swaps Plan
JAMILA TRINDLE – WSJ.com
Commodity Futures Trading Commission Chairman Gary Gensler is holding fast to a plan to apply U.S. swaps rules to foreign-based banks in mid-July after a daylong meeting of international regulators failed to resolve differences, according to people familiar with the discussions.
jlne.ws/11CPvRW

Oracle to move listing to Big Board from Nasdaq in coup for NYSE
John McCrank – Reuters
Oracle Corp said on Thursday it was moving its stock listing to the New York Stock Exchange from Nasdaq OMX Group’s main U.S. exchange, a major coup for NYSE Euronext , as it lands the largest-ever U.S. market transfer.
jlne.ws/14NQjr6

Regulator in New York Sets Tough Bank Fine
JESSICA SILVER-GREENBERG and BEN PROTESS – NYTimes.com
It took just $8.6 million for Japan’s largest bank to settle with federal regulators in Washington who accused it of routing tainted money through the United States. A regulator in New York proved harder to satisfy. On Thursday, the state’s top financial authority, Benjamin M. Lawsky, imposed a $250 million fine on the Bank of Tokyo-Mitsubishi UFJ — nearly 30 times what the federal government extracted last year.
jlne.ws/14NQh2r

Bank Traders, Brokers Worked With Hayes on Libor
Lindsay Fortado – Bloomberg
Tom Hayes, the former UBS AG (UBSN) and Citigroup Inc. (C) trader, conspired with employees of at least five other banks and three interdealer brokers over a four-year period to manipulate yen Libor rates, prosecutors said.
jlne.ws/14NQjr9

Data Group Ends Peeks After Leaks
BRODY MULLINS and MICHAEL ROTHFELD – WSJ.com
A private-sector group that produces a leading consumer-confidence survey is suspending its practice of giving media organizations an early preview because it fears the information may be leaking to traders before the public.
jlne.ws/14NQh2v

Everybody Chill
Newsweek
Fed Chairman Ben Bernanke said the central bank might buy fewer bonds and raise rates—then the markets freaked out. But let’s get a reality check here, writes Daniel Gross.
jlne.ws/14NQjrc

Eurogroup Agrees on Rules for Bailout Fund
STEPHEN FIDLER, GABRIELE STEINHAUSER and CHRISTOPHER LAWTON – WSJ.com
Euro-zone finance ministers agreed on guidelines Thursday for how their bailout fund could directly shore up failing banks in the bloc’s weak economies.
jlne.ws/14NQjrf

News from Turkey

Germany blocks Turkey’s bid to join EU
Daniel Dombey in Istanbul, James Fontanella-Khan in Brussels and Quentin Peel in Berlin – FT.com
Germany has blocked the start of EU talks with Turkey in the wake of Ankara’s crackdown on mass demonstrations this month, a move some Turkish officials suggest could lead to an irreparable break with Brussels.
jlne.ws/14NQh2x

Erdogan criticizes Germany, France for blocking Turkey’s EU bid
European Dialogue
During a visit to Brussels to revive Ankara’s deadlocked EU accession talks, Turkish Premier Erdogan slammed Germany and France for opposing full EU membership for his predominantly Muslim country.
jlne.ws/14NQjHu

Regulatory

SEC’s White Having Trouble Filling Overseer Post
Dow Jones
Securities and Exchange Commission Chairman Mary Jo White is having difficulty finding an industry veteran or seasoned attorney to fill a top post overseeing trading firms and stock exchanges–a critical role for the agency given growing concerns about the speed and complexity of trading.
jlne.ws/14NQh2A

TMX Group Congratulates Louis Morisset and Mario Albert
TMX Group congratulates Louis Morisset on being named President and Chief Executive Officer of the Autorité des marches financiers (AMF). The company further extends its appreciation and congratulations to Mario Albert, who leaves the AMF to head Investissement Québec.
jlne.ws/14NQhiS

Bafin Starts Advisory Board for Consumer Protection
Bloomberg
German financial regulator Bafin established a committee to safeguard the rights of private investors, advancing its push to boost transparency and curtail financial markets.
jlne.ws/14NQjHB

Banks Charge Consumer Bureau Big Data Collection Breaks Law
Bloomberg
The U.S. Chamber of Commerce is accusing the Consumer Financial Protection Bureau of breaking the law in collecting detailed information on individual credit- card accounts.
jlne.ws/14NQjHC

New York’s Benjamin Lawsky Collects Scalps, Showing Regulators Can *Gasp* Regulate
Naked Capitalism
New York’s Superintendent of Financial Services, Benjamin Lawsky, has taken scored some significant wins from what would normally be a pretty disadvantaged spot.
jlne.ws/14NQhiW

ESMA Vacancy Notice — Policy Officer (Corporate Finance) — Deadline 31 July 2013
jlne.ws/14NQhiZ

Remarks To The 2013 Insured Retirement Institute Government, Legal & Regulatory Conference By Norm Champ, Director, Division Of Investment Management, U.S. Securities And Exchange Commission
jlne.ws/14NQhj0

Investor Relations In An Increasingly Regulated And International World – Speech By David Lawton, Director Of Markets, The Financial Conduct Authority, To The Investor Relations Society Annual Conference, On 18 June 2013
jlne.ws/14NQhj3

ASIC releases consolidated guidance on takeovers
jlne.ws/14NQhj4

Report of the Business Accounting Council on the use of the International Financial Reporting Standards (IFRS) in Japan
jlne.ws/14NQjHF

[Japan] Authorization of the Merger of Mizuho Corporate Bank, Ltd. and Mizuho Bank, Ltd. (June 21, 2013)
jlne.ws/14NQhj5

[Canada] Integrity in Public Contracts Act – Authorization for construction contracts over $10 million
jlne.ws/14NQjHH

[Austria] FMA publishes Circular on reporting and disclosure requirements for issuers
jlne.ws/14NQhj7

Exchanges & Trading Facilities

CME Group and BarclayHedge Honor Managed Futures Leaders – Jun 20, 2013
CME Group and BarclayHedge recognized managed futures industry leaders at the second annual Managed Futures Pinnacle Awards yesterday. The ceremony preceded MFA’s Forum 2013 in Chicago and was hosted by Fox Business Network Anchor Liz Claman and featured live entertainment by Comedian Jim Gaffigan.
jlne.ws/14NQjHJ

LME appoints Robin Paine as chief technology officer
Hedgeweek
The London Metal Exchange (LME) has appointed Robin Paine as chief technology officer. Paine was previously the head of solutions delivery at Old Mutual, where he led a global transformation initiative across the change and technology functions and was responsible for delivery of all programmes within the wealth management division.
jlne.ws/11RFY9h

Hong Kong Exchanges May List Cash-Settled Commodity Contracts
Bloomberg
Hong Kong Exchanges & Clearing Ltd. , the world’s second-largest bourse operator, said it plans to list commodity futures that are settled in cash.
jlne.ws/14NQhj9

Thomson Reuters Global Equities Monthly Market Share Data Updated To Reflect May 2013 Activity
The charts below show the traded value of all MTF operated Dark Pools and six of the leading broker crossing services equities recorded over the last 13 months. For the most recent month the break down for main venues is provided.
jlne.ws/14NQjHL

Oracle Corporation to Transfer Stock Listing to NYSE
jlne.ws/14NQhzm

Eris Exchange June 2013 Newsletter
100k Notional FAQs; Eris Markets Live on TT; Fee Incentive Programs; Market and Volume Updates; Sapient Webinar and Study
jlne.ws/14NQhzo

Program Trading Averaged 24.2 Percent of NYSE Volume during June 10-14
jlne.ws/14NQhzq

Tel Aviv Stock Exchange CEO Rings London Stock Exchange (LSE) Opening Bell
jlne.ws/14NQjY0

Hedge Funds & Managed Futures

Man names Jamie Douglas as CEO of Australian Business
Man Group plc, the leading alternative asset manager, today announced the appointment of Jamie Douglas as CEO of its Australian business, Man Investments Australia, effective 1 July 2013.
jlne.ws/14NQhzu

Hedge fund exits rise in June as investors reposition at mid-year
Reuters via Yahoo! Finance
Requests to pull money out of hedge funds rose in June as investors used the mid-year point to review their portfolios and release cash to spend elsewhere.
jlne.ws/14NQjY1

Brevan Emerging-Markets Fund Said to Cut Risk on Losses
Bloomberg
Brevan Howard Asset Management LLP’s $2.7 billion emerging-markets hedge fund sold positions and cut risk by more than half after it lost 11 percent this year amid a market rout, said two people with knowledge of the matter.
jlne.ws/14NQhzw

Gross’s Total Return Leads Bond Fund Losses as Fed Sparks Slump
Bloomberg
Bill Gross ’s $285 billion Pimco Total Return Fund is leading losses among the most-popular bond mutual funds after the Federal Reserve sparked a global selloff by indicating it may start reducing asset purchases.
jlne.ws/14NQjY3

Triton saved by fresh investments
Sarah Krouse – Financial News
Three UK pension schemes have invested nearly £200m in UBS Global Asset Management’s Triton Property Fund, making commitments that have “totally repositioned” the struggling fund and rescued it from liquidation, Financial News has learnt.
jlne.ws/14NQhzx

ADM seeks buyer for $2bn cocoa unit
Emiko Terazono in London – FT.com
Archer Daniels Midland, the global agricultural trading house, is looking to offload its $2bn cocoa and chocolate business, in the food industry’s latest M&A deal.
jlne.ws/14NQhzy

BlackRock Equity CIO Chris Leavy Takes Medical Leave
Morningstar via Yahoo! Finance
Paul Davis departs Charles Schwab Investment Management, a manager change at Ariel, and a foreign currency manager at JP Morgan exits.
jlne.ws/14NQjY4

Banks & Brokers

Morgan Stanley Said to Exit Energy in Three East Europe Nations
Bloomberg
Morgan Stanley will exit power and natural gas trading in Bulgaria, the Czech Republic and Poland as it scales back in commodities, a person with direct knowledge of the matter said.
jlne.ws/14NQhzz

Reform of British banking needs to go further
Martin Wolf – FT.com
The financial crisis has imposed economic and fiscal costs upon the British economy and public finances that rival those of a world war. This brutal fact must inform the response. It is why it has to be radical. Business as usual will not do because that could lead to national ruin. No industry can be allowed to operate in such a way. As Sir Mervyn King, outgoing Bank of England governor, noted this week: “It is not in our national interest to have banks that are too big to fail, too big to jail, or simply too big.”
jlne.ws/14NQjY5

‘Monstrous uncertainty’ hangs over Swiss banks
James Shotter in Zürich – FT.com
In 2009 the US extracted a $780m fine and thousands of client names from UBS for its role in helping Americans evade taxes. Since then Switzerland’s banks have been stuck under a cloud from which they have been desperate to escape.
jlne.ws/14NQhzA

Britain faces major obstacles to RBS break-up plan
Reuters via Yahoo! News
By Matt Scuffham LONDON – Britain would face big obstacles to a break up of state-controlled Royal Bank of Scotland and such a step might not achieve its ultimate aim of boosting lending to the economy, analysts and investors said.
jlne.ws/14NQjY7

Deutsche Bank adding 431 jobs in Cary
The News & Observer
Financial services giant Deutsche Bank plans to more than double the size of its software development center in Cary by adding 431 jobs by the end of 2016.
jlne.ws/14NQhzB

Citigroup Appoints Zdenek Turek as Its Western Europe Head
Bloomberg
Citigroup Inc. , the third-largest U.S. bank by assets, named Moscow-based Zdenek Turek as head of its Western Europe unit to replace James Cowles.
jlne.ws/14NQjYa

BofA names JPMorgan’s Zakkour co-head of global TMT banking
Providence Business News
Bank of America Corp. hired Anwar Zakkour from JPMorgan Chase & Co. as co-head of global telecommunications, media and technology investment banking, according to a memo obtained by Bloomberg.
jlne.ws/14NQhzE

Bank of America Names New Co-Heads of Technology and Media Banking
New York Times
Bank of America Merrill Lynch named new co-heads of its technology, media and telecommunications investment banking group on Wednesday. It poached one from JPMorgan Chase.
jlne.ws/14NQjYd

Jefferies quits as wholesale gilt market maker, moves into retail
Reuters
Jefferies International Limited has resigned as a wholesale gilt-edged market maker with effect from close of business on Wednesday, Britain’s Debt Management Office said.
jlne.ws/14NQhzF

Clearing & Settlement

DTCC Launches Insurance Tool To Track Mandated Producer Training Across States – Producer Management Portal Offers Centralized Service For Managing Producer Networks
The Depository Trust & Clearing Corporation’s Insurance & Retirement Services today announced the release of its latest service, Producer Management Portal. PMP is a comprehensive tool that enables insurance carriers and distributors to effectively share, track and verify state-mandated annuity training completions by their agents and brokers, known as producers.
jlne.ws/14NQjYe

CMEGroup – Clearing: Kansas City Board of Trade (KCB) Delivery Integration Plan Update & Processing Timeline
jlne.ws/14NQhPS

CMEGroup – Clearing: FX Volatility Quoted Options Delist
jlne.ws/14NQjYh

Indexes & Products

Bond market sell-off causes stress in $2tn ETF industry
Arash Massoudi, Tom Braithwaite and Stephen Foley in New York – FT.com
A wave of selling caused many exchange traded funds to tumble below the value of their underlying assets as a bond market sell-off caused stress in the $2tn ETF industry.
jlne.ws/14NQhPV

Emerging Market ETFs Deliver Bad News for This Hedge Fund
Benzinga
Not that the funds needed any additional help searching for new downside, but emerging markets ETFs got just that on Wednesday when Federal Reserve Chairman Ben Bernanke and his colleagues noted that downside risks to the US economy and labor market have diminished.
jlne.ws/14NQjYj

Deutsche Boerse Launches DAX Ex Financials 30 Index
jlne.ws/14NQhPW

Technology

Pacnet Enters Into Master Service Agreements With China Telecom, China Unicom, and China Mobile
Pacnet announced today that it has entered into Master Service Agreements (MSAs) with each of China Telecom, China Unicom, and China Mobile for BGP Internet connectivity services that will integrate into its Internet network fabric in China.
jlne.ws/14NQkez

peterevans Takes Systems In The City 2013 Award For ‘Best Execution-Only Settlement System’
jlne.ws/14NQhPZ

Double Honours Again For Dion At Systems In The City Awards – Products And People Acknowledged For Excellence Second Year In A Row
jlne.ws/14NQkeE

Enforcement

Federal Court in North Carolina Orders Toby D. Hunter, Prestige Capital Advisors, and D2W Capital Management to Pay over $11.7 Million for Fraud and other Violations in Commodity Pool and Managed Foreign Currency (Forex) Schemes
The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained federal court orders requiring Defendants Toby D. Hunter, Prestige Capital Advisors, LLC (Prestige), and D2W Capital Management, LLC (D2W), all of Charlotte, North Carolina, together to pay more than $4.3 million in restitution to defrauded pool and managed account clients and imposing civil monetary penalties of approximately $7.5 million.
jlne.ws/11pTjsV

SEC Charges China-Based Company and CEO in Latest Cross-Border Working Group Case; Release No. 2013-115; June 20, 2013
The Securities and Exchange Commission today charged a China-based company and the CEO with fraudulently misleading investors about its financial condition by touting cash balances that were millions of dollars higher than actual amounts.
jlne.ws/14NQkeH

Former Trader Appears in London Court on Libor Fraud Charges
New York Times
Tom A.W. Hayes, a former trader at UBS and Citigroup who is facing fraud charges, made his first appearance in a London court on Thursday.
jlne.ws/14NQhQ7

Blackstone settles Extended Stay lawsuit for $10 million
Reuters via Yahoo! News
Blackstone Group LP agreed to pay $10 million to settle a lawsuit that had sought $8.4 billion for its role in the sale and subsequent bankruptcy of hotel chain Extended Stay Inc.
jlne.ws/14NQkeJ

Environmental & Energy

Obama’s ambitious new plan to fight climate change
The Week
The White House looks to put strict new caps on carbon emissions, Congress be damned.
jlne.ws/15pz0cN

**RKB — Package expected within weeks, according to several news sources covering these developments.

Obama Readying Emissions Limits on Power Plants
The New York Times
President Obama is preparing regulations limiting carbon dioxide emissions from existing power plants, senior officials said Wednesday. The move would be the most consequential climate policy step he could take and one likely to provoke legal challenges from Republicans and some industries.
jlne.ws/1bYRFzM

**RKB — Operation: Avoid Congress. The plan largely features policies that don’t require congressional action or extra funding, including using the Clean Air Act to tackle greenhouse gas emissions, WH aide Zichal said.

Top Aide to Obama Outlines Coming Climate Strategy
National Journal
The climate-change policy President Obama is expected to roll out next month will focus on energy efficiency, renewable-energy development on public lands, and—most contentious of the three—regulations controlling greenhouse-gas emissions, a top White House aide said Wednesday.
jlne.ws/11QGwv5

Asia-Pacific

China Funds Lose in Fifth Week of Asian Outflows, Citigroup Says
Bloomberg
China funds posted the biggest losses with $558 million of net withdrawals in the week ended June 19, followed by regional funds at $521 million, Citigroup’s Hong-Kong based chief Asian strategist Markus Rosgen wrote in a note to clients today.
jlne.ws/14NQkeK

Hedge fund Grandmaster sees stock market crash in China
Reuters via Yahoo! Finance
Former chess grandmaster-turned hedge fund manager Patrick Wolff is betting on a stock market crash in China, where he says corruption and bad debts have spiraled to dangerous levels.
jlne.ws/14NQhQ8

Borsa Italiana’s 10th Equity Road Show Starts In Asia – Events In Tokyo On 20 June, Singapore On 21 June And Hong Kong On 24 June – More Than 110 Meetings Planned
jlne.ws/14NQhQ9

Press Conference With Taro Aso, Japan’s Deputy Prime Minister, Minister Of Finance, And Minister Of State For Financial Services – SIBOR
jlne.ws/14NQkeN

Frontier Markets

Malawi Stock Exchange Weekly Report – Week Ending 21 June 2013
jlne.ws/14NQkLy

MCX Weekly Market Report June 14, 2013 To June 21, 2013
jlne.ws/14NQkLB

Bulletin Of The Iranian Islamic Capital Market
jlne.ws/14NQkLC