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John Lothian Newsletter: Derivatives exchanges push back on reform; Nasdaq to Seek SEC Approval for Facebook-Related Compensation to Brokers; E.U. Proposes Centralized Banking Regulator

Members of the derivatives industry in the U.S. are digging in against new regulations over exchange volume requirements, saying the new rules would force the closure of low-volume contracts, and ruin new product innovations and offerings. Nasdaq, after its less-than-impressive hosting of Facebook’s stock debut, has requested permission to begin apologizing financially to brokers who claim harm from the process. Eurozone officials, in a “we must all hang together” moment, are proposing to give up fully sovereign control of their banking systems in favor of a community model. In the First Read section, you’ll find more analysis of MF Global’s pre-implosion activity, both frantic and sneaky; a reprise of’s interview with Dan Hart of Cortland Fund Services, for those who missed it yesterday; and the first part of Doug Ashburn’s JLN FX Newsletter commentary about the repetitive sound that bears and whales make in the financial markets.

First Read

To Avoid Raising Capital, MF Global Moved Around Debt
New York Times
Facing pressure increase its capital cushion last summer, MF Global moved some of its risky European debt holdings to an unregulated entity, according to a report.
**JK – I’m all for moving debt around and around and…


The Real Bombshell in the MF Global Post Mortem
Naked Capitalism
The report Giddens released Monday is thorough and confirms many of the observations made in journalistic accounts of the firm’s collapse, particularly regarding inadequate risk and accounting controls, JP Morgan’s aggressive posture greatly increasing the liquidity squeeze. It also makes clear that this is an interim report, and unlike the trustee’s report on Lehman, says that reaches no conclusion regarding legal strategies, including whether prosecutions are warranted. But a stunning revelation that comes early in the account and is central to the failure of the firm does not get the emphasis that it warrants.


Fidessa Continues Global Expansion With Additional Appointments
Fidessa group plc, provider of high-performance trading, investment management and information solutions for the world’s financial community, has today announced its continued growth in the futures and options space with strategic personnel hires. Fidessa added two seasoned industry veterans to the team with expertise in the financial technology and derivatives trading space. Yuriy Shterk joined as Senior Product Manager and Michael Wilkins as Trader Support Specialist.


Wonkbook: Can we have ‘just enough’ Europe?
Washington Post
The choice facing European leaders can be boiled down to five words: More Europe? Or less Europe? Germany has begun talking about “more Europe”: They’re hinting at a “bad bank” structure in which Europe’s worst debts would be collected in one place and paid off over 25 years; continent-wide regulation over the financial system; more help from the European Central Bank; more centralized control …
**JK – Or, too much Europe.


On Wall St, few places to hide as jobs ax hovers
Reuters via Yahoo! News
Wall Street bankers are bracing for another round of job cuts as a downturn in the global economy cuts into earnings from dealmaking, capital raising and lending. Investors, consultants and analysts say that the big banks are just not bringing in the revenue needed to keep their workforces at current levels, especially given the cost of complying with new regulations.
**JK – The ongoing unintended consequences.


Fiscal Policy Challenges Policymakers
Clarke Camper – Inside the Beltway
Washington is preparing for renewed debate on America’s long-term economic outlook, as Congress faces increased pressure to reach agreement on a sustainable fiscal framework to avoid the so-called “fiscal cliff” — or, as some call it, “taxmaggedon”.
**JK – Oh, another re-run.


Why Supervising the Financial Sector Really Matters
The Globalist
When it comes to the role of government in regulating markets in the wake of the recent crisis, it is regulation of the financial sector that is of greatest interest. Stability is fundamental to a well-functioning financial system.


Appsurd: In Silicon Valley, It’s Hard to Make a Joke
Last fall, digital designer Alex Cornell had an idea for a spoof on Silicon Valley. While goofing off at work, he made a video to promote an imaginary iPhone app he called Jotly that lets people assign grades to anything they can photograph: tree leaves, messy desks, ice cubes, whatever. The thought was: “Let’s think of the most ridiculous possible app that no one would ever consider a real thing, and make that,” says Mr. Cornell. Silicon Valley took his joke seriously.

***JM: It’s the age-old conundrum, genius is often marked by ideas that are ridiculed for their impracticality or apparent wrong-headedness. Unfortunately, those are also the hallmarks of genuine stupidity.

Dan Hart of Cortland Fund Services Discusses Series Trusts
As the push into managed futures mutual funds continues, we sat down with Dan Hart, managing director with Cortland Fund Services to talk about his firm’s entrance into the series trust space. Cortland is launching its first series trust called the Cortland Cottonwood Series Trust. Hart spoke with JLN Managed Futures editor Jim Kharouf about why Cortland has moved into the series trust arena, how it works and why institutions and CTAs are showing interest.


Bears, Whales, and the Sound of History Repeating
By Douglas Ashburn

Columnists love the “significant anniversary” storyline, as it is an easy one by which to reflect upon past events, tie the past to the present, and perhaps offer a vision of the future. The anniversary template becomes even more enticing if the columnist has been out sick until just before the deadline, as the story often writes itself.

This week marks the fifth anniversary of the event which many would say was the tipping point in the U.S. economy and the beginning of the financial crisis. On June 7, 2007, Bear Stearns, America’s “most admired”  securities firm according to Fortune Magazine, reported that it would be suspending redemptions on a subprime-heavy collateralized debt obligation (CDO) fund.

I highly recommend reading one or two archived news reports from the period, such as this one from BusinessWeek (Bear Stearns’ Subprime Bath, June 8, 2007) and another story from two weeks later, when the fund collapsed, forcing Bear to take a $3 billion writedown (Bear Stearns Fund Collapse Sends Shock Through CDOs, Bloomberg, June 21, 2007). I was quite fascinated as I read the articles. It was clear that, although there was anger among investors, and fear that profit would be dampened for a period, none could see just how severe the fallout would be.

For the rest of the commentary, and daily coverage of global currencies and the economy, visit the JLN FX blog at


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Lead Stories

Derivatives exchanges push back on reform
The U.S. derivatives industry on Tuesday criticized a rule it says would force exchanges to delist hundreds of contracts because of low volume, stifling innovation and damaging market liquidity.

Nasdaq to Seek SEC Approval Wednesday for Facebook-Related Compensation to Brokers – Sources
By Jacob Bunge and Brett Philbin
Nasdaq OMX Group Inc. (NDAQ) officials are telling brokers they plan to submit Wednesday the first step in the exchange group’s bid to compensate investors for the technical glitches that undermined Facebook Inc.’s (FB) initial public offering, according to people familiar with the matter.

E.U. Proposes Centralized Banking Regulator
New York Times
Under growing international and financial market pressure to fix the region’s bank problems, European officials took a step on Tuesday toward surrendering a cherished national prerogative by proposing to knit banking systems together more closely.

After Loss, JPMorgan Regulators in Spotlight
JPMorgan Chase’s regulators will be in the spotlight here on Wednesday, when they testify before Congress on the bank’s multibillion-dollar trading blunder and its implications for the future of Wall Street regulation.

Greece Warns of Going Broke as Tax Proceeds Dry Up
As European leaders grapple with how to preserve their monetary union, Greece is rapidly running out of money. Government coffers could be empty as soon as July, shortly after this month’s pivotal elections. In the worst case, Athens might have to temporarily stop paying for salaries and pensions, along with imports of fuel, food and pharmaceuticals.

Spain says markets closing on it, seeks help for banks
Reuters via Yahoo! Finance
Spain said on Tuesday it was losing access to credit markets and Europe should help revive its banks, as finance chiefs of the Group of Seven major economies conferred on the currency bloc’s worsening debt crisis but took no joint action.

China preparing for Greek exit
CNN Money
China is drafting plans on how to deal with the financial fallout if Greece leaves the eurozone and its economic implications for Beijing’s largest trading partner, according to state-run media.

Ackermann Says Euro Bonds Aren’t Answer for Euro Crisis
Josef Ackermann, the former Deutsche Bank (DBK) AG chief, said joint debt sales would force Germany to assume the funding burden and would take pressure off other euro-area nations to implement changes as they battle a worsening crisis.

Fed Considers More Action Amid New Recovery Doubts
Disappointing U.S. economic data, new strains in financial markets and deepening worries about Europe’s fiscal crisis have prompted a shift at the Federal Reserve, putting back on the table the possibility of action to spur the recovery.

Trustee Battle Heats Up Over Remains of MF Global
The tension between the two trustees fighting over the remains of bankrupt securities firm MF Global Holdings Ltd. intensified after one of them demanded $2.3 billion from the brokerage unit overseen by the other.


Geithner Said to Seek U.S. Bankers’ Dodd-Frank Objections
Treasury Secretary Timothy F. Geithner has challenged bankers to give him specifics on their longstanding complaint that the Dodd-Frank Act is imposing costly, confusing and burdensome regulations on them, according to four people familiar with the matter.

U.S. House Republicans target funding for CFTC
Dairy Herd
U.S. House Republicans proposed on Tuesday spending cuts for the federal commodities regulator and only a modest increase for the securities regulator, prompting outrage from Democrats who pointed to JPMorgan Chase & Co’s $2 billion trading loss as a prime case for greater funding.

CFTC’s Division of Market Oversight Issues Updated Guidebook for Part 20 Reports
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) today issued an updated version of the Guidebook for Part 20 Reports, which provides additional guidance and detailed instructions for submitting large swaps trader reports to the Commission.

Testimony By Federal Reserve Governor Daniel K. Tarullo On Dodd-Frank Act Implementation – Before The Committee On Banking, Housing, And Urban Affairs, U.S. Senate, Washington, D.C., June 6, 2012

[FINRA] Testimony of Chairman and CEO Richard G. Ketchum Before the Committee on Financial Services

[NFA] The Financial Crimes Enforcement Network (FinCEN) Requires Electronic Filing of SARs and CTRs
On February 29, 2012, FinCEN published a Final Notice requiring that all financial institutions subject to the Bank Secrecy Act (BSA) begin electronically filing certain BSA reports effective July 1, 2012. A copy of the final notice appears at As a result, beginning July 1, 2012, FCMs must electronically file Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) and IBs must electronically file SARs through FinCEN’s BSA E-Filing System.

AMF Completes The Incorporation Of ESMA Guidelines On Risk Measurement And The Calculation Of Global Exposure For Certain Types Of Structured UCITS

AMF issues a warning about online guides to high yield investment programmes
The Autorité des Marchés Financiers (AMF) has noted a number of websites that aggregate high yield investment programmes (HYIPs) and offer web users so-called advice on their quality. The sites offer to rate or rank HYIPs according to qualitative and/or quantitative criteria of their choosing.

New Zealand’s Financial Markets Authority Tiered Levy System Introduced

New Zealand’s Government Targets Predatory Share Offers

Exchanges & Trading Facilities

RBC says more study on fees needed in TMX deal
Reuters via Yahoo! News
Royal Bank of Canada, the country’s biggest lender, wants regulators to tighten rules on trading, clearing and settlement fees as part of any deal to approve the Maple Group’s proposed C$3.8 billion ($3.7 billion) takeover of the Toronto Stock Exchange operator.

CFTC Certifies Nine Contracts Submitted By Eurex Deutschland – Contracts May Be Offered To U.S. Persons Through Direct Access Effective, June 5, 2012

Warsaw Stock Exchange Is Recognised By Retail Investors Once Again
The Association Of Retail Investors Has Awarded The WSE For Top Quality Of Its Investor Relations

Warsaw Stock Exchange Cross Order Trade Increasingly Popular

EEX Trading Results in May
In May 2012, the total trading volume on the Natural Gas Market of the European Energy Exchange (EEX) amounted to 4,375,006 MWh (May 2011: 3,017,886 MWh).

EPEX SPOT / EEX Power Derivatives: Power Trading Results in May
In May 2012, a total volume of 29.2 TWh was traded on EPEX SPOT’s auction and intraday markets (May 2011: 25.0 TWh).

Boerse Stuttgart Generates Turnover Of Around EUR 7.6 Billion In May
Increases In Securitised Derivatives, Debt Instruments And Investment Funds – High Trading Volumes In German Government Bonds (‘Bunds’) And Corporate Bonds

Ljubljana Stock Exchange: Monthly Statistical Report May 2012

Burgundy Monthly Report May 2012

New Version of WSEInfoSpace: New Functionalities And Company Profiles
The Warsaw Stock Exchange (WSE) and the Polish Press Agency (PAP) have modified the portal WSEInfoSpace as of the beginning of June. From the perspective of portal users, the key modifications include a new layout and new functionalities. The technology has also been largely modified to facilitate prompt and easy access of users to capital market information, summaries, data, quotations, as well as company reports.

NYSE to Delist the Common Stock of Qiao Xing Mobile Communication Co., Ltd. and File Form 25 with Securities and Exchange Commission

[SIX] Index adjustments on the occasion of the delisting of Synthes N

NZX Monthly Shareholder Metrics – May 2012

TSX Block List Leaders – May 2012

TOM Insight May 2012

Hedge Funds & Managed Futures

Citi Survey Shows Investors’ Interest in CTA and Macro Strategies Accelerated Sharply Following 2008 Financial Crisis
Business Wire via Yahoo! Finance
Investors’ attention to Commodity Trading Advisors and to currency focused Macro hedge funds accelerated in recent years, particularly after the 2008 Financial Crisis, increasing market share to 14% of combined industry AUM at the end of 2011, up from 10% in 2007 according to a survey released today by Citi Prime Finance at the Managed Funds Association’s Annual Conference, Forum 2012 in Chicago.

Vulture funds smell blood from Spanish bank woes
Reuters via Yahoo! News
A flock of “vulture” funds is gathering in Madrid in the hope that a banking sector shakeout will finally deliver a bonanza of real estate and distressed company assets at rock bottom prices.

In Silicon Valley, Weighing the Fallout From Facebook
Though Facebook has been public for less than a month, several top industry players are warning that easy money may not be so easy anymore.

EDHEC-Risk Research Reveals Benefits Of Diversifying Equity Portfolios With Volatility Derivatives
Following the collapse of worldwide equity markets in 2008, and the subsequent rally in long positions in equity volatility, interest has grown in the possible use of equity volatility derivatives as diversifiers for traditional and alternative portfolios.

Blackstone Is Set to Grab Large Portfolio
Blackstone Group LP is poised to take control of the large industrial-property portfolio known as CalWest, making the private-equity firm one of the largest U.S. owners of warehouses, distribution centers and other industrial real estate.

Blackstone raises bet on Asia hedge fund manager Taylor
Reuters via Yahoo! Finance
Blackstone Group has increased its bet on former Citadel trader Nick Taylor by offering him another $50 million to co-invest with his hedge fund which is struggling to make money for its investors, sources with knowledge of the matter said.

Lampert folds up tent in Greenwich, moves hedge fund to Florida
The News-Times
Edward Lampert is the founder of ESL investments, a hedge fund with offices on Greenwich Avenue, and chairman of Sears Holdings Corp. through his fund’s controlling investment in the retail chain’s parent company.

SCARAMUCCI: This Is What A Good Hedge Fund Looks Like These Days
Business Insider
SkyBridge Capital’s Anthony Scaramucci seeds hedge funds, he’s started hedge funds, and he writes (in his new book ‘The Little Book of Hedge Funds’) about – yes – hedge funds.

Demand for German havens remains strong
By Robin Wigglesworth in London – Financial Times
Germany sold E5bn of five-year bonds at a record low yield of 0.41 per cent, despite slightly higher bond yields in the secondary market, underlining the demand for safer assets ahead of a European Central Bank policy meeting.

NY Fed to Sell $7.1 Billion CDOs From Maiden Lane III Next Week
Dow Jones Newswires
The Federal Reserve Bank of New York on Tuesday said it plans to auction $7.1 billion of complex-debt securities next week from a portfolio set up during the 2008 bailout of American International Group Inc. (AIG).

Former Fed Governor Kroszner to Join Hedge Fund EQA
Wall Street Journal Blogs
A former Fed governor, Randall Kroszner, will join hedge fund EQA Partners to advise on currency and macroeconomic investments, the Stamford, Conn., fund said.

Alice T. Kane Joins the Board of PENSCO
Business Wire via Yahoo! Finance
PENSCO, one of the nation’s leading custodians of direct alternative investments in retirement accounts, today announced that Alice T. Kane, an attorney with more than 30 years of legal and regulatory experience in financial services, has joined the company’s Board.

Banks & Brokers

Dodd-Frank’s Derivatives Curbs Won’t Be A Problem For Big Banks, Fitch Says
The biggest U.S. banks are likely to see little impact from a portion of the Dodd-Frank Act that seeks to constrain derivatives activity.

New Fannie CEO Has Bank Baggage
Fannie Mae named its general counsel, Timothy Mayopoulos, as its next chief executive officer after he agreed to a sharp pay cut imposed by the mortgage-finance company’s federal regulator.

Instinet Enhances Newport’s U.S. Derivatives Trading Capabilities
Instinet Incorporated, a global leader in electronic trading and agency- only brokerage services, today announced the completion of the global rollout of the most recent version of its award-winning Newport execution management system (EMS).

Commerzbank Cut One Level by Moody’s as German Banks Downgraded
Commerzbank AG (CBK) , Germany’s second- largest bank, had its credit rating cut one level by Moody’s Investors Service, which cited the risk of fallout from Europe’s debt crisis in downgrading seven lenders in the nation.

JP Morgan losing derivatives trades began in late 2011
Dow Jones Newswires
The JP Morgan trade that lost $2bn or more stemmed from a breakdown in the firm’s risk management activities that started in late 2011, according to the lead examiner of the bank’s group responsible for the losses.

JPMorgan Loss Raises Risk-Management Questions, Curry Says
JPMorgan Chase & Co. (JPM) ‘s trading loss of more than $2 billion raises “questions about the adequacy and rigor” of the bank’s risk-management practices, according to U.S. Comptroller of the Currency Thomas J. Curry.

John Thain, This Is Ken Lewis, We Have to Talk…
Wall Street Journal Blogs
As Merrill Lynchs 2008 problems worsened, Bank of America scrambled for how to handle its planned acquisition and its lawyers scripted a phone call CEO Ken Lewis to tell Merrill CEO John Thain there were doubts about closing the deal.

U.S. regulator says looking at JPMorgan clawbacks
Reuters via Yahoo! News
U.S. bank regulators will review whether JPMorgan Chase & Co executives should have to give back compensation due to the bank’s failed hedging strategy that has produced at least $2 billion in losses, the head of the Office of the Comptroller of the Currency said.

Morgan Stanley Will Pay $6.75 Million Over Trading Claims
By Silla Brush
Morgan Stanley will pay $6.75 million to resolve claims that its futures brokerage unlawfully traded positions off exchanges owned by CME Group Inc.

Merrill broker boomerangs after week at rival firm
Reuters via Yahoo! News
Ten days after adviser Steven Briggs resigned from Merrill Lynch to join rival brokerage Morgan Stanley Smith Barney – a move that ended a 30-year tenure at the firm – the veteran broker made a U-turn.

Barclays may recover Lehman-linked assets: ruling
Reuters via Yahoo! News
Barclays Plc is entitled to recover roughly $1.5 billion of disputed assets related to Lehman Brothers Holdings Inc’s bankruptcy, a U.S. federal judge said, reversing a decision by a federal bankruptcy judge.

Clearing & Settlement

LCH.Clearnet Girds for Europe Woes with Targeted Margin Moves
By Katy Burne – Dow Jones
Europe’s largest clearinghouse for fixed-income trades has been safeguarding itself against the region’s deteriorating economy by demanding bigger payments or “margin” from some firms using Spanish bonds as collateral in short-term loans called repurchase agreements, or “repos.” The not previously reported selective margin increases by units of LCH.Clearnet Group, described by a person familiar with the clearinghouse’s activities, are in addition to a recent move to segregate its funds into different asset classes and market-wide margin increases for European sovereign bonds that went into effect at its “RepoClear” service on May 24.

DTCC Appoints Former U.S. Ambassador Christopher J. LaFleur Special Advisor For Asian Government Relations & Regulatory Outreach – LaFleur To Manage Political & Policy Relationships In Asia Pacific Region

Indexes & Products

ETF Fees: The Lower the Better
ETF Trends via Yahoo! Finance
The exchange traded fund industry is in direct competition with the mutual fund business as far as fees are concerned. Another direct competitor to the ETF industry is itself, as ETF providers are contending to have the lowest fees in the business.

BM&FBOVESPA: ETF Financial Volume To May Surpasses Figure For Whole Of 2011
The Exchange Offers ETFs That Track The Performances Of 13 Indices, Such As Ibovespa, The Dividend Index And The Sustainability Index

May 2012 Commodities Commentary: Dow Jones-UBS Commodity Indexes Down On Global Economic Uncertainty

Dow Jones-UBS Commodity Indexes May 2012 Performance Report

Dow Jones Islamic Market Titans 100 Index Closed Down 8.04% In May

Global X Launches ‘Guru’ Hedge Fund ETF via Yahoo! Finance

Diligent And Xero To Be Added To NZX 50 Index

Sartorius (Preferred Shares) And Cancom To Be Included In TecDAX – Deutsche Boerse Reviews Index Composition – Changes Are Effective On 18 June 2012

Genworth MI Canada Added To Dow Jones Canada High Dividend 50 Index


Eze Castle Integration Market Survey Finds Eight Out of Ten Hedge Funds and Investment Firms Are Adopting Cloud Computing Solutions
Business Wire via Yahoo! Finance
Eze Castle Integration, Inc., a leading provider of strategic IT solutions and private cloud services to hedge funds, today announced the results of its independent “Cloud Adoption Trends in the Investment Management Industry” survey, which was conducted in partnership with IDG Research.

Broadway Technology to Participate in Door64’s Austin’s Painpoint Job Fair
GlobeNewswire via Yahoo! Finance
Broadway Technology, LLC, a leader in high-performance trading solutions for top-tier global banks and hedge funds, announced today that it will be participating in Austin’s Painpoint Job Fair on Friday, June 29, 2012.

Deep Blue Capital Leverages QuantFEED And QuantLINK To Improve Business Performance

Alpes Selects ULLINK Software For Order Management Solution


CFTC Orders Morgan Stanley & Co. LLC to Pay $5 Million Civil Monetary Penalty for Unlawful Noncompetitive Trades
The U.S. Commodity Futures Trading Commission (CFTC) today issued an order filing and settling charges that, over an 18-month period, Morgan Stanley & Co. LLC (Morgan Stanley), a registered futures commission merchant (FCM), unlawfully executed, processed, and reported numerous off-exchange futures trades to the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT) as exchanges for related positions (EFRPs). The CFTC order requires Morgan Stanley to pay a $5 million civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

[ASIC] Melbourne man charged with insider trading

Environmental & Energy

Around the world, cap-and-trade is still alive and kicking
Washington Post
When the climate bill died in the U.S. Senate in 2010, most observers assumed that was the last dying gasp for “cap-and-trade” as a policy for tackling global warming. Here in the United States, it’s hard to find an environmentalist or Democrat who will even whisper the phrase anymore.

EU Won’t Discuss Carbon Roadmap Next Week, Official Says
The option of European Union nations backing a carbon-cut strategy up to 2050 was dropped from the agenda of June 11 ministerial meeting after Germany concluded it was unlikely to win unanimous support, an EU official said.

EU-Chinese carbon market contacts intensifying
Meetings between EU and Chinese officials aimed at helping Beijing to draft plans for its own carbon emissions market are “increasing in intensity,” the EU’s chief climate negotiator, Artur Runge-Metzger has told EurActiv.


Thai Bourse Launches USD Futures
Kittiratt Na-Ranong, Deputy Prime Minister and Finance Minister, presided over the opening ceremony of USD Futures launched by Thailand Futures Exchange (TFEX), under The Stock Exchange of Thailand (SET) group. He is welcomed by Sompol Kiatphaibool, TFEX’s Chairman, and Charamporn Jotikasthira, SET’s President, together with other SET executives and top executives from financial and capital markets. The USD Futures started trading from June 5. For more information of USD Futures, please visit

Tall Tales About China’s Banks Hide Economy’s Problems
As China’s growth slows, its banking system is coming under greater scrutiny. The general perception outside the country is that negative real interest rates are causing financial instability, repressing consumption and encouraging excessive investment in capital-intensive industries.

Tap Dim Sum Bond Market Now, Says SocGen
Société Générale SA is recommending issuers tap the so-called dim sum bond market now as the French bank says demand for offshore yuan-denominated debt traded in Hong Kong will wane until the end of 2013.

SGX saw growth in Derivatives and OTC Clearing for May
Singapore Exchange (SGX) said that the volume of its Derivatives business and OTC clearing continued to see growth in May.
Securities daily average value (SDAV) fell 20% year-on-year and 0.5% month-on-month. However, the total number of securities trades went up to 3.9 billion in May, a 34% annual increase and 8.5% monthly increase. Derivatives volume rose almost 40% year-on-year to 6.9 million contracts, and daily average volume (DAV) grew 31% to 320,715 contracts. Month-on-month, overall derivatives trading volume increased more than 10%. Volume of commodity contracts cleared increased 119% year-on-year to 24,645 contracts and was up 76% in May. OTC energy swaps surged up 687% year-on-year to a high of 2,102 contracts, and iron ore swaps volume more than doubled to 15,487 contracts from a year earlier.

HKMEx Gold Trading Surpasses 10,000 Contracts – Milestone Symbolises Growing Market Acceptance
The Hong Kong Mercantile Exchange (HKMEx), China’s global marketplace, announces today that trading of its US-dollar gold futures surpassed 10,000 contracts for the first time on June 1. A total 10,389 gold contracts were traded on the day.

BOJ Needs a Squeeze
James Simms – WSJ
An overly strong fear of asset bubbles has left the Bank of Japan too conservative to tackle deflation. No wonder some Japanese lawmakers now want to put an end to the central bank’s 14 years of independence.

Press Conference By Shozaburo Jimi, Japan’s Minister for Financial Services, Friday, June 1, 2012, From 9:41 A.M. to 9:47 A.M.

Frontier Markets

Islamic Development Bank picks 5 banks for potential sukuk – leads
Reuters via Yahoo! Finance
Islamic Development Bank has picked five banks to arrange investor meetings ahead of a potential Reg S-structured dollar-denominated Islamic bond, or sukuk, an announcement from lead arrangers said on Wednesday.

New Billing Model Reduces Fees For JSE Currency Derivatives Market
In a bid to increase liquidity and boost trading volumes in the fast-growing currency derivatives market, the JSE has once again revised pricing on its suite of currency products. This new billing model includes a revision of the current sliding scale of fees as well as volume rebates for market makers. It was implemented on 1 June 2012.

Keynote Address By YBhg Datuk Ranjit Ajit Singh, Chairman, Securities Commission Malaysia At The Malaysia Investor Relations Awards 2012

DGCX Announces Third Consecutive Monthly Volume Record
Dubai Gold and Commodities Exchange (DGCX) announced record-breaking trading volumes for a third consecutive month in May 2012 on the back of major upswings in Gold and Rupee Futures trading. The total trading volume for May hit 853,191 contracts, up 259% from the 237,920 recorded in May last year. May 2012 also witnessed the highest ever monthly total value, amounting to $32.67 billion.

Bursa Malaysia Berhad Sector Update

Component Changes Made To Dow Jones Islamic Market China/Hong Kong Titans 30 Index

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