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John Lothian Newsletter: Aequitas Aims for 20pct Share After Approval; LCH.Clearnet plans Japan clearing expansion; FX trade body accepts prospect of exchange-based dealing

First Read

CME: Chicago Mustache Exchange
Doug Ashburn – JLN
It is mid-Movember, which means mustaches are sprouting from the upper lips of men across the world in support of men’s health. Our friends at CME Group have put together a team of 46 Mo Bros and Mo Sistas called the Chicago Mustache Exchange. As of November 17th, the team has raised over $28,000. From the team’s statement:

As the world’s leading and most diverse MUSTACHE marketplace, THE CHICAGO MUSTACHE EXCHANGE (CME) is where the world comes to manage MEN’S HEALTH risk. CME offers the widest range of global benchmark products across all major MUSTACHE classes. CME brings MO BROS and MO SISTAS together through MEN’S HEALTH INITIATIVES and MUSTACHE facilities in New York and Chicago.

“It’s been an absolute hoot,” said Derek Sammann, Senior Managing Director of Commodities and Options Products. “As someone who has never gone more than 2-3 days without shaving, it has also been a personal challenge.” Sammann, who is in a dead heat with Executive Chairman and President Terry Duffy for top spot on the leader board, does not appear to be follically challenged. In fact, he bears a striking resemblance to Ron Burgundy, Will Ferrell’s character from the Anchorman movies.

Duffy, for his part, looks to be working on a fumanchu.

Movember started with a group of 30 Bros in Australia in 2003 and has grown into a global movement, with over 4 million participants having raised over $559 million and funded 770 men’s health projects such as prostate and testicular cancer, as well as mental health issues.

“Everyone knows someone who has suffered from a men’s health issue,” says Sammann. “This is a fun way to do our part and give back.”

To visit the Chicago Mustache Exchange Movember page, and contribute to Derek, Terry, or any one of the 46 participants, go to jlne.ws/1t4QTsW

***JM: Similar to a broken, fuzzy clock, my year-round appearance becomes trendy every year at this time.

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DGCX – Passing of Former CEO Gary Anderson
DGCX confirms with deep sadness that the Exchange’s former CEO Gary Anderson passed away on the 13th November in London. Gary had been fighting cancer for the last few months and had stepped down as CEO in October. In the two years that he served as CEO of DGCX, his vision, passion and leadership made a huge difference to the development of the Exchange’s business and all of the team.
jlne.ws/11yfLnb

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Bill Templer, Managing Director, Faventus Derivatives Consulting – Stretch Beyond Your Desk
JohnLothianNews.com

“Whatever you do end up doing, find something in it that you can be the best at.”

Bill Templer, managing director for Faventus Derivatives Consulting, discusses the charitable side of his life and his work with Futures For Kids, an organization that raises money to support children living in poverty. Templer describes how Futures For Kids began with a group of individuals in the financial industry and how his work was able to lead him to new networking and job opportunities. Templer also discusses his career history and creates a list of advice he wished he knew when he was younger.

Watch the video »

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NYSE To Host Floor Broker Charity Trading Day – Friday, November 21, 2014
The New York Stock Exchange, part of the Intercontinental Exchange global network of exchanges, announced today that the NYSE Floor Broker Charity Trading Day will take place on Friday, November 21, 2014. All net transaction fees on orders executed by floor brokers in NYSE and NYSE MKT securities on the day will be donated to St. Jude Children’s Research Hospital, one of the world’s premier centers for the research and treatment of pediatric cancer and other life-threatening childhood diseases.
jlne.ws/1zznpc9

***DA: Sending your orders to the floor Friday would not just be smart order routing, but also kind.

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High Frequency Trading, Dark Pools: What Comes Next?: Video
Bloomberg
Vlad Khandros, head of Americas market structure and liquidity strategy at UBS, talks about changes in high frequency trading and dark pools.
jlne.ws/11ydPv7

***DA: First comes love, second comes marriage…

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Hunting Guide: Paul McCormick Helps Students Find Financial Jobs
JohnLothianNews.com
London’s financial industry employs about 250,000 people and the hurdles are high for new graduates and young professionals.

Paul McCormick, of Thomson Reuters in London is trying to help the next generation into the markets with helpful advice about getting a job. His blog, www.openingcitydoors.co.uk, may assist in bringing the best and brightest to firms.

“There’s a couple hundred companies in this industry,” he said. “All of these companies have got demand for talent each year. But from a graduate point of view, where do you start, you know? How do you find those opportunities?”

Watch the video »

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Options Alliance Annual Conference Dec 8
Join us on December 8 for a deep dive into the exploding world of financial startups. Meet and mingle with your fellow entrepreneurs as you learn how to market, grow and fund a wide range of financial startups. The program begins at 1 pm at the Arditti Center for Risk Management at DePaul University’s Chicago Loop campus. The three panels cover the marketing, growth in AUM and funding of startup firms. A networking cocktail reception follows.
jlne.ws/1xe5PuU

***DA: Oops; buried the lead there. Should have marketed it as a cocktail reception preceded by an impressive lineup of speakers discussing all aspects of startups.

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Sponsored Content
Derivatives World London: The Debates

Join FOW on the 9th December for our flagship European event: Derivatives World London: The Debates.

Network with over 200 high-level delegates from across the industry, find out why next year will see the return to volatility, how automated trading will take over the FX market, what the buyside really thinks about market reform and much more.

The event is free to attend for banks, brokers and FCMs, the buyside, market makers and prop traders.

Register now and view the full agenda HERE

Sponsored
content from:
FOW

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Lead Stories

Aequitas Aims for 20% Share After Exchange Wins Approval
Eric Lam – Bloomberg
Aequitas Innovations Inc. won approval from Ontario regulators to operate as an exchange, paving the way for a Canadian bourse designed to target so-called predatory high-speed trading.
jlne.ws/11ydKY5

Aequitas Approved: Canadian Regs Green-Light Anti-Predatory HFT Exchange
Becca Lipman – Wall Street & Technology
The newly approved Aequitas exchange wants to correct unfair advantages given to HFTs over retail investors. Competition had prompted TMX Group to plan a similarly minded relaunch of the Alpha exchange. But is the devil in the details?
jlne.ws/11yaUlU

LCH.Clearnet plans Japan clearing expansion
Philip Stafford – Financial Times
LCH.Clearnet is working on an application to clear over-the-counter derivatives in Japan as it expands its Asian operations and exploits new global rules designed to curb systemic risk.
jlne.ws/11ye74Y

Forex trade body ACI accepts prospect of exchange-based dealing
Patrick Jenkins and Daniel Schäfer – Financial Times
The head of the industry body that represents foreign exchange traders has admitted that a shift to regulated, exchange-based trading may be desirable after the recent rate-rigging scandal.
jlne.ws/11ycnJ6

Euronext seeks to lure tech SMEs
Anna Irrera – Financial News
Euronext’s subsidiary for small and medium-sized companies has announced a series of measures to support the technology sector, underscoring the growing push by European exchanges to attract more SMEs to the capital markets.
jlne.ws/11ycp3A

Belgian prosecutor accuses HSBC of money laundering
Emma Dunkley – Financial Times
HSBC’s private banking arm in Switzerland has been accused of money laundering and fraud by a Belgian prosecuting judge for its role in helping more than 1,000 wealthy investors avoid taxes.
jlne.ws/11ycHrm

Flash Boys Raising Volatility in Wild New Treasury Market
Susanne Walker and Lisa Abramowicz – Bloomberg
In a flash, the bond market went wild. What began on Oct. 15 as another day in the U.S. Treasury market suddenly turned into the biggest yield fluctuations in a quarter century, leaving investors worrying there will be turbulence ahead.
jlne.ws/11ydBnu

Goldman, JPMorgan and Morgan Stanley Executives to Be Questioned at Commodities Hearing
Nathaniel Popper – Dealbook – NY Times
Goldman Sachs executives will again come in for a grilling at a congressional hearing this Thursday.
jlne.ws/11yazjk

Regulatory

Court Conflict Raises Question of Who Decides the Law, and the Breaker
Peter J. Henning – Dealbook – NY Times
It is a basic principle taught in every American government class: Congress enacts the laws and the executive branch enforces them. If only life were so simple. No law is perfectly clear, and circumstances change over time, opening up statutes to new interpretations.
jlne.ws/11yavjy

CFTC Commissioner Says Agency Has Authority Over Bitcoin Price Manipulation
Michael J. Casey – WSJ
A commissioner at the Commodity Futures Trading Commission said Monday that the agency was authorized to intervene with enforcement actions against price manipulation in bitcoin markets.
jlne.ws/11yeH2K

FINRA, MSRB Push for Bond Reference Price Disclosure
WatersTechnology
Industry rulemaking bodies FINRA and the Municipal Securities Rulemaking Board are seeking comments from the industry on proposals to make bond dealers disclose same-day trade prices in the same security on trade confirmations sent to clients for retail-sized orders in fixed income securities.
jlne.ws/1qQYJql

ESMA Publishes 16th Extract Of EECS’ Enforcement Decisions
jlne.ws/11ycX9K

Call For Expressions Of Interest Regarding The Renewal Of The Consultative Working Group Of The ESMA Financial Innovation Standing Committee
jlne.ws/11yd0Cu

The Future Of Financial Reform, Speech Given By, Mark Carney, Governor Of The Bank Of England, Chair Of The Financial Stability Board, 2014 Monetary Authority Of Singapore Lecture, 17 November 2014
jlne.ws/11yd9Wz

Exchanges & Trading Facilities

Nasdaq names 14 stocks to test lower fee and rebate program
Reuters
Nasdaq OMX Group on Monday named 14 stocks that will take part in the exchange operator’s program to test the effects of lowering its exchange fees and rebates, beginning on Feb. 2 and lasting at least four months.
jlne.ws/11yaeNm

ICE Futures Europe Announces Launch Of Two Energy Contracts
Intercontinental Exchange (NYSE:ICE), the leading global network of exchanges and clearing houses, today announced the introduction of two new energy futures contracts on December 1, 2014.
jlne.ws/11yfFfe

Changes In The Exchange Council Of The Frankfurt Stock Exchange
The Exchange Council of the Frankfurt Stock Exchange elected a new Deputy Chairman in its meeting of 14 November 2014; Dr Matthias Zieschang, Executive Director of Controlling and Finance at Fraport AG, will be taking over from Dr Werner Brandt, who stepped down as of 30 June 2014.
jlne.ws/1zznAnC

BATS has declared self-help against NYSE
www.cnbc.com
BATS BYX and BZX exchanges briefly declared self-help against the New York Stock Exchange on Monday.
jlne.ws/11yf9hu

Xetra/Börse Frankfurt: Exchange Traded Commodities And Additional Exchange Traded Notes Issued By Boost ETP Launched On Xetra For The First Time
jlne.ws/11ydbh0

CBOE Holdings To Present At KBW Securities Brokerage & Market Structure Conference On November 19
jlne.ws/1xz1KD0

MIAX Options Holiday Schedule – Thanksgiving
jlne.ws/11yd5Gj

Hedge Funds & Managed Futures

The Focus on Data Security Shapes 2015 Hedge Fund Tech Trends
Grigoriy Milis – Wall Street & Technology
With tougher penalties associated with exposure of client information on the horizon, firms will need to examine the steps they must take to protect this data from attack.
jlne.ws/11yaYlF

Buy-side drifts away from broker TCA
John Bakie – The Trade
Buy-side clients are seeking greater neutrality in transaction costs analysis (TCA) in order to gain a wider view of their execution performance, according to Jefferies’ global head of electronic and program trading, Bill Bell.
jlne.ws/11ybjVx

Narrow asset classes constraining managers
Risk.net
Liberating an investment strategy from asset class constraints can position a portfolio to reap the rewards from volatile and illiquid markets
jlne.ws/11yboZj

Banks & Brokers

Deutsche Bank Ends Most CDS Trade
Katy Burne and Eyk Henning – WSJ
An investment blamed for accelerating the 2008 financial crisis is withering as new rules and placid markets push trading elsewhere.
jlne.ws/11y9VCk

ICAP Information Services Launches ICAP Equity Derivatives Premium Pricing Service
ICAP Information Services (IIS), the information division of ICAP, announces today that it has launched ICAP Equity Derivatives, an end-of-day, premium data product. Content includes volatility surfaces, variance swap curves and forward curves for the top 13 global equity indices, with maturities from one month up to 10 years and strikes between 5% and 400% of spot.
jlne.ws/1zzni05

Goldman Sachs Says Boosting Asset-Backed Debt Business in Europe
Alastair Marsh – Bloomberg
Goldman Sachs Group Inc. (GS) says it’s adding staff to its European asset-backed securities business as the bank prepares for a resurgence in the $305 billion market that shrank more than 40 percent over the past four years.
jlne.ws/11ydXum

Banks May Not Need Branches, But They Can’t Disappear Completely
Saabira Chaudhuri – MoneyBeat – WSJ
Banks may not need as many branches as they once did—but they’ve got to remind potential customers that they exist. That’s the conclusion from Keefe, Bruyette & Woods analyst Fred Cannon, who wrote in a recent note that banks are going to have to spend money if they want to stay top of mind with consumers.
jlne.ws/11yb6BU

Bank Tellers Battle Obsolescence
Sara Jerving – WSJ
Richard Davis started working as a bank teller on his 18th birthday. Nearly four decades later, he heads U.S. Bancorp, one of the largest lenders in the U.S. These days, few 18-year-olds starting out behind a branch counter can expect to land in the corner office.
jlne.ws/11ya20C

BGC Partners to Present at the KBW Securities Brokerage and Market Structure Conference
jlne.ws/1xz1946

Clearing & Settlement

Innovation spotlight: Swap futures
Jon Watkins – The Trade
The mandatory central clearing of OTC derivatives has led to an abundance of additional costs, including additional margin and collateral requirements. Formerly a bilateral process, swaps trading now involves central counterparties (CCPs), signing up with clearing members and a whole lot of extra compliance. T
jlne.ws/11ybdNA

IOSCO outlines post-trade transparency plan for credit derivatives
Jon Watkins – The Trade
The International Organization of Securities Commissions (IOSCO) is backing new rules to make the price and volume of individual transactions in the credit default swaps (CDS) markets publicly available.
jlne.ws/11yfz7z

Liquidnet forced to seek new clearer
Tim Cave – Financial News
Liquidnet, the buyside-only equities trading platform, is one of the firms that has been impacted by JP Morgan’s decision to close its broker-dealer clearing business, forcing the operator to look for an alternative post-trade provider.
jlne.ws/11yeCfw

Indexes & Products

The Fund that Reshaped the Gold Market
Tatyana Shumsky – WSJ
The first U.S. exchange-traded fund to give investors a stake in gold was the fastest-growing financial product of its kind when it launched 10 years ago. Today, SPDR Gold Trust, better known by its ticker symbol GLD, is the fastest-shrinking.
jlne.ws/11ya8W4

Xetra/Börse Frankfurt: Exchange Traded Commodities And Additional Exchange Traded Notes Issued By Boost ETP Launched On Xetra For The First Time
Eight exchange traded commodities (ETCs) and four exchange traded notes (ETNs) from issuer Boost ETP Plc have been tradable on Xetra since Friday.
jlne.ws/11ydbh0

Technology

Initial Balance Trading Levels
Trade Talk
With the release of X_TRADER 7.17.40, TT introduced a new feature in ADL named TT Analytics. This feature uses a single block that brings a historical data solution to ADL along with a suite of technical indicators. It provides almost every value found in an X_STUDY chart to your server-side algo. In this blog post, I will introduce the block while demonstrating how to find some important trading reference points.
jlne.ws/11yb3pH

Stop Using Spreadsheets for Disclosure Management, Says Linedata
Becca Lipman – Wall Street & Technology
The rules for aggregating and calculating disclosures vary tremendously across global jurisdictions, getting well ahead of traditional approaches. Interest in automated solutions rises.
jlne.ws/11yaZpV

Deutsche Bank Brings AxiomSL’s Regulatory Platform to the US
Anthony Malakian – WatersTechnology
Deutsche Bank announced that it is expanding its use of AxiomSL’s regulatory reporting platform and capital calculations tool in the United States after deploying the solutions in the Asia-Pacific region.
jlne.ws/1qQYGe5

Enforcement

Justice Department Is Weighing Civil Suit Against Angelo Mozilo
Matthew Goldstein – Dealbook – NY Times
Federal prosecutors are wrestling with whether to file a civil fraud lawsuit against Angelo R. Mozilo, the former chief executive of Countrywide Financial, which was at the center of the subprime mortgage boom and bust, people briefed on the matter say.
jlne.ws/11yaCf0

Madoff trustee recoups nearly $500 million more for customers
Reuters
Former customers of Bernard Madoff may soon recover an additional $496.8 million as a result of a settlement with two “feeder funds” that was announced on Monday by the trustee liquidating the swindler’s firm.
jlne.ws/11yak7I

SAC Capital’s Martoma Ordered to Report to Miami Prison
Bob Van Voris – Bloomberg
Ex-SAC Capital Advisors LP portfolio manager Mathew Martoma, convicted in what prosecutors say is the biggest insider-trading case against an individual, must begin serving his nine-year sentence at a Miami federal prison camp in three days.
jlne.ws/11yfwst

SEC Sanctions Two Former Defense Contractor Employees for FCPA Violations
The Securities and Exchange Commission today sanctioned two former employees in the Dubai office of a U.S.-based defense contractor for violating the Foreign Corrupt Practices Act (FCPA) by taking government officials in Saudi Arabia on a “world tour” to help secure business for the company.
jlne.ws/11yaBrx

SEC Charges Three Penny Stock Promoters Behind Pump-and-Dump Schemes
The Securities and Exchange Commission today charged three penny stock promoters with conducting pump-and-dump schemes involving stocks they were touting in their supposedly independent newsletters.
jlne.ws/11yaE6E

SEC Charges San Francisco-Based Penny Stock Company CEO for Defrauding Investors in Pump-and-Dump Scheme
The Securities and Exchange Commission today charged a San Francisco-based penny stock company CEO with defrauding investors by issuing false and misleading press releases portraying his purported marketing and infomercial company as a successful venture in order to drive the stock price up while he covertly sold millions of shares into the public market for more than $300,000 in illicit profits.
jlne.ws/11yaQCK

Thirty firms placed under FX ‘remediation programme’
Risk.net
The Financial Conduct Authority (FCA) is understood to have placed a further 30 banks and non-banks with G-10 foreign exchange spot desks under supervisory measures after discovering widespread evidence of poor practice, according to a source.
jlne.ws/1xz0XlA

[AMF Canada] Transaction based on privileged information – Jacques Gauthier fined $9,000
jlne.ws/1xz1W5f

Environmental & Energy

G20 promises ‘strong and effective’ climate action, following ‘trench warfare’ with Australia
www.businessgreen.com
The G20 yesterday reasserted its commitment to “strong and effective action to address climate change”, announcing new measures to promote energy and fuel efficiency and reaffirming its commitment to phasing out “inefficient fossil fuel
subsidies”, financing a new Green Climate Fund, and finalising a new international climate change treaty in Paris next year.
jlne.ws/1zwsCRP

G20 pledges lift Green Climate Fund towards $10 billion U.N. goal
Reuters
A promise by Japan on Sunday to give up to $1.5 billion to a U.N. fund to help poor nations cope with global warming puts the fund within sight of a $10 billion goal and brightens prospects for a U.N. climate pact next year.
jlne.ws/1zwuHNR

Threat of Obama veto hangs over Keystone XL pipeline
www.businessgreen.com
Barack Obama is poised to veto a Senate decision to approve the Keystone XL pipeline should the US upper house back construction of the controversial project this week.
jlne.ws/1zwsjGT

Asia-Pacific

Enthusiasm for Hong Kong-Shanghai Trading Link Fades on Second Day
Gregor Stuart Hunter – WSJ
Enthusiasm for China’s much-heralded trading link between Shanghai and Hong Kong diminished, with early orders placed on its second day falling far short of Monday’s launch.
jlne.ws/11ya5d2

HKEx’s Li says derivatives, IPOs to be part of Shanghai stock scheme in months
Reuters
Hong Kong stock exchange Chief Executive Officer Charles Li said it would take months, not years, before initial public offerings (IPOs) and derivatives are made a part of a landmark scheme linking Hong Kong and the Shanghai stock exchanges that kicked off on Monday.
jlne.ws/11yexs5

PSE-PDS merger pushed back anew to 2015
Manila Bulletin
The much-vaunted merger between the Philippine Stock Exchange (PSE) and the Philippine Dealing Systems Holdings Corp. (PDS) may have to be pushed back to 2015 instead of this year as board approval of the other significant owners have yet to be obtained.
jlne.ws/11yeqN7

Thai Bourse Selects 45 Listed Companies For CSR Recognition 2014 Awards
jlne.ws/11yd1pO

HKEx Report: Stock Exchange Participants’ Market Share Report
jlne.ws/11yd05u

Frontier Markets

FTIL sells Bourse Africa for $40.5 mn
Business Standard News
Financial Technologies (FTIL) announced it was selling Bourse Africa, Mauritius, together with its wholly owned subsidiary, Bourse Africa Clear, to Continental Africa Holdings, Mauritius, for $40.5 million.
jlne.ws/11yeooD

Africa Makes Strides in Corporate Accounting, Governance
Kimberly S. Johnson – WSJ
Oscar Onyema is battling the perception of corruption and poor transparency in Nigeria one public company at a time.
jlne.ws/11y9U1j

Argentina steps up fight against black market dollar trade
Reuters
Argentina, which faces an acute hard currency shortage, sought to toughen international trade controls on Monday by creating a new agency to keep track of imports and exports and said it would keep tightening currency restrictions.
jlne.ws/11yahcc

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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.