Breaking News

John Lothian Newsletter: NYSE CEO: EU Antitrust Review ‘Fundamentally Flawed’; ICE appoints LME member JP Morgan to advise on potential LME bid; New Rules on Swaps Will Protect Big Traders

Reaction to the recommended rejection of the DB-NYSE merger is loud and varied, including one from the NYSE Euronext CEO that the regulatory review was just plain bad. ICE hires JP Morgan to help them work on a bid for the London Metals Exchange, which is also in today’s news for record-breaking volume announcements, and a quarrel over whether dramatically raising fees right before being acquired is a smart decision. The CFTC yesterday voted to pass rules and proposals regulating swaps, though despite publicity and buzz regarding MF Global, the new rule does not appear to address that type of situation.  Today’s top box contains a JLN Options interview with Mark Abssy of the International Securities Exchange, and the rest of the newsletter is loaded with analyses of Europe’s debt woes, talk of bank personnel cuts, and speeches by regulators.

Observations – Statistics – Commentary

Snow to Occupy Chicago
It is going to snow in Chicago today.  For the first time this season, we are going to get an accumulation of snow.  And the wind is going to blow a lot, which means travel is going to be difficult and some snow drifts will be larger than others.  It is also going to get cold with the wind adding to the chill.  So far this winter, we have had it very easy.  We have had a couple of cold days, but then warm ones to follow.  We have had some snow flurries, but nothing that has stayed on the ground for more than a few hours.  Today that changes.   Today Chicagoans go into winter driving and traveling mode.  If we show up late, or have to leave early it is because of the snow.  For my friends in Chicago, let’s be careful out there.

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CBOE Eyes New Futures On Equities, Bond Yields, Commodities
By Jacob Bunge Of DOW JONES NEWSWIRES
The parent of the Chicago Board Options Exchange is exploring ways to broaden its small U.S. futures market with contracts linked to stocks, bond yields and commodities, according to an executive. CBOE Holdings Inc. (CBOE), which runs the largest U.S. options exchange by contract volume, is looking for ways to bulk up in proprietary futures contracts that carry higher trading fees than stock options.
http://jlne.ws/zVyAeq

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NYSE Euronext launches a new website dedicated to Europe’s regulatory revolution in financial services
Press Release
NYSE Euronext has today launched a new channel on its website dedicated to financial services regulatory policy in the European Union. The site kicks off with a review of the European Commission’s proposals on MiFID II and MiFIR. Aimed at legislators, policy makers, opinion formers and the media, the webpage will provide a new source of information, comment and analysis from a major player in European capital markets.
http://jlne.ws/zoUEGt

**** Hmmm.  Resource for MarketsReformWiki or Competition?  I say resource.

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CME Chief Speaks Out on C.F.T.C. Inquiry
By TERRENCE DUFFY
To expand on the article by Ben Protess and Azam Ahmed on Friday, Jan. 5 (“MF Global Inquiry Turns to its Primary Regulator”), it is no surprise that CME Group is included in the Commodity Futures Trading Commission‘s review. In November, the C.F.T.C. requested that CME Group not conduct its own investigation, but rather take part in the agency’s inquiry, and since then we have worked together closely.
http://jlne.ws/yUh7FX

**** You know he is being serious when his name in all CAPS.

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Johnson: In defence of contingency futures
Why creativity in the industry should be allowed.
Philip McBride Johnson – FOW
This subject provokes sincere soul searching. After all, the line between what is prudent risk management and what is betting is elusive.

The Dodd-Frank Act prohibits futures contracts on movie box office receipts. Why? The producers of films face the same risk as farmers and oil refiners. A bad showing at the theaters has the same commercial impact as a failed crop or a dry drilling hole.

There was a severe backlash when someone proposed the use of derivatives to hedge against terrorist attacks. Yet, massive economic losses resulted – perhaps the terrorists main objective all along. Airlines went bankrupt as passengers feared to fly. Merchants nearby were ruined or forced to move to pricier locations. And the cost to national and local governments was immense.
http://jlne.ws/yneJkc

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Brash commodities trader shakes up MF Global case
By Nick Brown – Reuters
(Reuters) – If Wall Street power broker and politician Jon Corzine is the face of MF Global Holdings‘ collapse, commodities trader James Koutoulas has become the face of its customers. Koutoulas, a 31-year-old Chicago fund manager who has been in the markets for more than half his life, has become a vocal advocate for about 8,000 MF Global brokerage customers who are demanding full return of the money in their accounts.
http://jlne.ws/AduhQi

**** Are there any other kinds than “Brash Commodity Traders?”

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JLN Options: A Talk with Mark Abssy, Senior Index & ETF Manager at ISE on the SPY Bear and Bull Option Overlay Indexes
On December 5, 2011, the International Securities Exchange (ISE) announced that it had created two new indexes, the ISE SPY Bear Options Overlay Index (VCS) and the ISE SPY Bull Option Overlay Index (VPS). The indexes track the performance of a portfolio of vertical call or put spread strategies based on the SPDR S&P 500 ETF. JLN Options editor Sarah Rudolph spoke with Mark Abssy, Senior Index & ETF Manager for ISE, about how the indexes work, what makes them different from what has gone before, and what products will be launched using them as the underlying. 

Q: How do the indexes work and what are some of the ways customers can use these indexes in their trading strategies?

A: Traditionally, people who trade options observe a certain level of volatility, and they have a certain outlook in the near- or mid-term, and they want to not only identify what strategy to use but also to find a single trade, one position that they can track and monitor over time.

The option indexes available now are primarily call or put writing indexes. These indexes are composed of an underlying position and an options position that mirrors traditional options trading with a tied-to-stock trade. Again, both the equity and options elements are components in traditional option strategy indexes.

As you know, ISE is primarily an options exchange, but we also have a small but growing business in the index space. Our goal is not to create benchmarks, like some of the other firms in the index development business, but to create purpose-built indexes to be used as the underlying for investment products. We believe that VCS and VPS fit nicely into that strategy.

When we looked at packaging various options strategies into an index, our goal was to design an index that exhibits the traits of a given strategy but achieves greater diversification than having exposure to a single position.

For the complete interview and in-depth coverage of the options industry, visit the JN Options website at http://jlne.ws/ylC6ZI

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National Futures Association 2011 Annual Review [pdf]
http://jlne.ws/wv0o5d

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Vision Financial Markets Licenses Trading Technologies’ Derivatives Trading Platform
Press Release
CHICAGO, January 10, 2012 – Vision Financial Markets LLC (Vision), a clearing member of the leading U.S. futures exchanges, and Trading Technologies International, Inc. (TT), a leading provider of order-entry software and solutions for professional derivatives traders, today announced that Vision has selected TT’s X_TRADER order-entry software, low-latency exchange gateways, server-based algorithmic execution tools and APIs to provide clients access to the U.S. derivatives markets.
http://jlne.ws/yaYJ0E

**** Vision finally saw the light.

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Analysis: The great hedge fund humbling of 2011
Reuters via Yahoo! News
BOSTON/NEW YORK (Reuters) – Excuses, excuses and more excuses. Some of the best-known hedge fund managers have offered lots of excuses for underperforming the major stock market indexes last year, with many large funds posting double-digit losses.
http://jlne.ws/A0ZlLZ

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Hong Kong Securities Brokers Plan Lunch-Break Protest Today
BusinessWeek
Securities traders and restaurant staff will protest outside the Hong Kong stock exchange offices today over the bourse’s plan to reduce its lunchtime trading break.
http://jlne.ws/yQnbWz

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Another Chicago exchange master blows at PR
Greg Hinz – Crain’s
What is it about Chicago’s masters of the universe — aka the guys who run our big trading exchanges — and their wont to insert foot squarely in mouth?
http://jlne.ws/wGJyd2

**** Excuse me, but this is a BS story.  First off exchange leaders are not “masters of the universe,” so the metaphor is wrong.  Secondly, the State of Illinois has spending problems it needs to solve too, not just tax collection problems.  Bill Brodsky has been outspoken about the budget challenges in Illinois long before the recent tax rate adjustment negotiations.  How about Crain’s pays attention and helps with coverage of the real problem, rather than trying its hand at baloney gotcha journalism.

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MarketsWiki Page of the Day
Bill Templer
http://jlne.ws/yatGGx

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MarketsWiki Recent Updates

People 

Mary ChungJonathan FieldmanJane CroessmannKim BangBill TemplerClark M. Hutchison, IIISteve Grob

Companies, Organizations and Groups

Hong Kong Mercantile ExchangeBroadway Technology, LLCBondDesk Group LLCIndustry Clearing Committee

Statistics

18,133,153 pages viewed, 6,644 articles, 135,532 edits
MarketsWiki Statistics

Lead Stories

NYSE CEO: EU Antitrust Review ‘Fundamentally Flawed’ 
By JACOB BUNGE And ULRIKE DAUER Of DOW JONES NEWSWIRES
The chief executive of NYSE Euronext (NYX) said that European Union antitrust regulators’ analysis of his company’s planned merger with Deutsche Boerse AG (DB1.XE, DBOEF) was “fundamentally flawed,” after regulators recommended blocking the deal.
http://jlne.ws/zZB36A

ICE appoints LME member JP Morgan to advise on potential LME bid
Metal Bulletin
Intercontinental Exchange (ICE) has appointed JP Morgan as its adviser on a potential bid for the London Metal Exchange, market sources told Metal Bulletin.
http://jlne.ws/xd05Qa

New Rules on Swaps Will Protect Big Traders
By BEN PROTESS – NY Times
Wall Street investors will receive significant new protections under a plan adopted by federal regulators on Wednesday, an overhaul that comes in the wake of the collapse of MF Global. But the new rules would not prevent a brokerage firm from repeating MF Global’s mistake of misusing customer money, nor would they apply to any futures industry clients like those of MF Global.
http://jlne.ws/yS4VdV

CFTC Votes 4-to-1 for Rules Aimed at Wall Street Swap Abuse
Bloomberg
U.S. regulators moved to soften Dodd-Frank Act rules designed to protect less-sophisticated customers in swap trades after banks, pension funds and municipalities said the original plan could damage the market.
http://jlne.ws/w90v7k

Investor Confidence in Austria Rapidly Deteriorating: Fitch
International Business Times
A day after re-affirming its top sovereign credit rating on Austrian government bonds, a research arm of respected French credit rating agency Fitch has issued a report noting the rapidly deteriorating level of confidence investors in the derivatives market are displaying towards that country’s debt.
http://jlne.ws/wex3s7

For Europe, Few Options in a Vicious Cycle of Debt
By PETER EAVIS – NY Times
Europe has a $1 trillion problem. As difficult as the last two years have been for Europe, 2012 could be even tougher. Each week, countries will need to sell billions of dollars of bonds — a staggering $1 trillion in total — to replace existing debt and cover their current budget deficits.
http://jlne.ws/x1alm5

Italy’s Monti supports tax on financial transactions so long as it’s on European level
Washington Post
BERLIN – Italian Prime Minister Mario Monti on Wednesday threw his support behind a new tax on financial transactions, backing a push by Germany and France, but said he would prefer to have it apply across the whole European Union. Read full article
http://jlne.ws/wMsdiJ

Europe Banks Hoarding Cash Resist Draghi Bid to Avoid Crunch
BusinessWeek
Banks are hoarding the European Central Bank’s record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region.
http://jlne.ws/wm1B30

EDHEC-Risk Institute Draws The French Government’s Attention To The Inadvisability Of Imposing A Tobin Tax In France
Press Release
http://jlne.ws/A9QdKI

Credit Suisse offers trades for eurozone shorting
By Sam Jones, Hedge Fund Correspondent – Financial Times
Credit Suisse is offering its hedge fund clients off-the-shelf products that allow traders to replicate hypothetical gains made by betting against European stock indices that include equities covered by eurozone short selling bans.
http://jlne.ws/w56vz7

The Coercive Greek Restructuring Is Now Imminent: UBS Explains What It Means For Europe (Hint: Nothing Good)
Zero Hedge
Over the weekend, and before it became a popular topic in the mainstream media and an issue of political debate, UBS first among the “non-fringers” discussed the topic of not only a coercive Greek restructuring (i.e., one in which there is no “agreement” of the bondholders) but that it is, in fact, imminent. Since then, the din over this issue has escalate with reports over the past two days …
http://jlne.ws/zgVoC2

MF Global Customers Wrapped in Red Tape
BY DAN STRUMPF AND JERRY A. DICOLO – WSJ
Stanley Haar says he knew how much money MF Global Holdings Ltd. owed him after about five minutes reviewing old account statements. But completing a claim form, he said, took more than two days. “That’s nuts,” said Mr. Haar, a Boca Raton, Fla. commodity-fund manager, who had about $10 million in customer money—about 10% of the total fund—with MF Global when the firm sought bankruptcy protection on Oct. 31.
http://jlne.ws/yPdrlH

Regulators mull more customer protections after MF
By Jamila Trindle
WASHINGTON (MarketWatch) — The Commodity Futures Trading Commission is considering broadening protections for customer money in both the over-the-counter derivatives and futures markets after the failure of futures firm MF Global left customers short as much as $1.2 billion.
http://jlne.ws/z96hwI

MF Global customers meeting with trustee on claims
Associated Press
Customers of MF Global Inc., the brokerage firm led by Jon Corzine that imploded into bankruptcy, are meeting publicly with the court-appointed official overseeing the unwinding of the firm and customers’ claims to money.
http://jlne.ws/xYTaUJ

Environmental Trading News

Cleared Carbon Volumes Surged on ICE as EIB May Have Begun Sales
Bloomberg
The volume of carbon contracts cleared on the ICE Futures Europe exchange more than doubled in the period since Dec. 1 as the European Investment Bank may have started selling 2013 contracts for the first time.
http://jlne.ws/zoVOWd

China looks at carbon tax, official says in US
AFP via Yahoo! News
China’s lead negotiator on climate change said Wednesday that the world’s largest emitter is considering imposing a tax on carbon to reduce the use of dirty energy as its economy grows.
http://jlne.ws/AtSxRq

EU to Open Tender for Temporary CO2 Platform This or Next Month
Bloomberg
The European Union plans this or next month to open a tender for a transitional platform to carry out sales of carbon allowances for airlines and early auctions of post-2012 permits for manufacturers and power plants.
http://jlne.ws/wuAcFh

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf. 
Visit http://www.jlnenvironmental.com to subscribe.

Exchange & ECN News

D Börse and NYSE stung by EU rejection
By Jeremy Grant and Alex Barker – Financial Times
A keen beekeeper, Duncan Niederauer was relieved recently to find that his hive had survived a particularly bitter winter in upstate New York. But when the chief executive of NYSE Euronext met his counterpart at Deutsche Börse, Reto Francioni, in New York on Wednesday, there was less good news from his day job.
http://jlne.ws/wXUSMV

Q&A: Is Europe right to block NYSE-D Börse?
By Jeremy Grant and Alex Barker – Financial Times
Q. Why are these two exchanges trying to merge – aren’t exchanges big enough these days?
A. Deutsche Börse and NYSE Euronext have argued that creating the world’s largest exchange for derivatives trading and company listings will give them “global scale” at a time when trading activity is increasingly global.
http://jlne.ws/zHCzKM

NYSE-Boerse: Five Possible Options
By Michelle Price Of FINANCIAL NEWS
The news that European Union regulators have preliminarily rejected the proposed landmark merger between NYSE Euronext (NYX) and Deutsche Boerse AG (DB1.XE), despite a range of remedy packages, leaves the two exchanges with few options.
http://jlne.ws/ykNF6X

NYSE, Deutsche Boerse Face Questions As Deal Nears Brink 
By Jacob Bunge and Ulrike Dauer Of DOW JONES NEWSWIRES
NYSE Euronext (NYX) and Deutsche Boerse AG (DB1.XE, DBOEF) will be forced to rethink fundamental aspects of their plans to grow trading services if the European Union nixes their deal, which investors and analysts see as increasingly likely.
http://jlne.ws/wfHNuY

Fairer future for exchanges
Financial Times
A moment may have been reached with the decision of Europe’s competition commissioner, Joaquin Almunia, to block the proposed tie-up between Deutsche Börse and NYSE Euronext.
http://jlne.ws/wnKWmP

No Big Deal for Deutsche Börse and NYSE
By HESTER PLUMRIDGE – Dow Jones
Nice try, but no dice. The European competition authority has effectively scuttled a planned $17 billion merger between NYSE Euronext and Deutsche Börse, recommending the deal be blocked on antitrust concerns. That is a blow for both groups, which between them own the New York, Frankfurt and Paris stock exchanges. But investors shouldn’t lose sleep over it.
http://jlne.ws/y7601W

LME Directors Oppose Proposal to Raise Trading Fees in Letter
BusinessWeek
Three directors of the London Metal Exchange wrote to members of the world’s biggest metals bourse opposing a plan to increase trading fees before a potential takeover, a person familiar with the letter said.
http://jlne.ws/wDOznT

LME faces revolt over fee increase
By Jack Farchy in London – Financial Times
Some members believe Martin Abbott, LME chief executive, is pushing for a sale because he stands to receive a large pay-out The chief executive of the London Metal Exchange faces a revolt from some of the most senior figures in the metals industry after he pushed through a sharp increase in trading fees last month.
http://jlne.ws/xvXJCo

LME volumes surge to new record in 2011
Press Release
The London Metal Exchange (LME) announced new records for volume and value of trading in 2011, strengthening its position as the world’s premier metals exchange.
http://jlne.ws/yLRYnO

BATS Scores the Listings for Eight BlackRock ETFs
BY JACOB BUNGE – Dow Jones
BATS Global Markets Inc. has struck an agreement with asset manager BlackRock Inc. to list eight new exchange-traded funds, the first primary listings to be landed by the Kansas City, Mo.-based exchange group as it tries to expand its profile.
http://jlne.ws/xcfsmj

EEX Review of 2011 – EEX asserts itself in a difficult market environment – Boom in short-term trading – Natural Gas Market reaches record level
http://jlne.ws/ybg5Km

Countdown to Turkdex’s New Trading Platform!
Press Release
TurkDEX’s new trading platform, which we plan to launch in 2012, is now available to testing by our members. Our members participating in the new system test can place orders either by using their own systems through the users screens or FIX API. In addition, they can calculate detailed risk exposure with globally recongised SPAN (Standard Portfolio Analysis of Risk) methodology. Currently, we are testing the new system’s performance in cases of high frequency order entry and high trading volume.
http://jlne.ws/zJsSZu

CME Group Clearing Advisory
Clearing House Report Changes
http://jlne.ws/x4T1n8

CME Group Clearing Advisory
CME OTC IRS Liquidity Add-On Implementation
http://jlne.ws/y06zOu

CBOE, C2, CFE, and CBSX Trading Schedule for Martin Luther King, Jr. Holiday
http://jlne.ws/xd0naQ

NASDAQ Announces End-of-Month Open Short Interest Positions in NASDAQ Stocks as of Settlement Date December 30, 2011 
http://jlne.ws/z4isHm

During The January Holidays Total Trading Volume Of The MICEX-RTS Markets Reached RUB2.4 Trillion
Press Release
http://jlne.ws/xQBDQJ

ROFEX Ended The Year With A Significant Annual Trading Growth
Press Release
http://jlne.ws/A7X13g

Banks, Brokers & Dark Pools

Accounting Rules Threatening To Buffet Bank Earnings, Again
By Katy Burne Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–Accounting rules that helped U.S. banks list billions of dollars in nominal gains on derivatives in the third quarter of 2011 may force some banks to post losses for that line item in the fourth quarter. The losses, paradoxically produced because the value of the banks’ bonds rose in recent weeks, threaten to knock bank stocks off course just as they are just gaining momentum going into quarterly earnings later this week and next.
http://jlne.ws/wuzPbT

Equity Markets Will See Less Of The Same — Instinet
Forbes
With mediocre returns and money moving out of equities to fixed income, some financial firms are merging or dropping their equities operations. Overcapacity and the high cost of keeping up with market leaders have been a problem in the last two years or so.
http://jlne.ws/xWh82b

Goldman Sachs Trading Chiefs Join Partner Exodus as Profit Sags
BusinessWeek
Goldman Sachs Group Inc. said two leaders of its biggest division are leaving the company a week before it reports what some analysts predict will be the lowest annual profit since the firm went public.
http://jlne.ws/zhKVVA

Goldman departures a sign of higher turnover
By Tom Braithwaite and Telis Demos in New York – Financial Times
Two of Goldman Sachs’ four co-heads of securities trading are leaving in a fresh sign of heightened staff turnover at the bank, which is facing pressure on its traditional sources of profit.
http://jlne.ws/yM7UGS

Vikram Pandit’s Recent FT Op-Ed Proposes A Totally New Way For Regulators To Measure Capital Requirements
Business Insider
Citi CEO Vikram Pandit wrote an Op-Ed for the Financial Times about regulation called ‘Apples vs. apples – a new way to measure risk.’ The piece tackles capital requirements, and proposes a new way to measure them industry-wide.
http://jlne.ws/z8hExs

Pandit’s Risk Idea Makes ‘No Sense,’ Bove Says: Tom Keene
BusinessWeek
Financial institutions shouldn’t be required to measure risk against a benchmark portfolio because it makes no sense, said Richard Bove, an analyst at Rochdale Securities LLC, in reaction to comments from Citigroup Inc. Chief Executive Officer Vikram Pandit.
http://jlne.ws/yoInnU

Deutsche Bank Said to Choose Asset Management Sale After Bids
BusinessWeek
Deutsche Bank AG executives decided to pursue a sale of asset-management units after they were satisfied with early interest in the business, according to two people with knowledge of the matter.
http://jlne.ws/zcwqvN

Raymond James buys Morgan Keegan in $930 million deal
St. Petersburg Times
By Jeff Harrington, Times Staff Writer Wednesday, January 11, 2012 St. Petersburg-based Raymond James Financial is buying Morgan Keegan & Co. from Regions Financial for $930 million, creating one of the largest wealth management and investment banking firms not headquartered on Wall Street.
http://jlne.ws/yM7q87

BNY Mellon, Regulators Not Talking Dollars
CNBC
There is no guarantee that BNY Mellon and the U.S. Attorney’s office can reach a settlement agreement concerning allegations the bank overcharged clients for foreign exchange trades, according to a person familiar with the case.
http://jlne.ws/xg2s3O

UBS hires three MSSB advisers in California
Reuters via Yahoo! News
NEW YORK (Reuters) – Advisers Shawn Shafer, James Forsyth and Steven Miller are the third team of advisers UBS said has joined from Morgan Stanley Smith Barney since early December.
http://jlne.ws/w8rAil

Royal Bank of Scotland Cuts 272 Jobs at U.K. Corporate Bank
BusinessWeek
Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, will cut 272 jobs from its U.K. corporate banking unit as slowing growth and rising volatility force Chief Executive Officer Stephen Hester to shrink the lender.
http://jlne.ws/xUCwXz

[Video] RBS Plans to Cut 3,500 Investment Bank Jobs
Bloomberg
Jan. 12 (Bloomberg) — Royal Bank of Scotland Group Plc, Britain’s biggest government-owned bank, will cut 3,500 jobs at its investment bank over the next three years as it jettisons unprofitable cash equities and mergers advisory operations.
http://jlne.ws/y6M1s4

Morgan Stanley Schedules Quarterly Investor Conference Call
Press Release
Morgan Stanley (NYSE: MS) plans to announce its fourth quarter 2011 financial results on Thursday, January 19, 2012 at approximately 7:15 a.m. (ET). A conference call to discuss the results will be held on Thursday, January 19, 2012 at 10:00 a.m. (ET).
http://jlne.ws/zAvLFb

The Royal Bank Of Scotland Group Plc Announces Strategic And Organisational Changes In Its Investment Banking/Wholesale Business
Press Release
http://jlne.ws/A1OuhO

WaMu reorganization plan headed for creditor vote
Reuters
The stage is set for creditors to vote on bank holding company Washington Mutual Inc.’s latest reorganization plan and for a hearing next month on whether a Delaware bankruptcy judge should confirm the plan after she approved a document describing the plan Wednesday.
http://jlne.ws/A2SGrx

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2012/dig011212.htm

Investors hail partial victory on CFTC rules
By Shahien Nasiripour in Washington and Gregory Meyer in New York – Financial Times
The US Commodity Futures Trading Commission has approved a rule to protect swap traders’ collateral, a measure mandated by Congress in 2010 that gained urgency following the collapse of brokerage MF Global and the subsequent vanishing of up to $1.2bn in customer cash.
http://jlne.ws/wfUDX8

CFTC adds protections to customers’ money
Reuters via Yahoo! News
WASHINGTON (Reuters) – The futures regulator on Wednesday adopted new protections for customer collateral posted in swap trades, and said it plans a broader look into client safeguards, as the search continues for hundreds of millions of dollars in missing MF Global customer money.
http://jlne.ws/A0BDde

CFTC Votes 3-2 to Propose Volcker Rule Proprietary Trade Ban
BusinessWeek
The U.S. Commodity Futures Trading Commission proposed limits on banks’ proprietary trading and hedge fund investments under the Dodd-Frank Act’s Volcker rule.
http://jlne.ws/wdG7X9

Opening Statement By Chairman Gary Gensler Before A Meeting Of The Commodity Futures Trading Commission
Press Release
http://jlne.ws/yp1pVB

Statement Of Support By CFTC Chairman Gary Gensler
Press Release
http://jlne.ws/xbEGNp

Opening Statement, Eighth Open Meeting To Consider Final Rules, Pursuant To The Dodd-Frank Act – CFTC Commissioner Jill E. Sommers
Press Release
http://jlne.ws/zQslJo

“That It Was All Very Complicated.” – Opening Statement Of CFTC Commissioner Scott D. O’Malia, Open Meeting On Three Final Rules, One Proposed Rule, And One Delegation Of Authority Order
Press Release
http://jlne.ws/xmwRrs

“What About MF Global?” Statement Of CFTC Commissioner Scott D. O’Malia
Press Release
http://jlne.ws/xHWM1k

Prohibitions And Restrictions On Proprietary Trading And Certain Interests In, And Relationships With, Hedge Funds – Statement Of CFTC Commissioner Scott D. O’Malia, January 11, 2012
Press Release
http://jlne.ws/xCX6cG

Opening Statement Of Commissioner Mark Wetjen For The CFTC Open Meeting On January 11, 2012
Press Release
http://jlne.ws/zScfTm

Open Meeting Of The Commodity Futures Trading Commission, Statement By Commissioner Bart Chilton
Press Release
http://jlne.ws/xgeJ2q

Opening Statement At SEC Open Meeting: PCAOB Proposed Budget And Accounting Support Fee For 2012 By SEC Chairman Mary Schapiro
Press Release
http://jlne.ws/yCU4Jw

Statement At Open Meeting To Approve PCAOB Budget By SEC Commissioner Luis A. Aguilar
Press Release
http://jlne.ws/xqsUUE

SIFMA Statement On CFTC’s Volcker Rule Proposal
Press Release
http://jlne.ws/y9JLgk

SIFMA Statement On Final CFTC Business Conduct Standards
Press Release
http://jlne.ws/xB7ZLS

Japan’s Financial Services Agency And Bank Of Japan: Comments On Volcker Rule Proposal
Press Release
http://jlne.ws/zfIUtJ

IRS watchdog accuses agency of “bait-and-switch”
Reuters via Yahoo! News
(Reuters) – The Internal Revenue Service has persuaded U.S. taxpayers to disclose hidden offshore bank accounts but then sometimes failed to cap the penalties, as promised, an agency watchdog said on Wednesday, accusing the IRS of “bait and switch.” The Taxpayer Advocate Service, an oversight arm of the IRS, wrote in its annual report to Congress that a series of IRS voluntary disclosure …
http://jlne.ws/zo2Ydx

Richard Joseph charged with insider dealing
Press Release
The Financial Services Authority (FSA) has charged Richard Anthony Joseph, with eight counts of insider dealing and two counts of money laundering.
http://jlne.ws/yQ5X7v

Ex-hedge fund chief Drew “Bo” Brownstein gets jail for illegal insider trading
Denver Post
A federal judge in Manhattan on Wednesday sentenced former Denver hedge-fund manager Drew “Bo” Brownstein to a year and a day in prison and ordered him to forfeit $2.44 million made from illegal insider trades.
http://jlne.ws/y2woNG

[ASIC] CBA to change Wealth Package loan comparison rates
http://jlne.ws/xM6Otd

Investments – Indexes – Managed Futures – Managed Funds

Brevan Howard Proves Master of Hedge Funds With Four in Top 100
Bloomberg
When Alan Howard set off for a business trip to India as a young Salomon Brothers bond trader in the late 1980s, colleagues advised against drinking local water. When he got back, the buzz on his trading desk was about the huge tab Howard had run up buying cases of Evian water, according to a person who worked with him at the time.
http://jlne.ws/yh7UEZ

Senrigan, Azentus Hedge Funds Said to Lose Money in 2011
BusinessWeek
Senrigan Capital Group Ltd. and Azentus Capital Management Ltd., two of Asia’s biggest hedge- fund startups since 2009, lost money in 2011 as the region’s funds had their second-worst performance on record, said four people familiar with the returns.
http://jlne.ws/yLUmoq

Hedge Funds Trying to Profit From Greece as Banks Face Losses
BusinessWeek
Hedge funds in New York and London are trying to profit from trading Greek government bonds as European banks brace for losses from a debt swap.
http://jlne.ws/zyGD32

ISDA Unveils Members, Mission Of Industry Clearing Committee
By Katy Burne Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- The International Swaps and Derivatives Association disclosed the members and goals of its Industry Clearing Committee Wednesday as market participants band together to iron out kinks in the way some contracts are processed and to increase the volume of trades cleared overall.
http://jlne.ws/zjyLvD

Pimco’s Gross Raises Treasuries in Fund to Most in 13 Months
BusinessWeek
Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., increased holdings of U.S. government debt to the highest in 13 months on concern risks to the global economy are rising.
http://jlne.ws/wfgxhw

Private-equity industry: A bad rep, but is it deserved?
By Walter Hamilton, Los Angeles Times
Mitt Romney’s rivals slam him as a job destroyer while at Bain Capital; he insists he was a job creator. A study found private-equity deals are neither.
http://jlne.ws/wtlu38

Commodities trading loses its Goldman queen
By Javier Blas, Commodities Editor – Financial Times
The commodities trading industry has lost its queen. Isabelle Ealet, the veteran global head of commodities at Goldman Sachs, has been promoted to co-head of the bank’s powerful securities division. Ms Ealet, a French national who joined the Wall Street bank in 1991 as an oil products trader in London, is known in the natural resources industry as the “queen of commodities”.
http://jlne.ws/A75OIK

Penny Pritzker’s Artemis raises $736 million for real estate investments
By: Alby Gallun – Crain’s
(Crain’s) — A real estate investment firm co-founded by Penny Pritzker has raised $436 million for its first fund, which is expected to invest in a variety of sectors, with an initial focus on distressed debt.
http://jlne.ws/w5b8x2

Three Carlyle founders shared $413m last year
By Dan McCrum in New York and Henny Sender in Singapore – Financial Times
The three founders of Carlyle shared a $413m pay-out last year, focusing more attention on the extraordinary wealth earned by private equity industry executives at a sensitive time in the US presidential election race.
http://jlne.ws/yIDB9G

Powernext Energy Savings: Launch Of The Organised Market For Energy Savings Certificates On 10th January 2012
Press Release
Powernext launched the Energy Saving Certificate (in French “Certificats d’Economies d’Energie” or CEE) organised market on 10th January 2012. This launch follows a study made in close cooperation with the market actors since 2009.
http://jlne.ws/yWnX4L

Potomac Portfolios Lists its Potomac Select Fund on the AlphaMetrix Global Marketplace 
Press Release
Chicago, IL, USA – January 10, 2012 – AlphaMetrix LLC, founder and operator of the AlphaMetrix Global Marketplace (AGM), a U.S. leading edge technology-based hedge fund platform, is pleased to announce that Potomac Portfolios LLC (Potomac) has listed its Potomac Select Multi-Manager Futures Fund (Potomac Select) as a Transparent Fund on the AGM Platform.
http://jlne.ws/AFwb13

Rapid Ratings hires legal and financial services veteran to lead strategic relations 
Press Release
New York, January 11, 2012 — Rapid Ratings, an independent ratings, research and analytics firm, today announced that Jeffrey Gibb has joined the company as Senior Vice President of Strategic Relations & Head of Legal Operations.
http://jlne.ws/zOUKIx

Amer Sports To Join The OMX Helsinki 25 Index As A Result Of The Semi-Annual Review
Press Release
http://jlne.ws/zOrqRY

Shanghai Stock Exchange High And New Technology Enterprises Index To Be Launched
Press Release
http://jlne.ws/yWEx26

Standard & Poor’s Announces Changes In The S&P/TSX Canadian Indices
Press Release
http://jlne.ws/xgbNrS

Technology News

FFastFill To Provide Full Access To New LME Swap Contracts
Press Release
http://jlne.ws/wmFFn9

Asset Control Strengthens AC Plus With Direct Access To DTCC Corporate Actions Data
Press Release
http://jlne.ws/w9nLye

KVH Joined As A Solution Provider For Amazon Web Services In Japan – Offering Low Latency And Highly Reliable Network Services For AWS Direct Connect
Press Release
http://jlne.ws/xxZF65

Barclays Selects Leading Collateral and Risk Management Solution From Rockall Technologies
Marketwire via Yahoo! Finance
http://jlne.ws/yhVM4S

The smart technology loser folds
By John Gapper – Financial Times
Eastman Kodak’s last big investor meeting ended with its executives trying to finish while a shareholder shouted at them: “You guys have no credibility. Zero.” Since then, things have got worse.
http://jlne.ws/zZ6lFX

Media News

Big Banks Struggle to Help Customers on Twitter
By ANN CARRNS – NY Times
Twitter is proving to be a vexing customer service tool for big banks, says a new report from Javelin Strategy & Research on banks’ use of social media. Customers seem to like the speed and directness of sending a question or complaint to their bank by Twitter, the report found. But banks must weigh the implications of responding quickly with the need to protect a customer’s personal and financial information, like bank account numbers. As a result, they’re “struggling” with how to best use the service, Javelin found.
http://jlne.ws/wuOteY

Facebook jumps the shark
Commentary: The social-media site has unfurled empty ‘innovation’
By Jon Friedman, MarketWatch
NEW YORK (MarketWatch) — Facebook is really getting on my nerves. I’ve griped about the endless, useless tinkering on the Facebook home page, which made it more time-consuming, at first, to navigate. Back then, I surmised that Facebook was doing something — anything — to look fresh so it could fend off the much hyped emergence of Google+.
http://jlne.ws/yYpOC3

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cmegroup.com/tools-information/calendars/

Asia-Pacific News

China names offshore renminbi bond issuers
By Simon Rabinovitch in Beijing and Robert Cookson in Hong Kong – Financial Times
China has granted 10 banks quotas to sell a large batch of offshore renminbi bonds, the first time it has publicly announced such a list of issuers.
http://jlne.ws/w05TfH

South Korea to Start OTC Derivatives Clearing House to Cut Risks
BusinessWeek
Korea Exchange Inc. plans to start a clearing house for over-the-counter derivatives trading in the fourth quarter as Asia’s bourses join global efforts to reduce risk in the largely unregulated market.
http://jlne.ws/xWIByg

China Central Bank Reiterates Interest Rate Pledges
CNBC
China’s central bank reiterated its pledge to further liberalize the country’s interest rate market on Thursday, restating its support for a market-based system to set deposit rates, lending rates and associated derivatives.
http://jlne.ws/wsvKVO

Further banking lay-offs expected in Asia
By Henny Sender – Financial Times
Headhunters in Hong Kong say the lay-offs announced in the past few months in Asia’s banking industry are just the beginning and expect there will be far worse to come, predicting the total size of the sector in the region could shrink by more than 20 per cent.
http://jlne.ws/yCPrl1

Goldman Sachs Names Paradise, Ueda to Run Securities in Asia
BusinessWeek
Goldman Sachs Group Inc., the U.S. bank that gets more than 60 percent of its revenue from trading, named James R. Paradise and Eiji Ueda co-heads of the firm’s securities division in Asia.
http://jlne.ws/AwE72M

HKEx And CFFEX Sign MOU
Press Release
http://jlne.ws/zMUgKR

Thai Bourse Launches Trading Alert List As A Trading Warning
Press Release
http://jlne.ws/wSvw9A

Thai Futures Exchange Launches 2012 Investor Expansion Plan
Press Release
http://jlne.ws/A9pGOj

[TSE] New ETF to be Listed on Mar. 30, 2012 (Fri.) – Nikko Asset Management Co., Ltd. “Listed Index Fund Emerging Bond”
http://jlne.ws/zHQENO

Shenzhen Stock Exchange Successfully Attained The CMMI Level 3 Certification Again
Press Release
http://jlne.ws/y8w2nS

Tokyo Commodity Exchange: Changes In The Design (Serial No. And The Surface In Back) Of Deliverable Grades
Press Release
http://jlne.ws/yKNAkC

Frontier Markets

Dubai Brokers Choose Sandwiches Over Stocks as Volume Sinks
BusinessWeek
Three years after the Dubai bubble burst, its financial industry is still in decline and shows little sign of recovery. While the emirate successfully restructured debt and invested in transport and tourism, the number of employees in the Dubai International Financial Centre fell to 11,331 in July of last year from 11,436 in 2009.
http://jlne.ws/yh31X0

Emerging Markets Mobile Banking Runs Ahead Of Google Wallet
Forbes
Mobile phones have changed banking faster in emerging markets than in developed countries, so they may provide an indication of where hot tech like the Google Wallet might go if it ever catches up with South Africa, Kenya or Bangladesh.
http://jlne.ws/Asqwuu

Reversal of Fortunes in Debt Market
By NATASHA BRERETON-FUKUI – WSJ
From Brazil to Indonesia to the Philippines, emerging-market countries are pouring into the bond market, taking advantage of soaring investor demand to sell debt at record-low interest rates.
http://jlne.ws/Apr5oW

Miscellaneous News

Sallie Krawcheck: ‘My Days At Merrill Lynch Were Like The Tower Of Terror’
Business Insider
Krawcheck, who was unceremoniously ousted from the Charlotte, North Carolina-based bank last September, described her career as one of the “most dramatic” and said she learned every lesson the “hard way.”
http://jlne.ws/zjzLam

Hostess, Maker of Twinkies, Files for Bankruptcy
By BEN PROTESS – NY Times
Hostess Brands, the baking company best known for its sweet treats like Twinkies and Ding Dongs, filed for bankruptcy just three years after emerging from an earlier restructuring process.
http://jlne.ws/A7GLt7

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About Author

Matte is chief operating officer of John J. Lothian & Co. He edits the John Lothian Newsletter, JLN Forex and MarketsWiki.