| March 15, 2016 | "Irreverent, but never irrelevant" | | | | John Lothian
Publisher
John Lothian News | |
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A Note From Boca
By John J. Lothian
Can I guest edit my own newsletter? Sure, why not.
I made it safely to Boca Raton, Florida after a sleepy flight, bumpy landing and an outtrade on a rental car. The JLN team is back in the Airbnb house it used for last year's FIA Boca Raton conference.
After a dinner at the Boca Resort with friends of Intermarket Communications, and cavorting with a wide range of industry luminaries last night, a fire alarm caused the bar to be emptied and forcing one "sleepy" regulator to move from one chair to another outside, making it an early night of midnight. I suggested to Jeff Sprecher that someone pulled the fire alarm to prevent an envelope from being stuffed under someone's door.
Yesterday I learned Allan Schoenberg had left Bloomberg last Friday and last night I learned he had accepted a position as vice president of global corporate communications for Nasdaq. The former CME uber social media flack is back in the exchange space at a very interesting time. Also, Bloomberg is searching for someone to fill his former role there.
Our friends at RSM US, formerly McGladrey, gave us some information about funds set up for the benefit for the children of the late Flavio Castillo. Flavio died suddenly from pneumonia on March 8.
The family has asked that donations be made to fund their children's education in lieu of flowers or other gifts. Here is the information from the family:
Checks need to be written specifically for the children's education trusts - they have 3 children, Maximo is 10, Cortez is 7, Aribella is 4 - people can donate to all 3, or just 1 or 2 - but each contribution needs to be specific to a child's trust as follows:
Make checks payable to "Griselda Castillo for the benefit of Maximo Castillo Education Trust" "Griselda Castillo for the benefit of Cortez Castillo Education Trust" and/or "Griselda Castillo for the benefit of Aribella Castillo Education Trust"
Mail all checks to:
Robert H. Lang
Thompson Coburn LLP
55 East Monroe Street
37th Floor
Chicago, IL 60603
It will be a busy week in Boca if yesterday was any indication. I will be working on my recovery from back surgery at the pool, while also working on my tan.
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Duco and CME Group Team Up to Provide Innovative Data Control Service to Member Firms
Duco
Duco Technologies, a global fintech provider of award-winning data control services, and CME Group, the world's leading and most diverse derivatives marketplace, today announced a pioneering agreement to dramatically transform its member firms' fee control processes. The agreement, announced at the 41st Annual International Futures Industry Conference in Boca Raton, Florida, represents the first exchange offering of its kind.
goo.gl/ONhCRh
***** This must be important because of all the words they used.
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Let's Pause a Moment: Keith Ross Talks Dark Pool Rules and IEX
JohnLothianNews.com
The addition of high speeds and multiple execution venues has altered the equity market structure in recent years. Now, the SEC is weighing in with newly proposed rules on dark pools. Meanwhile, IEX, which rose to fame with Michael Lewis' "Flash Boys", is trying to move from dark pool to full-fledged exchange. Keith Ross of PDQ ATS says transparency is a good thing, and a market pause has its benefits in alternate venues, but as an exchange, could create chaos.
Watch the video »
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HKEX Publishes its Annual Fact Book
HKEx
Hong Kong Exchanges and Clearing Limited (HKEX) has published its annual fact book on the HKEX website. HKEX Fact Book 2015 presents a wide range of statistics from HKEX's securities and derivatives markets as well as the London Metal Exchange, which HKEX acquired in December 2012. It also includes market highlights in 2015 and a section on the history of Hong Kong's securities and derivatives markets since the late 1800s.
goo.gl/JOOS2f
***** You can choose your friends, but you can't choose your facts.
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Here's Where the Top 1% Have to Try Least to Make Their Money
Bloomberg
Life ain't bad in the top 1 percent, but in Atherton, California, it's even better: That's where the wealthiest Americans have had to put forth the least effort to accrue those earnings...
Bloomberg ranked the 62 U.S. cities that make up the richest 1% by average household income to see which benefit most from "passive income"Âeffortless returns such as dividends, interest and rental payments.
bloom.bg/1XsrJ8v
****JB: Maybe JLN should relocate.
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Why Is It So Hard to Change How We Manage Ourselves?
Bloomberg
After four years, Medium is giving up on Holacracy, the avant-garde management system it used as an alternative to the traditional office hierarchy.
Just a year ago, the blogging platform was all in on Holacracy. The company invested thousands of dollars in consultants and HolacracyOne's proprietary software, Glass Frog. The employees spoke the language of a post-hierarchy organization. There were no managers or bosses or job titles; people "energized" roles within "circles." Teams held regimented "tactical" and "governance" meetings run by annointed facilitators.
bloom.bg/1Xss8rh
****JB: Good intentions aside seems it is difficult to get away from top-down management styles.
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| Sponsored Content |
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This one-of-a-kind event will showcase concise and engaging on-stage presentations from financial technology leaders like Google Cloud, Tally Capital, Amazon Web Services, Trading Technologies, Rival Systems, CME Group, CBOE Livevol, Quandl, Cantor Exchange, Narrative Science, Nadex, Neurensic, Alpaca and many more as they cover topics such as trading software, cloud infrastructure, artificial intelligence, Bitcoin and Blockchain, binary options, market data APIs, R&D tax credits and much more. Last year's event was a sold-out show and space is limited, so be sure to register today.
To view the event, register, or to learn more, please visit www.fintechchicago.com
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Monday's Top Three
Our top three stories yesterday had a clear leader by a long-shot. Proposed Exchange Chief Carsten Kengeter Was Viewed as Possible Libor Co-Conspirator. A somewhat distant second but still with a lot of readers was the story FACT: Women are better traders. Finally and of perpetual interest to our readers was the blockchain story.Central banks beat Bitcoin at own game with rival supercurrency
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| Lead Stories | SGX looks to tap into China investor wariness
Philip Stafford in Boca Raton - FT
SGX, the Singapore exchange, is looking to capitalise on investors' concerns about direct exposure to Chinese markets by offering a series of equity derivatives based on the popular MSCI indices.
goo.gl/MP9OA0
Lloyd S. Shapley, 92, Nobel Laureate and a Father of Game Theory, Is Dead
By BARRY MEIER - WSJ
Lloyd S. Shapley, who shared the 2012 Nobel Memorial Prize in Economic Science for work on game theory that has been used to study subjects as diverse as matching couples and allocating costs, died on Saturday in Tucson. He was 92.
goo.gl/D8WhNm
ASX boss Elmer Funke Kupper needs to set the record straight
Elizabeth Knight - SMH
Explosive allegations of a $200,000 payment to the family of the Cambodian Prime Minister Hun Sen by Tabcorp in 2010 during the reign of the now head of ASX, Elmer Funke Kupper, need to be cleared up as matter of urgency.
goo.gl/XxPyQS
Lesson of 2011 overshadows US commodity crackdown
Financial Times
With oil at $40 a barrel and grain in the doldrums, excessive commodities speculation isn't a hot topic. Except in Washington, where a brief, intense drama on the subject just reached its denouement. In an unusual move, commissioner Christopher Giancarlo of the US Commodity Futures Trading Commission on Friday withdrew a report that criticised as needless and unworkable the agency's controversial proposal to cap speculators' positions in commodity futures. The report was written by two members of the CFTC's Energy and Environmental Markets Advisory Committee, which is sponsored by Mr Giancarlo.
goo.gl/WPXkAu
Shorting Oil to Hedge Credit; Hedge funds that own energy debt have been shorting the oil market as a way to hedge against further declines in the bonds
By CHRISTIAN BERTHELSEN - WSJ
Some of the biggest bears in the oil market this year have been investors who are actually hoping to see the market recover.
goo.gl/lXUdj4
Life after FX: The sky is the limit
Euromoney
Foreign-exchange professionals are feeling the brunt of banks' deep cuts to sales and trading desks, but don't get disheartened: the shake-up of the industry offers exciting new opportunities.
"Life after FX? I've heard of people who just end up driving taxis." Perhaps not the most heartening response from a former FX trader, but it is a bleak reality for some individuals. A job in banking has never been a job for life - the sector is notoriously cyclical and performance-driven - but the transformation of the foreign industry, coupled with never-ending regulatory probes, is leaving some to ponder their options.
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NSE and SGX to launch the world's first offshore Indian sector futures
SGX
India Index Services & Products Limited (IISL), a National Stock Exchange (NSE) group company, and Singapore Exchange (SGX) today announced their intention to introduce futures on Indian sector-specific index futures on SGX. This is the first time that derivatives on Indian sector indices are being launched outside India.
goo.gl/bHuNWg
Brexit and the practical implication for capital markets. An ICMA paper.
Eurex
The International Capital Market Association (ICMA) has published a paper on the practical implications for financial institutions involved in the capital markets, in case the UK leaves the EU after the referendum on the 23 June 2016.
goo.gl/6GGUdX
Bill Gross is cleared to pursue $200 million Pimco lawsuit
Reuters
Bond manager Bill Gross will be able to pursue his lawsuit to recoup at least $200 million he claims that Pacific Investment Management Co owes him in the wake of his 2014 ouster from the firm he co-founded. California Superior Court Judge Martha Gooding ruled late Sunday that Gross' breach-of-contract lawsuit was strong enough to proceed.
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| | | | Regulatory | | For more regulatory, visit MarketsReformWiki, our website focused on current market reform efforts. | SEC must stand up to fund manager bullies
FT
The title of the Securities and Exchange Commission's autumn consultation document on fund management  "Proposed Rule: Open-End Fund Liquidity Risk Management Programs"  hardly hints at firebrand stuff. And, in the ensuing 415 pages of often technocratic proposals, the regulator suggests some sensible mechanisms to mitigate the fast-growing risks in the fast-growing asset management industry. But this could be a big moment for the SEC after a decade of decreasing relevance and blows to its reputation. Pre-crisis, it missed the warning signals before the collapses of both Bear Stearns and Bernard Madoff's Ponzi scheme. Post-crisis, it brought embarrassingly few charges against senior Wall Street executives. It has struggled for credibility ever since, sidelined by more aggressive authorities.
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SEC Nominee Lisa Fairfax Is Diversity Advocate and Law Professor; Fairfax has written extensively in favor of shareholder rights, shareholder activism, and gender and racial diversity on corporate boards
By ANDREW ACKERMAN - WSJ
Lisa Fairfax wasn't the White House's first choice to fill a vacancy at the nation's securities regulator. But the 45-year-old law professor will appear before Congress Tuesday as the nominee for the slotÂand an emblem of the struggles roiling the Democratic Party over its ties to big business and the best approach to regulate finance.
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SEC Approves 2016 PCAOB Budget and Accounting Support Fee
Press Release
The Securities and Exchange Commission today approved the 2016 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee.
The PCAOB budget totals $257.7 million and will be funded primarily by the collection of an accounting support fee totaling $253.3 million and from the under-spending in 2015 that will be available to fund the 2016 budget.
1.usa.gov/1Xsnmu2
CFTC Staff Provides Relief In Connection With Swap Trade Confirmations
Press Release
The U.S. Commodity Futures Trading Commission's (CFTC) Division of Market Oversight (DMO) today issued a no-action letter extending the time period for relief in connection with swap trade confirmation requirements that previously was provided in CFTC Staff Letter 15-25, which expires on March 31, 2016.
goo.gl/rzLTa8
AIG Affiliates Charged With Mutual Fund Shares Conflicts
Press Release
The Securities and Exchange Commission today announced charges against three AIG affiliates for steering mutual fund clients toward more expensive share classes so the firms could collect more fees. The firms agreed to pay more than $9.5 million to settle the SEC's charges.
1.usa.gov/1Xso4re
China Drafts Rules for Tobin Tax on Currency Transactions
Bloomberg
China's central bank has drafted rules for a tax on foreign-exchange transactions that would help curb currency speculation, according to people with knowledge of the matter. The initial rate of the so-called Tobin tax may be kept at zero to allow authorities time to refine the rules, said the people, who asked not to be identified as the discussions are private. The tax is not designed to disrupt hedging and other foreign-exchange transactions undertaken by companies, they said.
goo.gl/3DpIhY
All men so far, Sebi board set to see diversity
Business Standard
Market regulator Securities and Exchange Board of India (Sebi) wants to improve gender diversity on its nine-member board. The regulator has asked the finance ministry to replace two of its board members, Prashant Saran and Rajeev Kumar Agarwal, who would complete their term this year, with at least one full-time woman member.
goo.gl/2CSfu9
Cliffs bondholders sue company over bond exchange
Reuters
Iron ore producer Cliffs Natural Resources Inc's bondholders are suing the company over a bond exchange offer in January that was prompted by falling commodity prices, and aimed at reducing the company's debt. The plaintiffs allege that Cliffs only favored larger bondholders to participate in the offering, while reducing the value of notes of bondholders who were not eligible to participate.
goo.gl/9jXkuu
FCA proposes reforms to close 'advice gap'
FT
The UK Treasury and the Financial Conduct Authority want to open up and automate the financial advice industry after seeing evidence that a swath of Britain is worryingly ignorant about money. A new report on how to make financial advice more accessible cited surveys showing that one in five people cannot read a bank statement and that one in three cannot work out what the interest on their savings should be.
goo.gl/AzpwO4
| | | | Exchanges & Trading Facilities | SMU and NUS students emerged winners at nationwide tertiary stock pitch competition
SGX
Three teams from Singapore Management University (SMU) and National University of Singapore (NUS) beat their peers across tertiary institutions and emerged as this year's NUS-SGX Stock Pitch Competition winners at the finals held last night in SGX's auditorium.
goo.gl/Q8Y2Sj
Deutsche Börse Venture Network passes 200-member mark; Sharp rise in number of foreign participants/ Investor Networking for the first time in London and once again in the US
Deutsche Börse
Deutsche Börse Venture Network, Deutsche Börse's programme to fund young growth companies, has passed the 200-member mark nine months after its launch. The Network has gained 31 investors and 10 growth companies since the beginning of this year. Specifically the number of participants from outside Germany, currently at 81, has seen a particularly large increase. In total, there currently are 60 growth companies and 142 investors active in the Deutsche Börse Venture Network.
goo.gl/Ysl3ev
'Foundation' laid for Deutsche Börse-LSE Group merger
Financial News
The holding company created for Deutsche Börse's planned merger with the London Stock Exchange Group comes in the form of a Dutch legal vehicle typically used to thwart rival takeovers.
goo.gl/nj82K6
Closer look at LME aluminum prices reveals anomalies
Reuters
A first glance at aluminum prices on the London Metal Exchange yields few surprises, yet a closer look often reveals anomalies caused by one market participant holding large amounts of metal. Sources at commodity trading houses, warehouses, producers, brokers and banks say recently one such company is U.S. bank JPMorgan. Others have done so in past. JPMorgan declined to comment. "There are no position limits (on aluminum contracts) as such on the LME, if you are financing physical material there are no limits," a metals analyst said. "The LME is a physical market, no rules have been broken."
goo.gl/8yc6cb
'Crowdfunding is growing up': SyndicateRoom just partnered with the London Stock Exchange
Business Insider
Crowdfunding investment platform SyndicateRoom has gained intermediary status with the London Stock Exchange (LSE), meaning it can offer investors access to initial public offerings (IPOs) of companies listing shares on the London stock market through its online platform. Co-founder and CEO Goncalo de Vasconcelos told Business Insider: "What we are doing now is crowdfunding growing up.
goo.gl/XAqJLF
T7 Trading GUI: Changes to the provision of unadjusted open interest and to the handling of flexible instruments
Eurex
Following the introduction of Eurex Clearing's C7 release 3.0, currently scheduled for 9 May 2016, changes to the provision of unadjusted open interest via the Reference Data Interface (RDI)/Reference Data File (RDF) and the T7 Trading GUI will take effect.
/goo.gl/YhWI38
March 2016 Final Foreign Currency Settlement Prices
CME Group
goo.gl/MkSdmz
CME CORE: Swaptions Launch April 11, 2016
CME Group
goo.gl/WeIDKT
CBOE Holdings Announces Date of First-Quarter 2016 Earnings Release and Conference Call
Press Release
BOE Holdings, Inc. (NASDAQ: CBOE) will announce its financial results for the first quarter of 2016 before the market opens on Friday, April 29, 2016. A conference call with remarks by CBOE Holdings, Inc. senior management will begin at 7:30 a.m. Central Time (CT).
goo.gl/LJAFRL
Exchange leaders to size each other up in Boca Raton
Reuters
When top derivatives exchange executives gather in Boca Raton, Florida, this week for a major industry conference, the buzz will be around who is meeting whom in hotel rooms and lobbies as bourses scramble to find partners amid global consolidation.
goo.gl/aKTBbW
World Federation of Exchanges Calls for Vigilance and Coordination as Industry Backs Global Cyber Standards
Press Release
The World Federation of Exchanges (WFE) is the global trade association that represents more than 200 market infrastructure providers including exchanges and CCPs. Each year over $26 trillion in trading is processed by the infrastructure operated by WFE members. Cyber security is a matter of enormous importance to WFE's members, and is vital to the continuing stability of the financial system.
WFE applauds the initiatives undertaken by regulators globally in groupings such as CPMI and IOSCO to further strengthen the safety and resilience of the world's financial system.
Financial Market Infrastructure providers (FMIs) have also been proactive and vigilant as an industry: there are clear incentives to get this right given the extensive negative repercussions on their business of any cyber disruption. The industry's dynamic approach is typified by WFE's Global Exchange (GLEX) Cyber Security Working Group, composed of cyber experts - typically at CISO level - sharing their knowledge and delivering the solid technical foundations for policy formulation.
goo.gl/qAuZfX
Bats Reports Strong U.S. Equities Market Share of 21.4% in February; Tops 70 ETFs Listed on Bats ETF Marketplace; Exchange Group Maintains Strength Across Asset Classes
BATS
Bats Global Markets (Bats) today reported February data. Highlights include the third-best month on record for its U.S. Equities business with 21.4% market share, as well as continued market share strength in its U.S. Options and European Equities businesses.
goo.gl/yZ3sfa
| | | | Politics | Elizabeth Warren: Why Have Wall Street Execs Not Been Prosecuted?
Huffington Post
Answer by Elizabeth Warren, U.S. Senator for Massachusetts, on Quora.
This gags me. I recently put out a report called "Rigged Justice" - highlighting 20 of the worst federal enforcement failures of 2015. In a single year, in case after case, across many sectors of the economy, federal agencies caught giant companies breaking the law -- defrauding taxpayers, covering up deadly safety problems, even triggering the financial collapse in 2008 -- and let them off the hook with barely a slap on the wrist. These companies paid meager fines, which some then handed over to their tax lawyers to see if they could get a tax deduction!
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| | | | Hedge Funds & Managed Futures | | For more, subscribe to the JLN Managed Futures newsletter or visit the Managed Futures section on JohnLothianNews.com. | Scrap-Metal Sector Is Latest Victim of Commodities Bust; As prices drop, junkyard operators stockpile cars instead of shredding them, stalling the auto-recycling industry
By JOHN W. MILLER - WSJ
Cars are piling up at junkyards across the U.S., as the commodities bust that has already bruised mining and metals companies from Ohio to Australia ripples through another sector: scrap.
goo.gl/bZdJnj
The Stocks Hedge Funds Hate Are Performing Better Than Those They Love
Bloomberg
Too bad it isn't opposite day in the world of hedge funds. A new note from Bank of America Merrill Lynch analysts Jue Xiong and Stephen Suttmeier suggests that if a hedge fund says it's bullish on a stock, you might do well to sell it. The top 20 stocks most beloved by hedge funds underperformed the broader S&P 500 index in January, according to BofAML data. At the same time, the 100 that hedge funds are most short were up 4.59 percent in February, outperforming their top 100 longs by the most since BofAML began tracking the data some five years ago.
goo.gl/RwiIZ7
BlackRock Global ETP Landscape Report - Record Flows For Gold And Minimum Volatility
Press Release
In the BlackRock Global ETP Landscape report, the Industry Highlights provides commentary on the global Exchange Traded Product (ETP) industry as of February 2016.
goo.gl/wkwUqD
Investors have renewed appetite for energy bonds
Eric Platt - FT
Investors showed signs of regaining their appetite for energy companies' bonds following the recent rally in oil prices. Orders for a bond offering from Anadarko Petroleum, the US oil producer, exceeded $20bn on Monday, covering underwriter books more than six times, according to three people familiar with the transaction.
goo.gl/zhzc1F
The dangers of a sustained crude recovery
FT
It is not a risk that portfolio managers typically cite as their biggest concern, but the rapid rebound in oil has suddenly raised the question: are higher crude prices a danger? The sharp rise in the price of oil has buoyed the shares and debt of US energy groups since mid-February and coaxed investors to open their wallets and lend to oil and gas drillers. Now some investors are warning that the dazzling rally may have pulled the market ahead of fundamentals  given that the current supply glut may not ease until 2017  and indeed, on Tuesday, this week's retreat in crude gathered pace. Further weakness in the price of oil is seen prompting higher volatility in the sector that spills across bond and equity markets.
goo.gl/kPF1xl
BOJ: The Fallout From Japan's Negative Rates Surprise
By ANJANI TRIVEDI - WSJ
The Bank of Japan wasn't shy when it launched itself into negative interest rates in late January. But now investors are discovering how unprepared it really was.
goo.gl/sfwkk0
Fund managers lose out from benchmarking
John Plender - FT
The past year has not been a happy one for value managers who invest on the basis of fundamentals. Momentum traders who chase short-term trends have, by contrast, been making hay. Yet there is a conundrum about precisely where their profits come from, or rather, at whose expense.
goo.gl/Y047wf
The Koch Brothers Have Started a New Family Office to Quietly Invest Their Fortune
Margaret Collins - Bloomberg
Kochs building a family office to manage part of their wealth; Firm is looking to make direct investments in companies
In the age of Rockefeller, Carnegie and Morgan, a young man named Hotze "Harry" Koch struck out for America to seek his fortune in the nation's free-wheeling markets.
goo.gl/fzSiJJ
Battery-hungry world turns to South America's 'lithium triangle'
Reuters
Far from the soy and cattle that dominate its vast fertile pampas, Argentina harbors another valuable commodity that is rocketing in price and demand and luring newly welcomed foreign investors. Lithium, the so-called "white petroleum", drives much of the modern world. It forms a small but essentially irreplaceable component of rechargeable batteries, used in consumer devices like mobile phones and electric cars. It also has pharmaceutical and other applications. Over half of the earth's identified resources of the mineral are found in South America's "lithium triangle", an otherworldly landscape of high-altitude lakes and bright white salt flats that straddles Chile, Argentina and Bolivia. Until recently, that was not great news for investors.
goo.gl/m6dziv
| | | | Banks & Brokers | SocGen to buy Kleinwort Benson for wealth management push
Financial Times
Two of the oldest names in British banking are to be combined after Société Générale of France said it would buy Kleinwort Benson and merge the wealth manager with Hambros, its private bank. The deal creates one of the largest British wealth managers, with a combined assets under management of more than £14bn and over 1,000 staff.
goo.gl/eEfSd6
Credit Suisse hopes rich mix drives rally
Ralph Atkins in Zürich - FT
To Iqbal Kahn, it is clear that Credit Suisse needs to up its game. With the Swiss bank's shares down 45 per cent since last July  almost double the fall in the FTSE Eurofirst 300 banks index  the head of its international wealth management division sees no alternative to speeding up the strategic overhaul announced last year.
goo.gl/uTy1ME
Goldman Sachs to Buy Honest Dollar, a Small Plan Start-Up
New York Times
Goldman Sachs is adding a little robo to its investment management business, buying Honest Dollar, a digital retirement savings tool aimed at millions of small-business employees who do not have access to traditional employer-sponsored savings plans. Honest Dollar, a year-old start-up based in Austin, connects employees of small and midsize businesses and self-employed workers with individual retirement plans managed by the Vanguard Group for a per-person, per-month fee as low as $8.
goo.gl/tCFbE5
FX clients demand an independent stamp of approval
Joel Clark - Financial News
How can a bank assure its clients that a service it offers is smarter, faster and cheaper than that of its competitors?
goo.gl/s1XEb2
| | | | Clearing & Settlement | Is It Clear Yet? Â Final Countdown To Clearing Of Derivatives In Canada - Finance and Banking
www.mondaq.com
On February 24, 2016, the Canadian Securities Administrators ("CSA") published for comment proposed National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives and its companion policy (collectively, the "Clearing Rule"), which introduces mandatory clearing of certain over-the-counter ("OTC") derivative transactions. A copy of the Clearing Rule is available here. The 90 day comment period for the Clearing Rule expires on May 24, 2016.
goo.gl/TD41Pg
ICAP expands its Post Trade Risk and Information Division MiFID II/MiFIR suite of services
Press Release via email
ICAP (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that its Post Trade Risk and Information division (PTRI) has made a series of enhancements that significantly expand its existing suite of regulatory services to offer customers an end-to-end menu of products which meet MiFIR/MiFID II cross-asset reporting and processing obligations. Additionally, ICAP PTRI is announcing the creation of its own Approved Publication Arrangement (APA) service. PTRI's solutions will also include Abide Financial (a regulatory reporting service provider that ICAP invested in last year), which will provide ICAP access to a MiFID II/MiFIR Approved Reporting Mechanism (ARM) service to complement the overall group reporting strategy.
~/NOLINK
BoE Concerned Over Access to Clearing
Press Release - Marketsmedia.com
The Bank of England is concerned that some small UK firms find it difficult to obtain cost-effective access to central clearing and may decide to cease hedging interest rate risk.
The UK central bank issued its latest annual report of its supervision of financial market infrastructures this month. The Bank supervises four central counterparties in the UK - LCH.Clearnet, part of the London Stock Exchange Group, ICE Clear Europe, LME Clear, and CME Clearing Europe. The value of margin and default funds held by these four UK CCPs to help them guarantee trades was an average of £90.6bn ($131bn) last year. The report covered the period from 14 March 2015 to 4 March 2016.
goo.gl/efV0ci
Markit moves into FX trade affirmation
Press Release
Markit (Nasdaq: MRKT), a leading global provider of financial information services, today announced the launch of a new service that enables banks to affirm FX trades executed by inter dealer brokers. Seven inter dealer brokers and eight banks have signed to use the service, which expands Markit's centralised solutions for the FX market.
/goo.gl/4r35Ty
Bank of China becomes settlement bank for Dubai Commodities Clearing Corporation
LeapRate
Dubai Gold & Commodities Exchange (DGCX) has announced the appointment of Bank of China (BOC), as a Settlement Bank for Dubai Commodities Clearing Corporation (DCCC), a wholly owned subsidiary of DGCX.
Bank of China is the first Chinese bank to be appointed as a Settlement bank for DCCC and would be operating through its Abu Dhabi branch. With the addition of Bank of China, DCCC expands its network of Settlement Banks to five. The lineup already includes Emirates NBD, Standard Chartered, HSBC and Bank of Baroda.
/goo.gl/h55nzt
"Incomplete demutualization" and financial market infrastructure: central counterparty ownership and governance after the crisis of 2008 - 9
Risk.net
Abstract: In this paper, we examine a key conflict between the owners and clearing members of "demutualized" central counterparties (CCPs), in which ownership is separated from clearing participation. Despite the advent of demutualization in the early 1990s, clearing members remain the ultimate underwriters of CCP default risk, a situation we describe as "incomplete demutualization".
goo.gl/5txu0H
| | | | Indexes & Products | Bracketology - Strong Returns for BXMD and CMBO Indexes Since Mid-1986
Matt Moran - CBOE Options Hub
While much of this month's bracketology focus is on basketball tournaments, the chart below shows investment returns for eight benchmark indexes since mid-1986. The chart includes four benchmark indexes (introduced in 2015) that invest in S&P 500® (SPX) options. In the chart the top two indexes in terms of annualized returns were the CBOE S&P 500 30-Delta BuyWrite Index (BXMD) and the CBOE S&P 500 Covered Combo Index (CMBO).
goo.gl/vavp0X
SGX plans to list contracts on MSCI China Free Index
SGX
Singapore Exchange (SGX) today announced its intention to list contracts on the MSCI China Free IndexSM. These new SGX MSCI China Free contracts will further broaden the suite of China-linked risk management products available on SGX, with specific relevance to global institutional investors in China equities.
goo.gl/Svs4mz
BME Will Launch a New Series of Indices on Stocks
Press Release via email
BME expands its indices series with a new family of strategy indices on stocks. Precisely, 16 leverage and short strategy indices will be created with factor 3 and 5 and based on the listed stocks: BBVA, Inditex, Santander and Telefónica.
The new indices will start to be calculated and disseminated in real time from April 12th
How BlackRock Took a Shine to a Competitor's Gold ETF
By LESLIE JOSEPHS - WSJ
BlackRock, whose popular exchange-traded gold product briefly suspended the creation of new shares earlier this month due to an administrative error amid a surge in demand, has been making a hefty bet on a gold ETF lately.
goo.gl/yHARf1
Invesco PowerShares expands capital markets team
Reuters
Invesco PowerShares, a unit of investment manager Invesco Ltd, appointed Jim Goldie and Michael Delew to its capital markets team.
goo.gl/n49Kky
TrackInsight partners with trading platform for ETF liquidity push
Investment Week
Koris International has teamed up with European trading facility Turquoise to launch a new trading segment aimed at building liquidity across the European exchange traded funds (ETF) market through its TrackInsight platform. Together, the companies have launched a facility called Turquoise TrackInsight, which will pair European ETF investors with ETFs rated three stars or higher by Koris's ETF analysis platform TrackInsight. The firm said the product aims to offer a best selection and best execution framework ahead of the implementation of the Markets in Financial Instruments II directive in January 2018.
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| | | | Technology | | For more, visit the Tech/HFT section on JohnLothianNews.com. | CQG adds historical data and research platform Portara to its offering
Press Release via LeapRate
CQG, a global provider of high-performance trade routing, reliable market data, and advanced technical analysis, has added Portara® to its main product suite. This award-winning historical data extraction and research platform includes historical data from the CQG Data Factory.
Portara is a refined scientific tool that enables backtesting, trading, and investigation by professional traders, researchers, and quants. Portara seamlessly delivers historical market data to any third-party backtesting application. It also provides complete historical data for futures, forex, and cash contracts in offline databases. Data is kept current with intraday and daily updates from CQG.
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ICAP's Post Trade Risk and Information division announces completion of a blockchain proof of technology
Press Release via email
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that its Post Trade Risk and Information ("PTRI") division has successfully completed a proof of technology test case for a distributed ledger using blockchain technology. The proof of technology successfully completed on 26 February 2016 and has the potential to significantly transform post trade operations, while complying with new market practices within the post-crisis regulatory environment. Additional information and diagrams are available for reporters attending the FIA Boca conference. Both Jenny Knott, CEO of ICAP Post Trade Risk Information Services and David Thompson, COO of Traiana, are attending the FIA Boca Conference and are available to further discuss this announcement in person. Please let me know if you would like to connect on-site. Best, Stephanie 917.570.8742
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Portware Expands Global FX Team
Press Release via Marketsmedia.com
Portware, a FactSet company and the first and only global provider of multi-asset trade automation solutions powered by artificial intelligence, today announced the appointment of Chris Sorensen as FX Product Manager. Following several recent multi-asset global wins, Sorensen will help drive Portware's continued innovation and growth in the FX space with a particular focus on execution and automation tools for tier one global asset management firms.
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G. H. Financials and Object Trading Bring the World to ASX 24
Press Release
Object Trading and G. H. Financials today announce readily-available direct market access to the ASX 24. G. H. Financials, a leader in order-routing, clearing and settlement services to the world's derivatives markets, has become a conformed broker on the managed DMA (Direct Market Access) service platform of Object Trading, a provider of a global, multi-asset trading infrastructure. Market participants can now easily trade on the ASX 24, with minimal onboarding times, as G. H. Financials' execution, clearing, and risk management infrastructure and related setup processes are in place and already active on the Object Trading platform.
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The Bank of England Is Under Threat From 'Advanced, Persistent' Hackers; The Bank faces a 'substantial' impact risk from any major security breach.
Kit Chellel - Bloomberg
The Bank of England is frequently faced with cyber threats as hackers probe for vulnerabilities in the central bank's computer systems.
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| | | | Enforcement | HSBC freezes at least $87m in accounts linked to China's Sam Pa
FT
HSBC has frozen more than $87m in accounts linked to a Chinese tycoon behind several multibillion-dollar deals in Africa, while it investigates allegations of "serious financial crimes". Accounts controlled by Sam Pa and his business associate Veronica Fung were blocked by the bank a year ago, but its internal investigation is still going, court documents have revealed. Last week, a Hong Kong judge declined Mr Pa and Ms Fung's request that he order HSBC to release the funds, which are "extremely substantial", according to the ruling. One account alone contains $87m, the documents show.
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SEC Charges Microcap Company CEO for Touting Bogus "Clean Energy" Contracts With Foreign Governments
SEC
The Securities and Exchange Commission today charged a microcap company CEO for falsely claiming to have a lucrative relationship with the United Nations and billions of dollars in clean energy contracts with foreign governments. The SEC alleges that RVPlus Inc. CEO Cary Lee Peterson made bogus claims in the company's public filings and in statements to private investors, and that he and RVPlus participated in an unlawful distribution of RVPlus's stock. The SEC temporarily suspended trading in RVPlus securities in July 2013, citing "material deficiencies" in the company's financial statements.
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CFTC Orders Florida-based IBFX, Inc. (f/k/a TradeStation Forex, Inc.) to Pay a $1 Mln Penalty for Failing to Meet Minimum Capital Requirements, Failing to Timely Report Minimum Net Capital Violations, Supervisory Failures & Violating a Prior CFTC Order
Press Release
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Plantation, Florida-based IBFX, Inc. (IBFX), formerly known as TradeStation Forex, Inc. IBFX is a wholly owned subsidiary of TradeStation Group, Inc. and a CFTC-registered Retail Foreign Exchange Dealer (RFED). The CFTC Order requires IBFX to pay a $1 million civil monetary penalty and agree to certain undertakings set-forth in the Order relating to its RFED operations.
1.usa.gov/1XsobD6
| | | | Environmental & Energy | | For more, subscribe to the JLN Environmental/Energy newsletter or visit the blog. | Obama Said to Reverse Atlantic Drilling Policy After Opposition
Bloomberg
The Obama administration is set to scale back plans to open Atlantic waters to a new generation of oil and gas drilling, after a revolt by environmentalists and coastal communities that said the activity threatened marine life, fishing and tourism along the U.S. East Coast.
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Our Broken Environment Kills a Quarter of Us
Bloomberg
The lead in the water in Flint, Mich., is a devastating reminder of how closely human health is intertwined with the environment. While the Flint crisis may be an egregious example of cruelty and neglect, the damaging consequences of a broken environment are all around us, a new tally by the World Health Organization shows.
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| | | | Asia-Pacific | China Tobin Tax Riles Analysts as Citi Warns of Foreign Exodus
Bloomberg
China's draft plan for a tax on currency trading is getting a cold reception in the foreign-exchange market.
Mizuho Bank Ltd. says the so-called Tobin tax on yuan transactions would reduce liquidity in a currency with bid-ask spreads already five times wider than those of the yen. A levy would set back China's push to make the yuan a reserve currency and could heighten investor anxiety over capital outflows, according to Commonwealth Bank of Australia. The proposal is "short sighted" and would drive away foreign investors, Citi Private Bank said.
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Japan Holds Fire On Rate Cuts After Criticism
Fortune
The Bank of Japan chose not to follow the European Central Bank in cutting its interest rates even further Tuesday, but gave a bleak outlook on the economy that suggests it hasn't yet ruled out the possibility.
The BoJ said it will maintain its massive asset buying program at existing levels but offered a bleaker view of the economy, suggesting it may roll out more stimulus as it struggles to reach an elusive inflation target.
for.tn/1XstAdt
Alibaba Affiliate Backs Home-Province Bank's Big Hong Kong IPO
WSJ
The first big Hong Kong initial public offering of the year is getting off the ground with a cornerstone investment by e-commerce giant Alibaba Group Holding Ltd.'s financial-services affiliate among those paving the way.
on.wsj.com/1XstfHr
Global economic uncertainty strengthens outlook for Hong Kong's office market
South China Morning Post
The outlook for continued US economic strength is less certain than in 2015. Doubts about the sustainability of US recovery increased late last year and were reflected in the decline in the US government 10-year Treasury bond yield from December's average of 2.24 per cent to a low of 1.66 per cent on February 11, a move that would traditionally be interpreted as an indicator of increased recession risk.
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China Watchdog Sees Shenzhen Link Feasible in 2016, RTHK Reports
Bloomberg
A start to the stock-trading link between Hong Kong and Shenzhen in the second half of this year is feasible, Radio Television Hong Kong reported, citing a senior official at China's securities regulator.
bloom.bg/1Xstna4
Japan's Biggest Gold Retailer Says Negative Rates Boost Demand
Bloomberg
Japan's negative interest rates are boosting demand for gold, according to the nation's biggest bullion retailer.
International prices have rallied 18 percent this year as investors seek a haven from financial market turmoil. For individual investors, the Bank of Japan's surprise move in January is adding to gold's allure, according to Takahiro Ito, chief manager at Tanaka Kikinzoku Kogyo K.K.'s store in Tokyo's Ginza shopping district. That's helped lift retail prices to their highest since July.
bloom.bg/1XstNgx
| | | | Frontier Markets | Bangladesh central bank governor quits over cyber heist
Victor Mallet, Avantika Chilkoti and Reuters - FT
The governor of Bangladesh Bank has resigned over a $101m cyber theft from the central bank last month.
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Myanmar's new stock exchange prepares for first listing
Reuters
Myanmar's new stock exchange plans its first listing on March 25, the deputy finance minister told Reuters, more than three months after it launched. The Southeast Asian country's economy was devastated by nearly 50 years of military rule and rapid reforms since the junta handed over power in 2011 have included the development of capital markets to help finance growth, such as the new stock market.
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Venezuela Declares It Is Subject To Economic Warfare: And It's Right
Forbes
The President of Venezuela has declared that, as a result of the country being subject to economic warfare, the state of emergency will be extended by another two months. And Nicolas Maduro is indeed correct, that benighted country is indeed subject to economic war. The problem is that it's a war that has been declared and conducted by Maduro against his own population. What ails Venezuela is not the conduct of foreigners, nor even the oil price, but the policies of Bolivarian socialism which have wrecked the essential features of a functioning economy. Thus the solution is not for the President to take more powers to himself to intervene in the economy but for him to stop doing the damn fool things he's already doing.
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