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John Lothian: Buy-side group backs work to clean up capital markets; Bank of England Joins Critics of ‘Last Look’ in Currency Trading; Chinese Firms Are Leaving the U.S. to Relist Back Home

First Read

Bits & Pieces
By John J. Lothian

My wife Cheryl is resting comfortably after undergoing emergency appendectomy surgery yesterday. I flew home from London, leaving IDX a day early, and was able to be by her side as she came out from the anesthetic. My good luck to meet her right after surgery included her delay into surgery and my delayed flight.

Thank you for all the best wishes. We appreciated it.

Jim Kharouf is headed home today, while Doug Ashburn and his son Colin are staying in London for the weekend to take a look at colleges for a Study Abroad program.

From the pictures on Facebook, it looked like the gala dinner for Futures For Kids was a success. I was sorry to miss it and see Simon Puleston Jones in a kilt. The word was Simon was going to tag Bill Herder as the next wearer of the kilt. I believe the Most Interesting Man in the World, Pat Kenny, also wore a kilt to the gala.

Thanks again for all the notes.


Take One: Data and Fintech Rocking The Free World
By Jim Kharouf, John Lothian News

Over the past two years, market participants have bemoaned the monetization of data by the largest exchanges.

CME raised the ire of the trading community last year with the increased data fees, especially at a time when many in the trading community were hurting from new regulation requirements, more technology investments to meet those demands, and a generally lousy trading environment with not a lot of movement in key markets. And there is the ongoing grumbling of traders that it is they who create the prices, not the exchange, and without them, there wouldn’t be any data to sell at all.

But an interesting thing is now happening in the data world. It is being given away for free in various new and interesting ways. True, this end-of-day data, along with various other types of data that is packaged, is not realtime. But that too may be of less importance to a growing number of traders who have discovered that the pure speed game is more or less over and the revived game of trading strategy has reemerged with the rise of more flexible and accessible trading technology.

What is emerging are platforms such as Barchart Direct, which puts all its historical market data on the cloud; Quandl, a free storehouse of all types of financial data; and Estimize (see the FinTech Exchange Chicago presentation HERE) a free site for earnings and economic estimates – all of which are challenging the status quo of Thomson Reuters, Bloomberg and others. Meanwhile, even Trading Technologies is getting into the act, offering its customers free access to Fundamental Analytics.

Read the rest of this report here and see the full presentation in Sway here


CFTC visit the LME Ring
Press Release – LME Garry Jones, London Metal Exchange (LME) CEO and Co-Head of Global Markets, HKEx, yesterday welcomed Timothy Massad, Chairman of the CFTC, to the LME’s offices and trading floor, the Ring.

The Masochistic Training to Become Wall Street’s Fittest
A friendly rivalry rooted in giving back
by Joel Weber, Bloomberg
Jay Li calls his secret weapon the “Bane” mask. The 33-year-old equity analyst at Trafelet Brokaw owns a frustrating-yet-admirable claim to fame: He’s the second-fittest man on Wall Street. Li isn’t especially happy about that title, one he’s earned the past two years in the annual Wall Street Decathlon—and one he’s aiming to retire at this year’s event, which takes place June 13-14 at St. John’s University in New York.

***** I am not sure where I rank as the most operated man on Wall Street, but I have to be on the list.


Opinion: Investing predictions are getting lazier and stupider; You ever notice that some people use a sample size of one?
The are no shortcuts — investing takes hard work.
“The last time Apple did this, it rallied 55%” — CNBC
“One is the loneliest number that you’ll ever do” — Three Dog Night
A single, lame thought is always en vogue in Wall Street and media circles: To make a prediction, you only need a sample of one.

****** Too much television time and not enough time to reflect.


Cheapest-ever broker lets you trade shares for less than £2; Dutch broker Degiro has opened in Britain and its rock-bottom prices are 90pc lower than some rivals. How can it be so cheap – and is it safe?
By Richard Dyson, The Telegraph
Ever since the arrival of online share-trading in the late Nineties prices have been falling. Britain’s biggest brokers now charge around £12 per trade whether you’re buying or selling. A few niche brokers, such as iWeb, charge as little as £5 – but they’re the exception. Now comes a complete price-smashing entrant from Holland: an upstart called Degiro which will charge around £2 for trades of £10,000.

***** This broker is so cheap, it does not even pay attention.


WSJ to Launch Global Print Edition
The Wall Street Journal will replace its Europe and Asia editions with a global broadsheet edition starting in September.

****** What year is this?


Brussels launches antitrust investigation into Amazon
Christian Oliver in Brussels, FT
The European Commission has launched an antitrust investigation to determine whether Amazon, the US-based online retailer, unfairly kept competitors out of the increasingly popular market for electronic books.

***** If Amazon made a lot of money, maybe I would believe this.



MarketsWiki Page of the Day
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Companies, Organizations and Groups

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63,930,042 pages viewed, 8,196 articles, 192,214 edits
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Lead Stories

Buy-side group backs work to clean up capital markets
The Trade News
Steps to clean up capital markets and prevent abuse announced by Bank of England governor Mark Carney last night have been welcomed by the UK buy-side trade body the Investment Association.

Bank of England Joins Critics of ‘Last Look’ in Currency Trading
by Will Hadfield, John Detrixhe, Bloomberg
The Bank of England has added its voice to calls for greater scrutiny of the “last look” in currency trading, questioning whether the practice should be allowed to continue.

Chinese Firms Are Leaving the U.S. to Relist Back Home
by Ben Scent, Belinda Cao, Bloomberg
Chinese companies are pulling out of the U.S. stock market at a record pace.

Bank of England governor Mark Carney to extend market abuse rules
Caroline Binham and Martin Arnold in London, FT
Punitive new rules for senior bankers will be extended to cover thousands of asset managers, hedge funds and even the Bank of England itself.

Osborne to sell RBS stake at a loss after gaining Carney and Rothschild backing
Dan Jones, InvestmentWeek
George Osborne is to begin selling the government’s 80% stake in Royal Bank of Scotland at a loss, saying any further delay could jeopardise the economy.

Vikram Pandit backs loan-trading platform MMKT Exchange
Stephen Foley and Tom Braithwaite in New York, FT
Vikram Pandit, the former chief executive of Citigroup, is backing a new loan-trading platform that could make it cheaper for middle-market companies to raise money.

ICAP Global Broking Launches First Matching Session In Investment Grade Corporate Eurobonds – ICAP’s Hybrid Execution Business Expands Its Global Footprint
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that ICAP Global Broking has launched its first matching session in investment grade (IG) corporate Eurobonds, complementing ICAP’s existing execution model in this market.

Frankfurt Prosecutors Probe Nine in Dividend-Fraud Case
by Karin Matussek, Bloomberg
Nine people are suspects in investigations into controversial stock trades used to obtain tax benefits on dividends, prosecutors said as they revealed more details about raids at several sites, including Deutsche Bank AG offices.

German Prosecutors Say Nine Suspects Targeted in Deutsche Bank Raids; Raids related to suspected tax evasion by bank’s clients
FRANKFURT—Raids that included Deutsche Bank AG offices earlier this week targeted nine individuals in investigations related to suspected tax evasion by the bank’s clients, German prosecutors said Thursday.

Meredith Whitney Shuts Her Hedge Fund; One of Wall Street’s highest-profile women in the last financial crisis, Meredith Whitney closes Kenbelle Capital LP
Meredith Whitney shut her fledgling hedge fund, a setback for the ex-banking analyst who became one of Wall Street’s highest-profile women during the last financial crisis but ran into challenges in recent years.


George Osborne Says British Government to Begin Selling RBS Shares; Exit from Royal Bank of Scotland would close a chapter on financial crisis
The U.K. government will start selling shares in Royal Bank of Scotland Group PLC within months in a long-anticipated but highly symbolic move to show the country has moved on from the financial crisis.

European regulators battle with derivatives reporting
by Joel Clark
A review of EMIR reporting is under way as the industry lobbies regulators to move to single-sided reporting for OTC derivatives and remove the reporting requirement for exchange-traded derivatives. What’s more, cross-border harmonization of derivatives regulation is way off.

UK plan to extend City regulation provokes mixed response
Caroline Binham, Philip Stafford and David Oakley in London, FT
A punitive regime that holds senior managers to account for failings on their watch will be extended beyond banking and insurance to thousands of asset managers, hedge funds and other bank customers in the fixed income, commodity and currency markets.

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans

    • BOX: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend BOX Rule 5020 (Release No. 34-75132; File No. SR-BOX-2015-21; June 9, 2015); see also Exhibit 5


    • ISE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the Schedule of Fees (Release No. 34-75131; File No. SR-ISE-2015-20; June 9, 2015); see also Exhibit 5


    • ISE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the Schedule of Fees (Release No. 34-75130; File No. SR-ISE-2015-19; June 9, 2015); see also Exhibit 5


    • NASDAQ: Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change, as Modified by Amendments Nos. 1 and 2 Thereto, Relating to the Listing and Trading of the Shares of 18 Eaton Vance NextShares ETMFs of Either the Eaton Vance ETMF Trust or the Eaton Vance ETMF Trust II (Release No. 34-75121; File No. SR-NASDAQ-2015-036; June 8, 2015)


    • NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services to Modify the Credits for Mid-Point Passive Liquidity Orders. (Release No. 34-75123; File No. SR-NYSEArca-2015-49; June 9, 2015); see also Exhibit 5

Exchanges & Trading Facilities

CME Group Inc. Announces Second-Quarter 2015 Earnings Release, Conference Call

      CME Group


      CME Group Inc. will announce earnings for the second quarter of 2015 before the markets open on Thursday, July 30, 2015. The company has scheduled an investor conference call that day at 7:30 a.m. Central time.


      London Stock Exchange Group


      London Stock Exchange Group (LSEG) today signed a memorandum of understanding (MoU) with Haitong Securities. The agreement was signed by London Stock Exchange plc CEO, Alexander Justham and Haitong Securities Chairman, Wang Kaiguo.

BME unveils new TCA service

      The Trade News


      BME Group has launched a transaction cost analysis (TCA) service to allow market participants to better analyse the quality of execution they receive from their brokers.




      It will allow intermediaries to analyze the implicit costs of their trades in different markets and customers to assess the quality of execution of their brokers


      (No link)

SPIE celebrates successful listing on Euronext; Paris market’s largest IPO since 2007; Global Value of the offer totals EUR939 M, Market capitalisation totals EUR2.5 BN



      Euronext, the primary exchange in the Euro zone, today congratulated SPIE on successfully listing in Compartment A of its regulated market in Paris (ticker symbol: SPIE). It was the largest IPO in Paris since 2007.

Abertis Infraestructuras SA: Bonus shares


Hedge Funds & Managed Futures

ValueWalk: 2015 one of the least volatile years



      Many analysts are anticipating increasing volatility in the equity markets for the remainder of 2015 and the economy as a whole. But how does 2015 look in perspective of past years? After about 160 days into 2015, the article in ValueWalk proves that interestingly 2015 is close to the all-time low in lessened volatility.

Pimco Issues Inflation Warning at a Time When Costs Are Falling

      by Wes Goodman, Bloomberg


      Pacific Investment Management Co. says U.S. inflation is poised to quicken — at a time when costs are falling at the fastest pace in five years.

Treasury volumes raise liquidity concerns

      Robin Wigglesworth, FT


      One of the more worrying aspects of the recent sell-off in the US Treasury market is the relative paucity of actual selling.

Banks & Brokers

Deutsche Bank’s grip on Asia FX market may slip on Jain’s exit



      The exit of Deutsche Bank co-chief executive Anshu Jain may see the lender surrender its strong position in Asia’s fast growing foreign exchange and fixed income markets, with incoming CEO John Cryan expected to cut some of the capital-intensive businesses Jain oversaw.

Citigroup’s FX deals might have made only $1 mln but cost $2.5 bln



      Employee misconduct in foreign exchange trading that cost Citigroup Inc $2.5 billion in fines and penalties might have made only $1 million for the bank, an executive said on Wednesday.

J.P. Morgan Stock Hits New Peak



      Shares in the nation’s largest bank are riding high. J.P. Morgan Chase JPM +1.58% & Co. stock hit an all-time record Wednesday, closing at $68.26, up 1.6%. This is the first time the stock closed above $68, surpassing a previous record of $67.42 earlier in June.

Jamie Dimon holds forth in Chicago (yeah, he’d sell Bank One again)

      By STEVE DANIELS, Crain’s Chicago Business


      Jamie Dimon really likes Chicago—it’s better than New York, he says—but he doesn’t hesitate for a second when asked whether he might not have sold Chicago’s Bank One to New York-based JPMorgan Chase knowing what he knows now.

Clearing & Settlement

CME Clearing Notice: Week of Monday, June 8, 2015


Indexes & Products

MSCI backs itself into corner on China share inclusion

      By Pete Sweeney and Michelle Price, Reuters


      MSCI’s decision to defer including Chinese shares in its emerging market benchmark share indexes for a second time may have trapped the index provider into making promises it can’t keep, both to Beijing and to its investor constituents.

Thomson Reuters expands psychological indices



      The MarketPsych Indices, which now include companies, aims to educate investors about how perceptions embedded in news, blogs and social media impact markets and trading strategies.


Fintech Party May Attract Crashers; If financial disrupter startups grow as hoped they won’t be able to escape regulatory scrutiny



      The grass is always greener on the other side of the banking fence. The regulatory screw has been turned ever tighter on banks, especially the biggest. Meanwhile, companies in the “fintech” space are enjoying relatively light oversight.


New York Attorney General Eric T. Schneiderman Announces Arrest Of Albany Broker For Allegedly Running Ponzi Scheme Of More Than $1 Million – Frederick E. Monroe, Jr., Senior Vice President Of Capital Financial Planning, LLC, Allegedly Solicited Over A Dozen Investors And Diverted Their Money For Personal Use – If Convicted, Defendant Faces Up To 25 Years In Prison



      Attorney General Eric T. Schneiderman today announced the arrest of Frederick E. Monroe, Jr., 59, of Queensbury, New York, charging him with stealing over $1 million from investors by fraudulently soliciting them to reinvest their retirement monies. Monroe is accused of luring clients with whom he had established relationships over his 20-year career as a financial planner, and then diverting their monies for his own personal use, as well as to pay back earlier investors he had defrauded. If convicted, the defendant faces up to 25 years in prison. Monroe was arraigned before the Honorable Judge Denise Randall in Guilderland Town Court where he pleaded not guilty. He is currently being held on $300,000 cash or bond bail.

SEC Charges Phony Hedge Fund Manager With Theft of Money Invested by Small Businesses



      The Securities and Exchange Commission today announced fraud charges against a New Jersey man accused of posing as a hedge fund manager and defrauding small companies out of more than $4 million.

Environmental & Energy

Why shale producers are happy with this EPA fracking study

      By MYRA P. SAEFONG, MarketWatch


      The energy industry agrees with the U.S. Environmental Protection Agency — at least when it comes to the findings of an EPA study on hydraulic fracturing.

US backs international regulations on aircraft emissions

      Ed Crooks in New York, FT


      The US is backing international regulations on carbon dioxide emissions from commercial aircraft after a formal finding that the gas contributes to global warming, officials said on Wednesday.


New Zealand cuts interest rates as dairy boom sours

      Jamie Smyth in Sydney, FT


      The collapse in oil prices has caused strains in the Gulf. Now New Zealand — sometimes known as the Saudi Arabia of milk — has been forced into its first interest rate cut in five years as the decade-long dairy boom curdles.

Cancellation of the Bonds due to Conversion and Full Conversion of Outstanding Bonds


SGX says some CDP customers received erroneous printed monthly statements



      SGX wishes to inform the public that some customers may have received erroneous May 2015 Central Depository (CDP) printed account statements.

Frontier Markets

Another Day, Another 15% Move for Dubai’s Silent Stock Winner

      by Dana El Baltaji, Bloomberg


      Not even Amlak Finance PJSC can explain why its stock has more than doubled in seven trading days.

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About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.