Industry news
Date: Jul 5, 2013
July 5, 2013: NYSE Euronext launches EnterNext in Brussels; Tradeweb applies for US swap trading; Knight Capital’s Joyce resigns days after $1.8bn takeover
NYSE Euronext’s new small-and-medium trading venue EnterNext turns on the lights in Brussels. Tradeweb applies for permission to operate an electronic swap trading facility. With Knight Capital’s takeover complete, Thomas Joyce heads for the exit.
First Read
The Fun is Over
Pat Kenny – CQG
I’m fairly certain that the reason John asked me to be the guest editor this week is because of the shortened work week in the United States due to the Fourth of July holiday, giving me one less day to stress about what to write. Due to the holiday falling on a Thursday, many traders would be tempted to take Friday off and extend their weekend. However, because today is the first Friday of the month, the non-farm payroll and unemployment numbers will be released this morning. What a buzz kill!
Obviously, these numbers are important globally and with the economy starting to show signs of recovery it would be good to see some kind of momentum toward lowering our unemployment rate. Let’s hope for the best.
I have enjoyed being the guest editor this week although it has brought back memories of my college days and trying to get papers in on time. I thought those days were well behind me. I really appreciate the hard work that goes into producing this newsletter every day. Thank you John for the opportunity and for giving me one more “interesting” thing to add to my experiences as “The Most Interesting Man In the World”.
He stands head and shoulders over all of us!
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Farewells, Welcome Backs and Be-Right-Backs
Jonathan Matte
Thanks for taking the time to guest-edit the JLN this week, Pat! I don’t always post gag pictures of guest editors, but when I do, they’re of you.
John Lothian returns next week after two weeks of travel to the wilds of London, and the wilds of somewhere closer to home where hopefully the Boy Scouts under his charge behaved honorably and did not tie him to trees very often.
And finally, I’m off for several days (traveling neither to Hong Kong nor to Moscow’s airport), returning a week from next Wednesday. In my absence, the JJLCO team will bravely don their news ninja masks and take over my software and search lists in order to aggregate and produce the John Lothian Newsletter. They’ll do just fine, of course, but being as they’re not several hours ahead of the business day in the USA, you may find that the newsletter will be delivered a bit later than usual for a week or so. See you when I get back!
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NYSE Technologies’ Robson Calls for Collaboration; Pushes Shared Infrastructure to Reduce Costs
Pete Harris – Low-Latency.com
Nine months after taking the reigns at NYSE Technologies, CEO Jon Robson has begun to articulate a renewed vision for NYSE Euronext’s IT services operation with “A Call for Collaboration” to the financial markets. Of course, in Robson’s mind, that collaboration hopefully means trading firms will embrace the cloud platform, global network and open sourced middleware APIs that it has rolled out in recent years.
jlne.ws/1cYr0Ub
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A Good Thing to Remember
Dan Collins – Dan Collins Report
Newsletter writer John Lothian started a tradition about a decade or so ago of printing the complete Declaration of Independence in his July 4th newsletter. I happened to log on to my home computer back then (before the era of smartphones) and noticed this. I thought it was a good idea to read it to my three sons and it has been sort of tradition ever since. It is a good idea to go back and look at this remarkable document.
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***JM: Thanks for the thumbs-up, Dan! Your blog’s commentary on this — and other topics — is appreciated and worth reading.
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It’s Time for the US and Europe to Cooperate on Financial Services Reform
The Exchange via Yahoo! Finance
The United States should use the upcoming negotiations with Europe on a Transatlantic Trade and Investment Pact to push cooperation forward on key financial reforms.
jlne.ws/1cYr2vb
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Australian dark pool rules have swift impact
Anish Puaar – Financial News
New rules governing the use of anonymous trading venues in Australia have slashed some forms of so-called dark trading by over 50% in the first month since being introduced, according to data supplied by the local regulator.
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***DA: Is this a good thing or a bad thing? I can’t seem to tell.
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Tracking Risk Isn’t So Easy
Francesco Guerrera – MoneyBeat – WSJ
How risky do you want your bank investments to be? Don’t laugh, it is a serious question. These days, investors can adopt a buffet-style approach to bank risk. To get a sense of what is on offer, take a look at the table accompanying this column.
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***DA: I’ll have the safe-as-my-mattress investment, please. And a big plate of General Tso’s chicken.
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Quick View: Emir begins to make its mark
Philip Stafford – FT.com
The market structure industry has spent so much effort worrying about the impact of the US Dodd-Frank act that its European counterpart hasn’t had much of a look-in. But the snappily titled European Market Infrastructure Regulation (Emir) is rapidly, if quietly, elbowing its way to the top of the agenda of banks, exchanges and clearing houses.
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***DA: Exhibit “A” in the market structure changes due to Emir, see the LSE/Turquoise deal below.
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London Stock Exchange plc to acquire Turquoise Derivatives
London Stock Exchange plc has entered into an agreement to acquire Turquoise Derivatives (the Transaction), the derivatives business of Turquoise Global Holdings Limited (Turquoise). The platform, which will be renamed ‘London Stock Exchange Derivatives Market’, will continue to operate as it currently does, but as part of a Regulated Market of a Recognised Investment Exchange (RIE). Turquoise will continue to operate a pan-European cash equities multilateral trading facility (MTF).
jlne.ws/1cYr1aF
***DA: Perhaps a better fit, considering the new regulatory regime, but a much less colorful name.
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Mini masterpieces in your pocket
Emma Jacobs – FT.com
Arriving from Buckingham Palace, softly spoken Gordon Summers, wearing a shirt with a floral trim, is lugging a wheelie-case. He refuses to open it. Its contents are secret. For contained in his black case are designs for a coin commemorating the impending royal birth.
jlne.ws/1cYr0Uk
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Summer Intern Education Series
John J. Lothian & Company, Inc. is pleased to announce the creation of a Chicago-based industry-wide summer intern education series to introduce the history, innovation, key leaders and future opportunities to participating interns, summer workers, new employees and those interested in careers in the trading and markets. The series, which kicks off on July 16, features presentations from a select group of industry leaders, innovators, entrepreneurs, attorneys, technologists, investors, traders and other industry participants.
The series will start on July 16, with an event featuring Leo Melamed speaking about his experience and philosophy of growing global markets. The kickoff event will also feature Emily Lambert, author of “The Futures,” as well as Pat Fay of Russell Investments (The impact of indices) and Tom McCabe of OneChicago (The story and future of securities futures).
The kickoff event will be held at the CME at 20 South Wacker and rest at the CBOT Building. 141 W. Jackson Blvd. The afternoon series will continue with events on July 18, 23, 25 and 30.
To read more about the program and buy tickets, click HERE.
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Lead Stories
NYSE Euronext launches EnterNext in Brussels
NYSE Euronext) officially launched EnterNext in Brussels today. This new subsidiary is a dedicated marketplace for SMEs. With a bold strategy and a NYSE Euronext proven capacity to deliver, EnterNext has been designed to facilitate the financing requirements and development of SMEs that operate regionally, nationally and internationally. The aim of the initiative is to make financing through the equity market attractive to SMEs by involving all stakeholders of the Brussels marketplace.
jlne.ws/1cYr2vs
Tradeweb applies for US swap trading
Philip Stafford – FT.com
Tradeweb Markets has become only the second company to apply to run the new electronic trading venues mandated into existence by reform of the vast off-exchange derivatives market.
jlne.ws/1cYr2LI
Knight Capital’s Joyce resigns days after $1.8bn takeover
Arash Massoudi in New York – FT.com
Tom Joyce, the executive synonymous with the rise and fall of Knight Capital, has resigned only days after the electronic trading company completed its $1.8bn takeover by high-frequency trading group Getco.
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China Metal Futures Volumes Slump as Super Cycle Fades
Bloomberg
Industrial metals futures trading in China slumped in the first half of this year amid a rout in global commodities as investment banks called an end to the super cycle of gains in raw materials prices.
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U.S. Exchanges Said to Seek Delay for Volatility Curbs
Sam Mamudi & Dave Michaels – Bloomberg
The biggest U.S. equity exchange operators and an industry trade group plan to ask the Securities and Exchange Commission to delay the final phase of a marketwide program aimed at curbing sudden stock swings, according to three people with direct knowledge of the matter.
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Japan banks step up interbank lending controls
Ben McLannahan in Tokyo – FT.com
The Japanese Bankers’ Association is to step up its supervision of the country’s interbank lending market, in the wake of a global scandal over the attempted manipulation of key rates underpinning hundreds of trillions of dollars of loans and financial products.
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Second wind for regulators leaves banks feeling bruised
Patrick Jenkins, Banking Editor- FT.com
The past fortnight has been a potentially expensive one for banks on both sides of the Atlantic. This week, the Federal Reserve unveiled details of the US implementation of the international Basel III rule book on capital. Two weeks ago, the top eight UK banks were told how much additional capital they must find over the coming months.
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Mursi Ouster Rooted in Failure to Sprout Egypt Recovery
Dana El Baltaji, Ahmed A. Namatalla & Simon Kennedy – Bloomberg
The rage that helped topple Egyptian President Mohamed Mursi was nurtured by the Arab Spring’s failure to deliver the green shoots of economic recovery.
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Peregrine’s Receiver in Talks to Sell Romanian Property Stake
Jacob Bunge – WSJ.com
A struggling Romanian property venture partly owned by convicted fraudster Russell Wasendorf Sr. has drawn interest from potential investors, according to the receiver selling off Mr. Wasendorf’s assets. Two parties have expressed interest in acquiring Mr. Wasendorf’s minority stake in Avrig 35 Group, according to Michael Eidelman, the receiver liquidating the Peregrine Financial Group founder’s estate to raise funds for clients and creditors.
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China Names Head of Sovereign-Wealth Fund
LINGLING WEI – WSJ.com
China’s top leaders appointed a senior government official as head of its sovereign-wealth fund, China Investment Corp. said in a statement Friday.
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Regulatory
CFTC Watchdog Says Gensler’s E-Mails Didn’t Violate U.S. Law
Silla Brush – Bloomberg
Commodity Futures Trading Commission Chairman Gary Gensler didn’t violate federal record-keeping laws by using his personal e-mail for agency business during the collapse of MF Global Holdings Ltd., the agency’s watchdog said.
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Prudential enters uncharted legal realm by appealing its regulatory label
Washington Post
Prudential Financial has a fight on its hands that could alter the course of government regulation of large nonbank companies. The insurance giant entered uncharted legal territory earlier this week when it appealed the government’s decision to subject the firm to stricter supervision.
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RBA’s Lowe Says Regulators Face Trade-Offs in Bid to Curb Risks
Bloomberg
Reserve Bank of Australia Deputy Governor Philip Lowe said regulators face trade-offs as they set rules aimed at reducing risks in the financial system.
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Canadian Securities Regulators Establish Regulatory Framework to Manage Risks Associated with Direct Electronic Access [CSA]
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Exchanges & Trading Facilities
Florian Claus joins Scoach Europa AG Management Board effective 4 July 2013
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SIX Financial Information and swissQuant Group launch ImpaQt
Zurich – SIX Financial Information and swissQuant Group are pleased to announce a joint project to support the wealth management industry with enhanced risk compliance.
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The first Board meeting of EnterNext defines its missions and priority goals
In its first meeting, held yesterday and chaired by Eric Forest, the EnterNext Board of Directors clearly defined resources and priorities following announcements made on May 23.
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HKEx Monthly Market Highlights – June 2013
The average daily turnover for the first six months of 2013 was $68,280 million, an increase of 20 per cent when compared with $56,697 million for the same period last year.
The average daily turnover of derivative warrants for the first six months of 2013 was $8,696 million, an increase of 17 per cent when compared with $7,448 million for the same period last year.
The average daily of turnover of ETFs for the first six months of 2013 was $4,547 million, an increase of 166 per cent when compared with $1,709 million for the same period last year.
Funds raised through IPOs for the first six months of 2013 was $39,488 million, an increase of 28 per cent when compared with $30,860 million for the same period last year.
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HKEx On-Floor & Off-Floor Trading Statistics
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ASX Group Monthly Activity Report – June 2013
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ASX Compliance Monthly Activity Report – June 2013
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Ljubljana Stock Exchange: Monthly Statistics Report June 2013
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Vienna Stock Exchange Monthly Statistics – June 2013
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Vienna Stock Exchange Monthly Statistics: Derivative Market – June 2013
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Monthly Summary Bulgarian Stock Exchange-Sofia June 2013
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Ebioss Energy to start trading on MAB tomorrow
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NORBERT DENTRESSANGLE CELEBRATES FIRST DAY OF TRADING ON NYSE EURONEXT LONDON.
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Top 20 Largest Consolidated Short Position Report – June 30, 2013
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Borsa Italiana Monthly Update – June 2013
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Irish Stock Exchange Statistics June 2013
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TOM Insight June 2013
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Moscow Exchange: Trading And Clearing System Testing In The Production Environment
On July 06, 2013 a public testing of the ASTS Trading and Clearing system will be held in the production environment of the “Main Market” sector of the Moscow Exchange’s Securities market.
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Hedge Funds & Managed Futures
Stock-picking hedge funds stand out in June
Harriet Agnew – Financial News
Prominent hedge fund managers, whose business is picking the best and worst stocks to invest in, posted gains in June amid the sell-off in global markets.
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Fund Manager Ducks Mortgage Trouble—at His Peril
GREGORY ZUCKERMAN – WSJ.com
It is one thing for a hedge-fund manager to sell investments. It is quite another to dump everything, close the firm and hand millions back to investors—for the second time in three years.
jlne.ws/1cYr3PX
Protestant group votes to divest from fossil fuels
AP
A group of Protestant churches has become the first national religious body in the U.S. to vote to divest its pension funds and investments from fossil fuel companies because of climate change concerns.
jlne.ws/1cYr4U4
Paulson’s Rebound Slows as Fund Returns Declined in June
Bloomberg
John Paulson, the billionaire hedge- fund manager seeking to recover from losses tied to gold and wrong-way calls on the economy, posted declining returns in June as markets fell on the Federal Reserve’s warning that it may phase out stimulus.
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Metals pricing under threat from warehousing rule change
Jack Farchy – FT.com
Warehousing sounds dull. But investors should pay attention: it may be about to reshape the global metals markets. The buzz among metals traders this week was not about Chinese growth or US monetary policy, but a proposed change in warehousing rules by the London Metal Exchange.
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Banks & Brokers
Joyce Leaving Knight After Steering Firm From Meltdown to Merger
Sam Mamudi – Bloomberg
Thomas Joyce, who built Knight Capital Group Inc. into one of the biggest U.S. market making firms only to see it driven to the brink of bankruptcy and then into a suitor’s arms, is leaving the company.
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Goldman Sachs Given Two-Year Phase-Out for Some Swaps Trades
Jesse Hamilton – Bloomberg
Goldman Sachs Group Inc. (GS) will have another two years to separate derivatives trading from units that get federal backing, according to a letter to the bank posted on the Federal Reserve website.
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Citigroup Wins Dismissal of Ex-Client’s Forex Bets Claim
Bloomberg
Citigroup Inc. won dismissal of a Hong Kong lawsuit by former private banking client Natamon Protpakorn seeking $17.9 million for damages from currency bets liquidated when the bank closed her positions.
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JPMorgan, Bank of NY Mellon win dismissal of forex lawsuits
Reuters via Yahoo! Finance
JPMorgan Chase & Co and officials at Bank of New York Mellon Corp on Wednesday won the dismissal of lawsuits accusing them of overcharging clients for trading currencies.
jlne.ws/1cYr46t
Barclays: We Are Not at Odds With Regulators
CNBC via Yahoo! Finance
Barclays CEO Antony Jenkins has denied any conflict between his bank and its regulators, even as the U.K. banking giant tries to fend off pressure to meet stricter capital requirements.
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Clearing & Settlement
CME Group Clearing: Update to IRS Margin Parameters (Pending Regulatory Review)
jlne.ws/1cYr4mO
CME Group Clearing: Change to Interest Rate Swap Price Curve
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Indexes & Products
According To ETFGI: Globally ETFs And ETPs Had Outflows Of US$3.98 Billion In June 2013, Their First Net Outflows In Over Two Years
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S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices – A Deletion From The S&P/TSX Venture Composite Index
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Enforcement
SAC’s Cohen seen avoiding criminal charges by July deadline: WSJ
Reuters via Yahoo! News
BOSTON – U.S. prosecutors do not have enough evidence to file criminal insider trading charges against hedge fund manager Steven A. Cohen before a July deadline, the Wall Street Journal reported on Thursday.
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DealBook: Former Trader Returns to Court on Libor Fraud Charges
New York Times
Tom A.W. Hayes, a former trader at UBS and Citigroup charged with fraud related to the manipulation of a global benchmark interest rate, is to remain on bail until his next court hearing in October, a judge said on Thursday.
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SEC Freezes $4.6 Million In Insider Trading Profits Tied To Attempted Pharma Acquisition
Forbes
The Securities and Exchange Commission announced it had obtained an emergency asset freeze of nearly $5 million in illicit profits realized through suspicious trading just before the announcement of a rejected acquisition offer in the pharmaceutical industry.
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False identities used in ASIC insurance ‘tombstoning’ case
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Stronger Super is here
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[SIX] Investigation against Commerzbank AG, Frankfurt am Main [pdf]
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Environmental & Energy
Carbon Market Glut-Fix Plan Wins Backing in EU Parliament
Bloomberg
The European Parliament approved a plan intended to reduce a record glut of permits and increase prices in the world’s biggest carbon market after they slumped to an all-time low.
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Carbon wins lifeline after tight EU parliament vote
Reuters
The European Parliament after months of bitter debate backed a plan on Wednesday to boost carbon prices, throwing a lifeline to the EU Emissions Trading System (ETS) and the bloc’s push for greener energy.
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UN Charts ‘Unprecedented’ Global Warming Since 2000
Bloomberg
The planet has warmed faster since the turn of the century than ever recorded, almost doubling the pace of sea-level increase and causing a 20-fold jump in heat-related deaths, the United Nations said.
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Asia-Pacific
Six UBS Japan Bankers Said to Leave as 7 Hired for Equities
Bloomberg
Six UBS AG bankers left the investment banking unit in Japan , said two people familiar with the situation, and the Swiss firm hired seven people for equities in the world’s best-performing major stock market.
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HSBC to exit from retail banking, wealth management in Korea
Reuters via Yahoo! Finance
HSBC Holdings Ltd , Europe’s biggest bank, will close its retail branch network and wealth management businesses in South Korea, leaving only the global banking and markets unit that serves corporate clients.
jlne.ws/1cYr5HC
FOW Awards for Asia – shortlist announced
FOW
Now in the their second year, the FOW Awards for Asia recognise the best of the Asian derivatives industry. The awards are currently being reviewed by our judging panel and the winners will be announced at a Gala Dinner at the Intercontinentel Hotel in Singapore on 26 September.
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The Chinese financial game-changer still to come
Michael Casey’s FX Horizons – MarketWatch
Think of it as the financial-market equivalent of the collapse of the Berlin Wall. When China’s government eventually fulfills its pledge to lift restrictions on international fund flows into and out of its financial system, the Chinese economy will undergo profound changes — with global implications.
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William Heinecke, an Early Entrepreneur in Asia, Is Still Finding Success
NYTimes.com
William Ellwood Heinecke has always followed his instincts. He started his first businesses, cleaning offices and selling advertising, as an expatriate high school student in Bangkok. He was a millionaire before he reached voting age.
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Speech By Song Liping, President And CEO Of Shenzhen Stock Exchange, At A Panel Session On Multi-Tiered Capital Market During 2013 Lujiazui Forum
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Frontier Markets
BSE launches futures trading on Dubai bourse
Reuters via Yahoo! Finance
The Dubai Gold and Commodities Exchange (DGCX) started trading an Indian stock index futures contract on Wednesday, aiming to tap demand from the large expatriate Indian population residing in the Gulf region.
jlne.ws/1cYr7yY
Dubai’s DGCX Plans to Offer Plastics, Renminbi Futures Contracts
Arif Sharif – Bloomberg
Dubai Gold & Commodities Exchange, the Middle East’s first derivatives market, plans to offer futures contracts based on polypropylene and the renminbi as it seeks to tap into growing trade with China.
jlne.ws/1cYr7z4
Lottery Raided as $115 Billion Hole Filled: Argentina Credit
Bloomberg
Argentina owes itself more money than ever as President Cristina Fernandez de Kirchner squeezes pesos out of public institutions from the pension agency to the lottery, a decade after losing its access to overseas financing.
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London Stock Exchange Hosts Pakistan Capital Markets Day
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MCX Weekly Market Report – June 28, 2013 To July 04, 2013
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