Industry news

August 1, 2013: OCC Said to Approach Former CME CEO Donohue for Chairman; SEC tightens client rules for broker-dealers; US approves Bloomberg derivative platform

Clearinghouse OCC looks to hire former CME Group CEO Craig Donohue as the company’s new chairman. The SEC approves new rules designed to protect client cash held at brokerage firms. Bloomberg gets regulatory approval to operate as a swap execution facility.

First Read

MarketsWiki Scholars education program
John Lothian
At the close of our successful Intern Education Series, I invited any and all interns to become contributors to MarketsWiki. We are starting a program called “MarketsWiki Scholars” which will provide training in how to “wiki”. We will be holding our first wiki training session Thursday, August 1 at 2:30 pm and another at 4:00 pm in our offices in the CBOT Building in Chicago. If you are interested in participating, please email Sarah Rudolph at sarahrudolph@johnlothian.com

We look forward to seeing you there.
jlne.ws/14GY8Le

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OCC Said to Approach Former CME CEO Donohue for Chairman
Nandini Sukumar – Bloomberg
Options Clearing Corp. is in talks with Craig Donohue, the former chief executive officer of CME Group Inc., about hiring him as chairman, according to two people familiar with the matter.
jlne.ws/1bKWMJd

***** From monopoly to utility?

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CME Group Announces Short-Dated New Crop Options Volume Surpasses 1 Million Since Inception
CME Group, the world’s leading and most diverse derivatives marketplace, announced its Short-Dated New Crop Options volume surpassed 1 million in total, cumulative trading volume yesterday, July 30, 2013. Since their launch in June of 2012, a total of 1,005,918 combined Short-Dated New Crop Options on CBOT Corn and Soybean futures have traded.
jlne.ws/14GY91v

***** I once had a short date, but I hesitate to go into details.

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Fidessa Opens Up The World Of Post-Trade Processing
Fidessa group plc has today announced the availability of its open Post-trade Confirmation Hub which allows buy-side and sell-side firms to confirm trades between themselves via FIX. Key to the initiative is that firms can certify once to the hub and then be part of Fidessa’s global trading community of 3,600 buy-sides and 775 brokers.
jlne.ws/14GY91D

***** Fidessa spoke well of their hub.

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Deutsche Börse: First Hong Kong Xetra Participant Connected – Extended Trading Opportunities For Hong Kong And Mainland China
Deutsche Börse has connected the first participant from Hong Kong, Celestial Securities Limited (a subsidiary of the Hong Kong-listed financial conglomerate CASH Financial Services Group), to its Xetra trading system. The Xetra network includes more than 240 trading participants with around 4,500 traders in 18 countries.
jlne.ws/14GY91E

***** They are now a first degree connection. They are hoping to friend a lot more.

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LSE strikes tech deal in Argentina
Sophie Baker and Tim Cave
The owner of the London Stock Exchange has landed a key mandate to provide its systems and expertise to Argentina’s central securities depositary, marking the group’s latest foray into Latin America and underlining its strategy to expand overseas via technology deals.
jlne.ws/14GY7qz

***** Don’t cry for me Nasdaq.

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Awaiting the arrival of the ‘meta’ platform
Richard Jory – Risk.net
Banks and technology providers are firmly in the mix when it comes to creating sophisticated platforms on which private bankers and even retail advisers can build structured products. But complications are preventing a clear sense of when the multi-dealer or full-service ‘meta’ platform will be in widespread use.
jlne.ws/14GY7qD

***** From beta to meta here we come.

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Bobby Valentine, the 1999 Moustache Incident, and a Current US CFTC Division of Enforcement Action: Deja Vu All Over Again?
Gary DeWaal and Associates LLC
Do you remember June 9, 1999? That was the day Bobby Valentine was ejected from a baseball game between the Toronto Blue Jays and the New York Mets for arguing a catcher’s interference call on Mike Piazza. Rather that leave quietly into the clubhouse, Bobby Valentine surreptitiously re-appeared in the dugout, wearing both sunglasses and a moustache to supervise the remainder of the game. Major League Baseball was not amused, and Bobby Valentine was later fined and suspended for two days.
jlne.ws/14GY91J

***** Pay no attention to the man in the baseball hat.

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Saudi Arabia Appoints Al-Ghamdi Bourse CEO Amid Opening Bets
Bloomberg
Saudi Arabia appointed Adel Al-Ghamdi as chief executive officer of the Arab world’s largest stock exchange amid bets the kingdom will open its $415 billion market to foreign investors as early as next year.
jlne.ws/14GY91N

***** I will take that bet and raise you an options exchange.

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MarketsWiki

MarketsWiki Page of the Day
CME Group Short-Dated New Crop Options on KC Hard Red Winter (HRW) Wheat futures
jlne.ws/1bKXTbK

MarketsWiki Recent Updates

People

Christine Bookmyer; Robert Steigerwald

Companies, Organizations and Groups

Actant; SAC Capital Advisors LP; NYSE Euronext

Products

CME Group Short-Dated New Crop Options on KC Hard Red Winter (HRW) Wheat futures

Miscellaneous

Hard red winter wheat

Statistics

42,325,223 pages viewed, 7,605 articles, 162,663 edits
MarketsWiki Statistics

Lead Stories

SEC tightens client rules for broker-dealers
Reuters
The top securities regulator on Wednesday set new rules to protect clients with cash or securities at securities brokers, requiring more disclosure and safeguards from firms including some of Wall Street’s largest.
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US approves Bloomberg derivative platform
Michael Mackenzie in New York – FT.com
Bloomberg has gained official US regulatory approval to transact derivatives via a swap execution facility (Sef), opening the door to a new era of trading for the more than 1,000 clients that trade swaps on its terminals.
jlne.ws/14GY9i7

CME Group Net Income Rises 27% on Currencies and Metal Trades
Matthew Leising – Bloomberg
CME Group Inc., the world’s largest futures market, said second-quarter profit rose 27 percent compared with the year-earlier period as record foreign exchange and metals trading helped boost volume. Net income climbed to $311 million, or 93 cents a share, from $245 million, or 74 cents a share, a year earlier, Chicago- based CME Group said today in a statement distributed by PR Newswire. The company was expected to earn 90 cents per share, according to an analyst survey conducted by Bloomberg.
jlne.ws/14GY9ia

TMX Trailing Exchange Peers as Volume Slumps
Bloomberg
TMX Group Ltd. is the worst-performing exchange operator in North America this year, as a rout in global commodity prices cuts equity trading volume and a bank-led competitor prepares to enter the business.
jlne.ws/14GY9ic

Cross-margining at CME slowed by practical challenges
Tom Osborn – Risk.net
Nearly five months on from the start of mandatory clearing in the US, only a handful of clients at two dealers – Barclays and Citi – have been able to take advantage of cross-product margining between listed and over-the-counter derivatives at CME Group, the first venue to offer the service.
jlne.ws/14GYami

Under Scrutiny, Goldman Offers to Speed Metal Delivery
GRETCHEN MORGENSON – NYTimes.com
Goldman Sachs has offered to speed up delivery of aluminum stored in warehouses that it controls as federal authorities examine how delays at the facilities have driven up the price of the metal.
jlne.ws/14GY9if

Insight: For nuns and analysts alike, bank commodity earnings are a mystery
Reuters
When the Reverend Seamus Finn got an email from Goldman Sachs last week, the giant Wall Street bank was addressing an issue that was already on his mind.
jlne.ws/14GY9yw

Regulatory

SEC Adopts Rules to Increase Protections for Investors With Assets Being Held By Broker-Dealers
The Securities and Exchange Commission today announced the adoption of rules designed to substantially increase protections for investors who turn their money and securities over to broker-dealers registered with the SEC.
jlne.ws/14GY9yx

SEC Adopts Amendments to Financial Responsibility Rules for Broker-Dealers
The Securities and Exchange Commission today announced the adoption of amendments to the net capital, customer protection, books and records, and notification rules for broker-dealers.
jlne.ws/14GY9yz

CFTC Division of Clearing and Risk Issues Notice Regarding Expiration of Cross-Border Exemptive Relief from the Clearing Requirement
The Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk announced today that on October 9, 2013, certain exemptive relief regarding the Clearing Requirement is scheduled to expire.
jlne.ws/14GY9yF

FCA considers investigation of metals warehousing – sources
Reuters via Yahoo! News
Britain’s financial watchdog is considering an investigation of the London Metal Exchange warehouse system after U.S. regulators put banks and big traders on notice of a probe due to complaints of inflated prices, two sources said.
jlne.ws/14GYaCH

UK’s Financial Conduct Authority: Andy Briscoe Appointed Chairman Of Money Advice Service
jlne.ws/14GYaCK

Letters Between The European Commission And Japan’s Financial Services Agency Regarding Equivalent Assessment Of OTC Derivatives Regulations
jlne.ws/14GYaCN

Exchanges & Trading Facilities

Tokyo Financial Exchange Trading Volume In July 2013
The trading volume of Three-month Euroyen futures in July was 243,614 ( 46.0% MoM / 66.7% YoY) and its average daily volume was 11,073. The total trading volume of Exchange FX Margin contracts (Click 365) in July was 4,084,849 ( 30.5% MoM / 3.8% YoY) and its average daily trading volume was 177,636. Combined trading volume for all TFX products was 4,698,857 ( 30.6% MoM / 7.6% YoY) and its average daily trading volume was 204,814.
jlne.ws/14GY9P2

TMX Group Limited Reports Results for the Second Quarter 2013
Revenue of $182.3 million in Q2/13, up 6% compared with Q1/13; Diluted earnings per share of 47 cents in Q2/13
jlne.ws/14GYaCO

MIAX Options Exchange: Allowing All Lead Market Makers To Receive Directed Orders and Amendments To The MIAX Marketing Fee Program – Effective On August 1, 2013
jlne.ws/14GY9P7

Direct Edge Trading Notice #13-34: Direct Edge Fee Schedule Changes Effective August 1, 2013
jlne.ws/14GYaTa

Borsa Italiana Welcomes Digital Magics To AIM Italia – Mercato Alternativo Del Capitale
jlne.ws/14GYaTf

Hedge Funds & Managed Futures

Roc Capital Said to Shutter Main Hedge Fund After Losses
Bloomberg
Roc Capital Management LP, the hedge-fund firm that counted Deutsche Bank AG and the daughter of billionaire Lakshmi Mittal among its investors, is liquidating its main fund after losing money, according to a person with knowledge of the firm.
jlne.ws/14GYaTi

SEC Says Largest U.S. Hedge Funds’ Debt Tops $1 Trillion
Bloomberg
The nation’s largest hedge funds had $1.47 trillion in net assets and more than $1 trillion in borrowings as of the fourth quarter, according to the first report compiled on confidential data they provided to the U.S. Securities and Exchange Commission.
jlne.ws/14GY9Pe

Who Are Europe’s Hedge Fund Winners?
Harriet Agnew – MoneyBeat – WSJ
Want to know who the biggest hedge funds are in Europe? And what are the best performing strategies?
jlne.ws/14GYaTl

BlackRock starts index series focused on retirement planning
Reuters
BlackRock Inc, the world’s largest money manager, is making a push into the retirement market with a new series of indexes and funds geared toward individual investors preparing for retirement.
jlne.ws/14GY9Pj

Hedge Fund Billionaire Bill Ackman Crushed On Last Day Of July That Did Not Go As Planned
Forbes
Billionaire hedge fund manager William Ackman chose the morning of the last day of July to announce his biggest investment ever, a $2.2 billion bet his Pershing Square hedge fund made to take a 9.8% stake in Air Products & Chemicals. Then things fell apart.
jlne.ws/14GYaTo

BlackRock Solutions Emea head resurfaces at BCG
Sophie Baker – Financial News
The former head of BlackRock’s risk analytics arm, BlackRock Solutions, in Europe, the Middle East and Africa has resurfaced at Boston Consulting Group, Financial News has learnt.
jlne.ws/14GYb9D

CalPERS Announces Selection Of IT Chief Information Officer
The California Public Employees’ Retirement System (CalPERS) has named Liana Bailey-Crimmins as its Chief Information Officer (CIO) of the recently reorganized Information Technology Services Branch (ITSB). She will begin her new role at CalPERS on August 5.
jlne.ws/14GYa5B

BondDesk to Distribute over 7,000 Municipal Bid Wanted Requests Per Day over Fabkom – Yahoo! Finance
BondDesk and Fabkom today announced an alliance that will enable the bid wanted1 requests being generated by the financial advisors on the BondDesk platform to be distributed through Fabkom, a leading trading technology provider and aggregator of municipal bond trading information for broker’s-brokers and broker-dealers.
jlne.ws/14GYa5C

Banks & Brokers

RBS selects McEwan as new chief
Patrick Jenkins, Banking Editor – FT.com
Royal Bank of Scotland is in late-stage discussions with regulators at the Bank of England to appoint insider Ross McEwan as the part-nationalised lender’s new chief executive.
jlne.ws/14GYa5E

Societe Generale Second-Quarter Net Profit Surges
Noemie Bisserbe – MoneyBeat – WSJ
French bank Societe Generale SA confirmed Thursday its guidance for the next two years, and said second-quarter net profit more than doubled, buoyed by its international retail network and its investment-banking business.
jlne.ws/14GYa5F

Credit Suisse Taps Daley For Global Data Role, Replaces Le Donne
Faye Kilburn – WatersTechnology
Credit Suisse has appointed Trevor Daley global head of market data, replacing Gerald le Donne who has been overseeing market data strategy at the bank for the past two and a half years, after initially joining as chief technology officer in 2003.
jlne.ws/14GYa5G

Lloyds Banking Group Returns to Profit
MARK SCOTT – NYTimes.com
Lloyds Banking Group said on Thursday that its second-quarter profit more than doubled, as the part-nationalized British bank took another step toward privatization.
jlne.ws/14GYa5K

JPMorgan’s Conciliatory Approach in Washington
WILLIAM ALDEN – NYTimes.com
JPMorgan Chase is using its checkbook to try to mend frayed relationships with the government, Jessica Silver-Greenberg and Ben Protess report in DealBook. But the new and conciliatory approach is yielding mixed results. “Government officials, stung by the bank’s past displays of hubris, may drive up the price of settlements or resist the overtures altogether.”
jlne.ws/14GYa5P

The Power Behind the Throne at the Federal Reserve
JESSE EISINGER, ProPublica – NYTimes.com
The debate over whether Janet Yellen or Lawrence H. Summers will be the next Federal Reserve chairman — or some dark horse, Timothy F. Geithner perhaps? — is doubtlessly important.
jlne.ws/14GYb9V

HSBC hits regulatory issues over Iraq business exit
Reuters
HSBC Holdings is struggling to exit its Iraqi operations, having had two proposals to sell its stake in Dar Es Salaam Investment Bank (DES) rejected by the country’s regulator, according to the Iraq Securities Commission (ISC).
jlne.ws/14GYa5Q

BofA to Revamp Merrill Fees
CORRIE DRIEBUSCH – WSJ.com
Bank of America Corp. plans to raise fees for thousands of customers at its Merrill Lynch brokerage arm as part of an overhaul of the way it charges for its account-management services.
jlne.ws/14GYbq8

GAIN Capital Hires Peter Cronin To Lead Institutional Sales Business In EMEA
GAIN Capital Holdings, Inc., a global provider of online trading services, announced today the appointment of Peter Cronin as Managing Director and Head of EMEA GTX Sales.
jlne.ws/14GYbq9

Clearing & Settlement

CMEGroup – NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (C1) Effective Thursday, August 1, 2013
jlne.ws/14GYbqb

Indexes & Products

NYSE Euronext launches the AEX Ext index
jlne.ws/14GYd1i

Technology

SunGard Upgrades Asset Arena InvestOne for ‘Multiple Books of Record’
Anthony Malakian – WatersTechnology
SunGard has released the latest version of its Asset Arena InvestOne accounting platform and it now has functionality for Multiple Books of Record, as well as the launch of a new operational management and monitoring solution.
jlne.ws/14GYd1k

Aite Says Compliance Tech Spend to Increase 35 percent in Three Years
WatersTechnology
A report from Boston-based consultancy Aite Group indicates that compliance technology spending is likely to grow by 35 percent from 2012 to 2015, with hosted solutions persisting as the preferred deployment option.
jlne.ws/14GYd1l

Numerix Introduces a New Universal Framework for Funding Value Adjustment (FVA)
Numerix, the leading provider of cross-asset analytics for derivatives valuations and risk management, today announces a new methodology for calculating Funding Value Adjustment (FVA) for vanilla and exotic deals at both the trade, and portfolio level.
jlne.ws/14GYbqm

Jordan & Jordan deploys Nasdaq OMX FinQloud
jlne.ws/14GYd1p

Enforcement

SEC Sanctions Two Investment Advisers for Best Execution Failures
The Securities and Exchange Commission today sanctioned two investment advisory firms for failing to seek best execution on client trades placed with their in-house brokerage divisions.
jlne.ws/14GYd1r

Ontario Securities Commission seeking victims in Al-Tar Energy Corp. matter
Ontario Securities Commission seeking victims in Al-Tar Energy Corp. matter The AMF advises Quebeckers who may have been the victim of the illegal activities of Al-Tar Energy Corp. that the Ontario Securities Commission and the Civil Remedies for Illicit Activities Office of the Ministry of the Attorney General of Ontario are seeking victims in this matter, as they are now entitled to make a claim for compensation.
jlne.ws/14GYd1s

[BCSC] Securities regulator alleges that former geologist tipped his wife and they engaged in insider trading
jlne.ws/14GYbqp

[CFTC] Notice of Covered Action – Complete Developments LLC, Investment International Inc., Global Strategic Marketing Inc., Kevin Harris, Keelan Harris, Karen Starr and Patrick Cole – Award Claims Due No Later than October 30, 2013
jlne.ws/14GYd1w

[CFTC] Notice of Covered Action – Arjent Capital Markets LLC, Chicago Trading Managers LLC, Spencer Montgomery, and Brian Reynolds – Award Claims Due No Later than October 30, 2013
jlne.ws/14GYbGH

[CFTC] Notice of Covered Action – Christopher D. Hales, Eric A. Richardson, and Bentley Equities, LLC – Award Claims Due No Later than October 30, 2013
jlne.ws/14GYdhL

[CFTC] Notice of Covered Action – Philip Milton, William Center, Gregory Center, Trade LLC, BD LLC, CMJ Capital LLC, Center Richmond LLC, and TWTT LLC – Award Claims Due No Later than October 30, 2013
jlne.ws/14GYdhP

[CFTC] Notice of Covered Action – FCStone LLC – Award Claims Due No Later than October 30, 2013
jlne.ws/14GYdhR

Environmental & Energy

Launch of Belgian Power Futures and Dutch Power Futures
As informed in the customer information from 30 April 2013, EEX is planning to introduce Belgian and Dutch Power Futures with physical fulfilment. The launch date will be the 2 September 2013.
jlne.ws/14GYdhW

California and Australia bolster carbon trading ties
Business Green
California and Australia have agreed to step up efforts to work together to link their respective carbon markets, just weeks after Australia’s prime minister announced he would accelerate plans to replace the country’s carbon tax with an emissions trading scheme.
jlne.ws/1bLlZTI

Policy & Enforcement Briefing: Carbon Markets, EPA Budget, Efficiency Bill
Environmental Leader
The California Air Resources Board and the Australian Clean Energy Regulator signed a memorandum of understanding to develop complementary market-based programs. The agreement establishes a framework for a working relationship and establishes information-sharing between the two agencies.
jlne.ws/11vsWlf

Asia-Pacific

SGX Launches Long Dated Orders For Securities
Singapore Exchange (SGX) has launched long dated order types, allowing investors to retain buy or sell orders for longer than the usual one day.
jlne.ws/14GYdhY

ANZ Opens a Gold Vault in Singapore
Gillian Tan – MoneyBeat – WSJ
Following the footsteps of global rivals including UBS AG, JPMorgan Chase & Co. and Deutsche Bank AG, Australia’s ANZ Banking Group has opened a gold vault in Singapore.
jlne.ws/14GYbGM

China’s Stock Market Dysfunctional Amid IPO Freeze, Neoh Says
Bloomberg
China’s equity market has become “dysfunctional” after the regulator halted share sales and investors shifted to wealth-management products, said Anthony Neoh, a former government adviser who helped the nation open up to foreign money managers a decade ago.
jlne.ws/14GYdyh

Japan Commodity Clearing House SPAN Parameter update effective Aug. 1
jlne.ws/14GYdym

SGX introduces new rules on poll voting and general meetings in Singapore
jlne.ws/14GYbGR

Hong Kong’s Securities And Futures Commission: Premature Selling Of Placing Shares May Constitute Illegal Short Selling
jlne.ws/14GYdyo

Frontier Markets

Tel Aviv Stock Exchange on verge of serious problems -regulator
Reuters
The Tel Aviv Stock Exchange could face huge problems unless major regulatory changes are made to address a fall in trading volume, the market regulator said on Wednesday.
jlne.ws/14GYdyr

Johannesburg Stock Exchange (JSE) Launches Online Virtual Trader
In a bid to grow public participation on the Johannesburg Stock Exchange, the JSE has launched an online trading simulator which will allow aspirant traders to test a range of JSE products, in a risk-free environment.
jlne.ws/14GYbXb

Malawi Stock Exchange Monthly Market Performance Report – July 2013
jlne.ws/14GYdyy

Miscellaneous

Cognito Launches First Customized Editorial Calendar Service for Financial Services
Cognito, the full-service public relations and marketing agency for the financial services sector, today announced the release of Cognito Analytics Opportunities, a comprehensive, searchable listing of upcoming print and digital media features.
jlne.ws/14GYdOP