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John Lothian Newsletter: Prosecutors Are Not Amused by Hidden Trading Markups; The Coming Default Wave Is Shaping Up to Be Among Most Painful; Wall Street Is Edging Toward Win on Derivatives Capital Rule

First Read

Bits & Pieces
By JLN Staff
Elisabeth Samuels has joined GreenKey Technologies as managing director. She formerly worked for Eurex’s Chicago office.

The PTG has created a committee on diversity and made this a major issue for 2016. They are working with WILD on this issue.

BATS has agreed to renew their MarketsWiki Partner Level sponsorship for 2016-17. We appreciate their continued support. Bats was named yesterday’s MarketsWiki Page of the Day for announcing their IPO, again.

MarketsWiki is approaching 79 million page views and MarketsReformWiki is nearing 12 million.

Next week, Doug Ashburn makes his first trip through Asia. He will be attending the FOW Derivatives Asia conference April 12-13, moderating a panel on blockchain. The following week, April 18-19, he will be attending the World Federation of Exchanges‘ IOMA conference in Kuala Lumpur, Malaysia. There he will be leading a panel on trade reporting. In between, he will make a swing through Singapore, meeting with a number of our friends including a tour of the Singapore Exchange. If you will be attending either conference, or live in any of these cities and would like to schedule some time to meet with Doug, send him an email

John J. Lothian & Company, Inc. is negotiating a lease with GlenStar Properties to stay in the CBOT Building for the next five years. We will be expanding our editorial office and updating the office to increase comfortable collaboration.


2016 Exchange CEO Series: Hong Kong’s Charles Li Looks To Keep Building Bridges To China

As Hong Kong Exchange & Clearing looks at extending its services as a bridge to mainland China, HKEx CEO Charles Li said that it’s now embarking on a new three-year plan to bring China’s market to the rest of the world.

HKEx posted record earnings in 2015 and has a current market cap of about US$28 billion, posted the first full fiscal year with the London Metal Exchange under its umbrella and launched the Hong Kong-Shanghai Stock Connect, which links the two equity and, potentially, derivatives markets. The exchange ranked 17th among global derivatives markets, with annual volumes up 12.4 percent to 359 million contracts in 2015, according to the FIA Annual Volume Survey. Watch the video »

London Stock Exchange boss Xavier Rolet fires warning shot towards US rivals as merger battle heats up
William Turvill and Julian Harris – CityAM
The head of the London Stock Exchange has fired a warning shot towards American rivals that are threatening to gatecrash its proposed merger with the German company Deutsche Boerse.

****** I am pretty sure Jeff Sprecher has been called worse things than what Xavier Rolet has to say and does not give a hoot. Insults roll off like water off a duck’s back.


Alternative Trading Systems with Form ATS on File with the SEC as of April 1 2016 (April 5, 2016)

****** If you want to know why Reg NMS is a disaster, look at this list of ATS from the SEC. Then count the number of major market making firms. We went from lots of market makers and few exchanges to lots of exchange/ATS platforms and very few market makers. It is the worst in the options markets. In the options markets because of the auctions and directed order flow deals, there are just a handful of market making firms interacting with almost all of the customer order flow. That would be backwards. Time to roll back Reg NMS and bring competition into the real marketplace. Directed order flow deals are like having your brother-in-law standing next to you in the trading pit. That was never good for competition.


State Street bankers charged for secret commissions scheme; Former executives caught reaping millions of dollars of illicit profits from bank’s transition management business.
By Hayley McDowell – The Trade
Two former executives at State Street have been charged by US officials for their part in a scheme involving secret commissions within its transition management business.

***** Luckily the SEC can’t recommend stoning as a punishment.


FIA pledges to continue working with Basel Committee on impact of capital requirements
FIA welcomed the Basel Committee’s consultation on proposed revisions to the leverage ratio today, but expressed disappointment that the new framework does not include an offset for initial margin. The Committee called for data to further evaluate this critical issue, and FIA pledged to continue working with regulators and industry members to address on the impact of the leverage ratio on clearing.

***** The FIA will keep working at it until Basel gets it right.


The C.E.O. of ‘Hamilton’ Inc.; The producer Jeffrey Seller struck gold with Lin-Manuel Miranda’s Broadway hit about the founding fathers. Now he has a new challenge — managing a runaway success.
As the lead producer of the hit musical “Hamilton,” Jeffrey Seller straddles a divide between art and commerce. In his appearance and manner, he takes pains not to come across as a suit, the money guy in a bohemian world of waiters and food runners who have scraped, sweated and auditioned their way onto Broadway. Trim and fit from a regimen of swimming and yoga, he naturally folds himself into his surprisingly small Midtown office, which has room for a desk, a couch and not much else.

***** Hamilton was always a 10.


FOW Derivatives Asia, 12-13 April, Hong Kong
FOW returns to Hong Kong on 12-13 April for the next instalment of Asia’s largest derivatives conference. Join over 600 delegates to hear the latest thinking on the Chinese and Asian derivatives markets. Topics this year include realising Asia’s ambitions to becoming a commodity powerhouse, next steps for the Connect initiative and the outlook for the internationalisation of China. The event is free to attend for banks, brokers, props and the buyside. For more information and to register, click below.

***If you will be attending the conference and would like to schedule some time to meet with Doug Ashburn, who will be there moderating a panel on blockchain, send him an email


Tuesday’s Top Three
The Igor Oystacher streak continues. Whenever his name appears in a headline, it is the top clicked story of the day. In yesterday’s story by Bloomberg’s Matt Leising (whose stories also seem to float to the top of the click race), Oystacher says that speed chess, not spoofing, is behind his trades. Oystacher led all clicks despite not being the biggest story of the day, in our opinion. That would be that ICE is getting the final pieces in place for its impending bid for London Stock Exchange Group. Third place went to (Re) Introducing TradeCo, the prop trading subsidiary at TT, from TT‘s Trade Talk blog.

GMI-Blockchain Conference

Lead Stories

Prosecutors Are Not Amused by Hidden Trading Markups
By Matt Levine – Bloomberg
The financial industry is largely an industry of middlemen, and some of its deepest and most creative thinking goes into finding ways to get paid for intermediating transactions. There are two classic, time-honored, traditional ways to get paid:

The Coming Default Wave Is Shaping Up to Be Among Most Painful
Claire Boston, Carol Ko – Bloomberg
Losses on defaults are growing higher as leverage rises; Bond prices may not reflect the trouble that’s brewing
When the next corporate default wave comes, it could hurt investors more than they expect.

Wall Street Is Edging Toward Win on Derivatives Capital Rule
Silla Brush, Bloomberg
Wall Street is making progress in its effort to soften a crisis-era capital requirement that banks argue places onerous expenses on trading. The Basel Committee on Banking Supervision on Wednesday proposed a new method for banks to assess their exposure to derivatives, which could wind up lowering the amount of capital lenders need to meet restrictions on leverage. The committee, which includes the Federal Reserve and European Central Bank, also took steps toward alleviating banks’ concerns that they’re taking a capital hit on the billions of dollars in collateral they receive from customers for handling derivatives.

Global Bond Yield Plunges to Record-Low 1.3% in Warning Sign
Wes Goodman, Anooja Debnath – Bloomberg
Bonds gain 3.6% in 2016 while stocks drop 1.5% after dividends; `The U.S. cannot pull up the world economy’: Sumitomo
Global bond yields fell to a record, a warning sign for the worldwide economy.

Rule change raises stakes in LSE-Deutsche Boerse merger
Marion Dakers – Telegraph
A tweak to new market rules has raised the stakes in the London Stock Exchange’s bid to merge with its German rival Deutsche Boerse.

NYSE Launches New Suite of Services for Small- to Mid-Cap Growth Companies
The New York Stock Exchange, part of the Intercontinental Exchange (NYSE: ICE) global network of exchanges, today introduced an enhanced range of services for issuers on NYSE MKT, which exclusively serves small- to mid-cap growth companies.

Global regulators take softer line on bank capital
By Huw Jones – Reuters
Global regulators on Wednesday proposed softer capital requirements for banks that trade large numbers of financial derivatives in the latest sign of a more accommodative stance towards the finance industry.

Fidessa and Alpha Omega partner to offer one-stop-shop for post-trade
Fidessa group plc today announced it has signed a partnership agreement with Alpha Omega that will leverage Fidessa’s post-trade Affirmation Management Service (AMS). This utility provides alternative low-cost affirmation processing to Fidessa’s extensive community of buy-sides and sell-sides world-wide.

***DA: Busy week for Fidessa in the newsletter. If you missed yesterday’s paper on the changing counterparty landscape for the buy side, check it out on HERE


Regulation AT: If you think it does not apply to you, think again
TheBooks Blog – Dana Comolli, DMAXX
Algorithmic trading typically conjures up thoughts of Michael Lewis’ “Flash Boys” and high frequency traders. The objections to these market participants have come from many areas and they have been blamed for bouts of volatility that make little sense. The response from regulators has been expected, but certainly not in the scattershot form of Regulation AT (CFTC proposed regulation RIN 3038-AD52, Regulation Automated Trading). The CFTC states as its purpose “to address the risks of algorithmic trading through a series of pre-trade risk controls and other measures that AT Persons, clearing member FCMs and DCMs must implement.” Any new regulatory proposal raises hackles, but this one, with its all-inclusiveness as well as potential risks, has caused outright howling.

Seven essential guiding principles to boost financial inclusion laid out in new report
World Bank
Seven guiding principles to help countries increase financial inclusion were set out in a report released today by the Committee on Payments and Market Infrastructures (CPMI) and the World Bank Group. The Payment aspects of financial inclusion report builds on a document that underwent public consultation in late 2015 and seeks to tackle barriers to the adoption and usage of transaction accounts, which sit at the heart of retail payment services.

EMIR: ESMA Proposes One-Day Margin Period Of Risk For CCP Client Accounts
The European Securities and Markets Authority (ESMA) has today sent its amended regulatory technical standards (RTS) under the European Market Infrastructure Regulation (EMIR) for endorsement to the European Commission. The RTS detail the margin period of risk (MPOR) for CCP client accounts, e.g. the amount of initial margins collected by a CCP. The amended RTS would allow EU-based CCPs to margin on a one-day MPOR basis.

ESMA backs competition and choice in derivatives clearing
Automated Trader
The European Securities and Markets Authority said it sees no need to temporarily exclude exchange-traded derivatives (ETDs) from non-discriminatory access to central counterparties and trading venues, which will be introduced by MiFID II and MiFIR. MiFIR requires ESMA to assess whether ETDs should be exempted for a period of 30 months from the non-discriminatory access provisions.

OTC derivatives market to be revamped
Hindu Business Line
The RBI will bring out a consultative paper outlining its approach to implementation of margin requirements for over-the-counter derivatives before the month-end. This follows a global framework on margin requirements for non-centrally cleared derivatives as agreed by the Basel Committee on Banking Supervision (BCBS) and the International Organisation of Securities Commissions (IOSCO) unveiled in March 2015.

US makes concessions on retirement advice fees
Stephen Foley in New York – FT
The investment industry has wrung a series of concessions from the Obama administration in new rules that the White House says will save US retirement savers $17bn a year in hidden fees, outsize commissions and poor returns from conflicted financial advice.

CFTC’s Market Risk Advisory Committee to Meet on April 26, 2016
The U.S. Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee (MRAC) will hold a public meeting on April 26, 2016 at the CFTC’s Washington, DC, headquarters.

Exchanges & Trading Facilities

NZX to launch NZ milk price futures and options contracts
NZX Limited
NZX has received formal approval from the Financial Markets Authority and the Reserve Bank of New Zealand for its proposed milk price futures and options contracts, expected to launch in May 2016. The futures and options contracts are designed to address growing demand from producers and purchasers of milk products wishing to manage risk relating to price fluctuations. For example, both contracts can help New Zealand dairy farmers to mitigate the financial risks associated with a variable milk price.

SGX reports market statistics for March 2016
Total Securities market turnover value rose 13% month on month and rose 9% year on year to S$27.3 billion, during 22 trading days compared to 19 in February 2016 and 22 in March 2015.; Securities daily average value (SDAV) fell 2% month on month and rose 9% year on year to S$1.2 billion.; Market turnover value of Exchange Traded Funds (ETFs) was S$314 million, up 51% month on month and down 13% year on year.; There was 1 new Catalist listing, raising S$7.2 million.
There were 36 new bond listings, raising S$21.3 billion.; Total market capitalisation value of 770 listed companies stood at S$894.3.billion as at end March 2016.; Total Derivatives volume was 17.1 million, up 23% month on month and up 15% year on year.; Equity Index Futures volume was 13.7 million, up 18% month on month and up 3% year on year.

Futures daily volume up 5% y/y, cash equities up 16% y/y
1Q16: Futures daily volume up 11% y/y, cash equities up 25% y/y
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported March and first quarter 2016 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at in the Monthly Statistics Tracking spreadsheet.

trueEX Expands To Support London Business Hours
trueEX, the fastest growing interest rate swap trading platform, now supports market activity during London business hours due to rapidly growing client demands in both the US and across Europe.

Rolet denies Deutsche Börse deal would increase financial risks
By David Wighton – Financial News
The chief executive of London Stock Exchange Group hit back at critics of its proposed $30 billion merger with Deutsche Börse, denying that a combined group would pose greater risk to the global financial system.


David Murray apologises for comparing actions of ASIC to Nazi Germany
Former Commonwealth Bank chief David Murray has apologised after he compared the actions of the nation’s corporate watchdog to those of Nazi Germany.

Panama Secrecy Leak Claims First Casualty as Iceland PM Quits
Omar Valdimarsson – Bloomberg
Decision follows protests that drew thousands of Icelanders; Finance Minister says key goal still exiting capital control
The Panama secrecy leak claimed its first casualty after Iceland’s Prime Minister Sigmundur David Gunnlaugsson stepped down following allegations he had sought to hide his wealth and dodge taxes.

Yes, Bernie Sanders Knows Something About Breaking Up Banks
Peter Eavis – NY Times
Bernie Sanders probably knows more about breaking up banks than his critics give him credit for. The Daily News on Monday published an interview with him that led some commentators to say he didn’t know how to break up the country’s biggest banks. Downsizing the largest financial institutions is one of Mr. Sanders’s signature policies, so it would indeed raise questions about his candidacy if he had little idea of how to do it.

Hedge Funds & Managed Futures

Responsibility for detecting market abuse looms over buyside
By James Rundle – Financial News
A nice break by the sea might be out of the question for compliance officers at European trading and investment firms this summer.

Ackman to face investor grilling after record quarterly loss
Billionaire investor William Ackman is set to face close questioning on Wednesday when he details his hedge fund’s biggest-ever quarterly loss and explains how he plans to handle the investment that led to the fall – Valeant Pharmaceuticals International.

Currency Traders Brace for Wild Ride as Volatility Curves Invert
Rachel Evans
Gauges of short-term price swings exceed longer-term measures; Hedge funds are preparing for more turbulence after Q1 losses
The $5.3 trillion-a-day foreign-exchange market is getting turned on its head.

Global Profits Recession Leaves Investors With Nowhere to Hide; Poor productivity, weak demand, and no pricing power cut earnings
Rich Miller – Bloomberg
The profits recession is global — and that’s bad news for the world economy and for equity markets.

Banks & Brokers

Thomson Reuters Acquires WM/Reuters Foreign Exchange Benchmarks From State Street Corporation
Thomson Reuters
Thomson Reuters today announced it has acquired WM/Reuters FX benchmark rate calculation business of The World Markets Company (WM) from State Street Corporation. The acquisition will be effective immediately

Brokers Upended as Obama Toughens Rules for Retirement Accounts
Robert Schmidt, Margaret Collins – Bloomberg
Labor Department requires firms to put client interests first; Rule softened from proposal after finance industry lobbying
U.S. brokers managing retirement accounts must adhere to tough new standards under an Obama administration rule released Wednesday that aims to protect millions of savers from conflicted investment advice.

Biggest Banks to Face Tougher Debt Limits to End Too-Big-to Fail
John Glover – Bloomberg
Basel considers raising minimum capital or requiring buffer; Committee seeks feedback on ways to meet new requirements
Global regulators are considering how to raise capital requirements for the world’s biggest banks as they implement tougher debt-financing limits designed to rein in too-big-to fail lenders.

Barclays issues Q1 warning on investment bank
By Rory Gallivan and Max Colchester, Financial News
Barclays on April 5 reiterated that its investment banking operations for the first quarter of the 2016 calendar year would perform worse than in the same period the previous year, amid difficult market conditions.

ABN Amro cuts rates swaps from EUR24bn covered bond programme; High cost of downgrade triggers forces Dutch bank to consider alternative hedge
ABN Amro
Lukas Becker –
ABN Amro has removed derivatives hedges from its EUR24 billion ($27.3 billion) covered bond programme due to costs that would arise in the event of the bank’s downgrade. It is at least the fourth European bank to do so since 2013. The Dutch bank was using interest rate swaps to hedge mismatches between covered bond coupons and the underlying mortgages, but triggers embedded in the instruments would have required ABN Amro to find a replacement counterparty if it fell below a threshold credit rating….

Clearing & Settlement

Unresolvable clearing houses pose ‘enormous risk’; CCPs, the TLAC and Basel III capital rules are all cause for concern, Minnesota Fed hears
Peter Madigan –
The concentration of over-the-counter derivatives trades in a handful of central counterparties poses “incredibly dangerous” risks to the global financial system, a leading academic has warned, not least because no resolution regime has been developed to facilitate the orderly wind-down of a clearing house in the event of failure. “We have a new too-big-to-fail problem: watch out for those clearing houses. There is no insolvency [process] for them at all. I am now involved with the Commodity…

OCC Appoints Two New Members to Board of Directors
Business Wire
In its role as the foundation for secure markets, OCC, the world’s largest equity derivatives clearing organization, today announced that Susan E. Lester, a long-time banking executive, has joined the board of directors as a Public Director, replacing Matthew B. Gelber of Bitterroot Asset Management, LLC, and William T. Yates of TD Ameritrade has joined the board as a Member Director, replacing Judith M. Kula of Wolverine Execution Services, LLC. Lester and Yates were elected to three-year terms.

Blockchains and virtual bridging currencies
FT Alphaville
You may have come across this story about Barclays partnering up with a “Goldman-backed” bitcoin payments app called Circle International Financial, which uses bitcoin to transfer central bank currencies as digital money increasingly moves into mainstream finance, and thought “wow” that sounds innovative and exciting. But is it? Is it really all that innovative?

Eurex Clearing Transforms Access Model
Markets Media
This summer the German clearing house is launching ISA Direct, a new membership type that allows buy-side firms to have a direct contractual relationship with the CCP. The targeted clients are regulated clients domiciled in a member state of the European Union and Switzerland including insurance and financial services companies, pension funds and asset managers. In June this year the mandatory clearing obligations for standardized OTC derivatives in Europe will start in a phased approach.

Regulation a Doubled-Edged Sword for Blockchain Clearing and Settlement
Let’s start with a fact. Interbank settlement takes days to clear because of regulation and a multi-party intermediary infrastructure. This is also commonly accepted as a challenge the blockchain could help solve. Every segment of the global capital markets ecosystem today is getting ready for some type of leap to address friction in the settlement lifecycle.

Derivatives clearing still at risk after Basel III review, says FIA; The Basel III capital framework is under intense scrutiny from banks and clearing brokers.
By Joe Parsons – The Trade
The Futures Industry Association (FIA) has criticised a recent review of the Basel III leverage ratio framework, arguing it has failed to identify the impact the capital rules will have on holding client collateral.

Indexes & Products

JP Morgan adds currency-hedged ETFs to smart beta suite
ETF Strategy
The new offerings provide currency-hedged exposure to two of JP Morgan’s existing ETFs, the JP Morgan Diversified Return Europe Equity ETF (JPEU) and the JP Morgan Diversified Return International Equity ETF (JPIN).

Great Performance by High Yield, One Time or Early Signs?
Indexology – S&P Dow Jones Indices
As with the weather for the northern hemisphere, the U.S. high-yield market seems to be making a comeback. The 0.54% return in February for the S&P U.S. Issued High Yield Corporate Bond Index appears to be the green shoot of return for high-yield bonds. March 2016 followed the prior month’s gain with a blossom of its own. The index returned 4.5% for the month, which was the largest monthly return since October 2011’s return of 5.07%. Year-to-date, the index returned 3.36%, which is refreshing to high-yield investors, who, before this month, had not seen a positive year-to-date return since November 2015.

BlackRock considers launching currency-hedged global bond ETF in Tokyo
U.S. asset manager BlackRock is considering launching an exchange traded fund (ETF) on the Tokyo Stock Exchange (TSE) that will allow Japanese investors facing negative yields at home exposure to international bonds without currency risks, a senior BlackRock executive told Reuters.

First smart beta ETF from NASDAQ AlphaDEX index family issued by First Trust on Xetra
Deutsche Boerse
Deutsche Börse Cash Market: The first equity index ETF from First Trust has been tradable via Xetra and Börse Frankfurt since Wednesday. Smart beta ETFs enable European investors to participate in the performance of the NASDAQ AlphaDEX Germany Index with the aim of generating positive alpha compared to indices traditionally weighted by market capitalisation.

This ETF Is A Potentially Important Gauge Of Risk Appetite
There is no dearth of exchange-traded funds that have “benchmark” status, and plenty of those are believed to be sound gauges of risk appetite. One of the more overlooked ETFs in terms of gauging market sentiment and risk appetite might just be the Ishares MSCI Europe Fincls Sctr Indx Fd

Index IDEA: Russell Pure Style Indexes further capture value-driven US small cap rise in March
FTSE Russell
The surge in US small cap stocks in March led by value comes into even sharper focus when viewed through the lens of the Russell Style Indexes. The US small-cap Russell 2000® Index, while still negative year-to-date, has risen 8% in the month of March, with value-oriented stocks leading the way as reflected by an 8.3% return for the Russell 2000 Value Index. And the recent value trend for US small cap stocks is further captured by the Russell 2000 Pure Value Index, which has risen nearly 10% in March.


Microsoft seals blockchain deal with major banks
Computer Business Review
Microsoft has formed a partnership with banks to speed up adoption of blockchain technology in the financial industry. R3 is a New York-based startup, which counts Goldman Sachs, Citigroup, Bank of America, and Morgan Stanley as its major clients. The partnership enables the banks to gain open access to Azure.
Under the deal, Microsoft will provide cloud-based tools, services and infrastructure for R3 lab locations around the world, as well as dedicated technical architects, project managers, lab assistants and support services.

Bitcoin Start-Up Gets an Electronic Money License in Britain
The British government has pushed through its first licensing of a virtual currency company, underscoring its desire to make London a hub for the development of financial technology.

Barclays partners with Goldman-backed bitcoin payments app
Aime Williams – FT
Barclays is linking up with Circle Internet Financial, a US mobile payment start-up backed by Goldman Sachs that uses bitcoin to transfer central bank currencies, as digital money increasingly moves into mainstream finance.


Federal Court Orders UAE Residents Heet Khara and Nasim Salim to Pay Combined Civil Monetary Penalties of $2.69 Million for Spoofing in the Gold and Silver Futures Markets
The U.S. Commodity Futures Trading Commission (CFTC) today announced that a federal court in New York issued a Consent Order imposing a permanent injunction against CFTC Defendants Heet Khara and Nasim Salim, residents of the United Arab Emirates (UAE), prohibiting them from engaging in spoofing in violation of the Commodity Exchange Act. The Order requires Khara to pay a $1.38 million civil monetary penalty and Salim to pay a $1.31 million civil monetary penalty to settle CFTC charges of spoofing in the gold and silver futures markets. The Order also imposes permanent trading and registration bans on Khara and Salim.

CFTC Orders Staten Island-Resident Michael Pucciarelli and his Company, Badge Trading LLC, to Pay a $280,000 Penalty for Engaging in Unlawful Noncompetitive Exchange for Physical Transactions
The CFTC Order requires the Respondents jointly to pay a $280,000 civil monetary penalty and imposes four-year trading and registration bans. The Order also requires the Respondents to cease and desist from further violations of the Commodity Exchange Act (CEA) and a CFTC regulation, as charged.

Ex-State Street pair indicted on fraud charges
By Kate O’Keeffe, WSJ via Financial News
US federal prosecutors have charged two former senior executives at State Street Corp with running a scheme to defraud clients by secretly charging commissions on billions of dollars in securities trades.

Trial Opens for Ex-Barclays Employees in Libor Case
A group of former Barclays employees plotted to improve its own trading results by “dishonestly rigging” an important global benchmark interest rate known as Libor, British prosecutors said on Tuesday as the criminal trial of the former traders got underway.

Judge won’t refer N.Y. broker for prosecution over SEC testimony
A U.S. judge on Tuesday stopped short of urging that a former New York stockbroker face perjury charges over testimony at an insider trading trial, but left U.S. securities regulators the option to recommend prosecutors pursue charges.

Environmental & Energy

Carbon Recovers as Germany Open to Talks on Stronger EU Market
Prices in the world’s biggest cap-and-trade carbon program rose as much as 2.1 percent to 5.35 euros a metric ton, the highest level in six weeks. They are still 34 percent down this year amid a persistent oversupply of permits to pollute. The market failed to draw support from the global climate deal reached in Paris and and EU agreement to introduce in 2019 the Market Stability Reserve, a tool which will help limit the glut of allowances.

Lead EU carbon policymaker calls for end to UK price floor to help steel
Britain should abolish its carbon floor price to help the hard-hit steel industry, the lawmaker shepherding a reform of the EU Emissions Trading System (ETS) through parliament said on Tuesday. With the British government looking for ways to save jobs threatened by the sale of Indian firm Tata Steel’s British plants, Scottish Conservative Ian Duncan said repealing the carbon floor was one of the few tools available to it.

ESA sends crude oil to space to test Earth’s underground reservoirs
RT News
The European Space Agency has partnered with Chinese and French oil giants to launch containers of highly pressurised crude oil into space. The experimental cargo needed to study deep underground oil wells blasted into orbit on China’s SJ-10 satellite.

Clean energy a great opportunity: Kerry
The consequences of failing to harness renewable energy sources such as the sun will be “devastating,” according to U.S. Secretary of State John Kerry. “It took us decades to understand that what can seem like the cheapest sources of energy in the short term actually … (have) insurmountable costs in the long term,” Kerry, speaking at the Bloomberg New Energy Finance Summit in New York, said on Tuesday.

Japan’s New Energy Rules Could Make It a Paradise for Renewables
Japan is a weird place. But not for any of the reasons you’re thinking. I’m talking in terms of energy, because among industrialized, consumer-ized, electronically-driven nations, Japan probably has the world’s worst portfolio of homegrown energy resources—it’s the second largest net importer of fossil fuels. But it gets weirder. This month, the island nation rewrote its energy rules to give consumers the power to choose which energy source it wants.


China Said to Plan $155 Billion of Sour Loan-Equity Swaps
Bloomberg News
Swaps may lift banks’ net profits by 4% a year, Huatai says; Banks’ soured credit at highest in a decade as growth slows
China may approve as soon as this month a plan to make it easier for banks to convert soured debt into equity, according to a person with knowledge of the matter.

Where to Search for Chinese Commodity Demand; A hard commodity salesman used to have a simple pitch: “China hasn’t fully urbanized.”
Commodity salesmen used to have a simple pitch: “China hasn’t fully urbanized.”

HSBC thinks China’s stock market resurgence could be the start of something big
Business Insider
While many continue to question the fundamentals underpinning the rally — something that has seen the benchmark Shanghai Composite index rally 16% in a little over a month — Steven Sun, China equity strategist at HSBC, isn’t perturbed, suggesting it could be the start of an even greater move higher.

How the Fed may be buying time for China
Some analysts say Federal Reserve Chair Janet Yellen’s dovishness gives the world’s second-largest economy breathing room to progress on its economic and currency policies — at least until the second half of the year, when another rate rise is possible

Frontier Markets

S&P and CSE Sector and Industry Group Indices launched
Lanka Business Online
S&P Dow Jones Indices, one of the world’s leading index providers, and the Colombo Stock Exchange today jointly announced the launch of the S&P/CSE Sector and Industry Group Indices. The comprehensive index series is designed to measure the performance of various sectors and industry groups within the Sri Lankan equity market, as defined by the Global Industry Classification Standard.

NSE seeks Sebi nod for commodity futures trade
By Ram Sahgal, ET Bureau
NSE, the country’s largest stock exchange, has recently written to Sebi seeking regulatory approval to launch a commodity futures trading segment. The other leading stock bourse, BSE, had made a similar request some months ago.

Women In ETFs To Hold Their First Event In Dublin On April 6th
Women in ETFs (WE) is holding its first event in Dublin at 5pm on Wednesday April 6th hosted by PwC at their office in Dublin. Women in ETFs is the first women’s group for the ETF industry. Founded in January 2014, this non-profit organisation bringstogether women and men in the ETF industry with amission to further the careers of women by leveraging our collective skill and ambition.


Booth gets new gift from alum Gleacher for veteran scholarships
The University of Chicago’s Booth School of Business is getting $10 million to fund scholarships for military veterans from alumnus and investment banker Eric Gleacher, whose $15 million gift in 1996 put his name on the school’s downtown campus.

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About Author

Doug Ashburn is a former editor-at-large of John Lothian News. He left in late 2016 and is now the managing editor of T3 Custom.