Breaking News

John Lothian: Trading Tech Accelerates Toward Speed of Light; PwC must face $1 billion MF Global malpractice lawsuit; Bitcoin Exchange to Spread Losses of Hack

First Read

Bits & Pieces
By John J. Lothian

Nick Notorangelo of Riskbone is a hero. He helped save a young man’s life last week after the 27-year old man had been shot in the neck during an apparent drug deal in the Lakeview neighborhood on Chicago’s north side. Here is the story. Nice work Nick!

CME Group’s Trading Tech 300 merit badge program offering the law and technology merit badges was a big success. CME Group Chief Intellectual Property Counsel and merit badge instructor Matthew Kelly, and some associates, did a great job with the classes. It was a diverse group of scouts who attended, including one who has attended every single Trading Tech 300 class offered. We shared some leftover MarketsWiki Education backpacks with the scouts to thank them for their participation.

There has been a request from the families of the scouts participating in the Trading Tech 300 program for some firm to offer the Emergency Preparation merit badge. Please contact me if emergency preparation is something you do and you are interested in hosting a merit badge clinic teaching the requirements

Next up for Trading Tech 300 is the Chess and Public Speaking merit badge clinics at Advantage Futures on August 24.

Jim Kharouf is taking the next two weeks off. While he will be up in the woods of Wisconsin, he has the good sense not to sleep in a tent.

Gary DeWaal of Katten Muchin Rosenman LLP is back with Bridging the Week, after the recent death of his father. Nice to have you back Gary.

This is the last week of the summer for me before my children head back to school: Tim back to Mizzou, Kat off to University of Northern Iowa and Robby back to York Community High School.

Enjoy the week!

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How Deutsche Börse fosters innovation with corporate venture capital; Interview with DB1 Ventures’ Ankur Kamalia
Eurex
The recent jointly published study by DB1 Ventures and Celent, “The future of fintech in capital markets,” which highlights the power of future collaboration between leading financial infrastructure players and Fintech firms, gave us a good opportunity to talk to the Managing Director of DB1 Ventures and Group Venture Portfolio Management, Ankur Kamalia.
goo.gl/volwD8

****** If we could only merge FinTech with Pokemon Go, we would really have something.

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CME Group Announces New Steps to Enhance Live Cattle Futures Markets
Press Release
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will take a number of actions designed to enhance Live Cattle futures markets. These new measures are based on continued collaboration with and feedback from the cattle industry as well as the results from an independent study conducted by Informa Economics.
goo.gl/biHJkK

***** We shot a video interview with CME Group’s Dave Lehman, which will be out this week.

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Strengthening of the Regulatory framework for Algorithmic Trading & Co-location’
SEBI
Discussion paper on ‘Strengthening of the Regulatory framework for Algorithmic
Trading & Co-location’
goo.gl/Oa96gd

***** Some reading for our friends interested in the Indian markets.

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Rob D’Arco, Rival Systems – Technology: the Center of the (Financial) World
MarketsWikiEducation.com

“It’s an exciting time for technology in the trading industry. Never before has technology been so instrumental across all aspects of the financial markets.”

When Rob D’Arco was tasked with the design of an options trading platform 15 years ago, he was admittedly nervous. Though his management consulting and technology background had prepared him for the assignment from a competency standpoint, he knew nothing about trading environments and trader mentality, aside from a few horror stories about working with traders and trading groups.

In the end, he was pleasantly surprised by how easy it was to work with the traders, who took the time to patiently work with him on the design and building of the platform. The lesson? The traders had a vested interest in getting the right technology into their hands as quickly as possible, which aligned perfectly with his interest in learning about the markets.

The core of the system they built is now a key component of his firm, Rival Systems, which supplies technology and technology solutions to market participants. He says success in the fintech world comes from a repeating cycle of innovation, incubation and monetization. Technology, for all its benefits, “is worthless if it does not help the company make money,” says D’Arco.

Sounds like he understands the trader mentality quite well.

Watch the video »

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Balance, Fairness and a Proudly Provocative Presidential Candidate
Jim Rutenberg – The New York Times
If you’re a working journalist and you believe that Donald J. Trump is a demagogue playing to the nation’s worst racist and nationalistic tendencies, that he cozies up to anti-American dictators and that he would be dangerous with control of the United States nuclear codes, how the heck are you supposed to cover him? Because if you believe all of those things, you have to throw out the textbook American journalism has been using for the better part of the past half-century, if not longer, and approach it in a way you’ve never approached anything in your career. If you view a Trump presidency as something that’s potentially dangerous, then your reporting is going to reflect that. You would move closer than you’ve ever been to being oppositional. That’s uncomfortable and uncharted territory for every mainstream, nonopinion journalist I’ve ever known, and by normal standards, untenable.
goo.gl/hAP4me

**** Excerpt: Journalism shouldn’t measure itself against any one campaign’s definition of fairness. It is journalism’s job to be true to the readers and viewers, and true to the facts, in a way that will stand up to history’s judgment. To do anything less would be untenable.

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Fed’s Powell warns US at risk of being trapped in low growth; Era of weak long-term growth a rising concern for central bank’s board member
by: Sam Fleming and Joe Rennison in Washington DC – FT
There is an increasing risk that the US economy has become trapped in a prolonged period of subdued growth that requires lower official rates than was previously expected, a leading Federal Reserve policymaker has warned.
/goo.gl/P1MVAy

***** I have believed, and continue to believe, we will see long term interest rates very low for a long time. As the Baby Boomers fade away, so do their spending habits. I am at the end of the Baby Boom and right before the Baby Bust in demographic terms. The first 25 years of the Baby Boom saw long term interest rates in the U.S. at 3 percent or below. Maybe we are getting back to the old normal.

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Bond Market’s Big Illusion Revealed as U.S. Yields Turn Negative
Brian Chappatta, Andrea Wong, Shigeki Nozawa – Bloomberg
Currency hedging costs soar for overseas buyers of Treasuries; Yields on 10-year notes zeroed out for investors in yen, euros
For Kaoru Sekiai, getting steady returns for his pension clients in Japan used to be simple: buy U.S. Treasuries. Compared with his low-risk options at home, like Japanese government bonds, Treasuries have long offered the highest yields around. And that’s been the case even after accounting for the cost to hedge against the dollar’s ups and downs — a common practice for institutions that invest internationally.
goo.gl/we8hBq

***** I am waiting for mortgage rates to go negative and for the bank to pay me to live in my house.

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Bridging the Weeks by Gary DeWaal: July 25 to August 5 and August 8, 2016 (Exchange Fees; Cross Border Relief; Leaking Confidential Information; OATS; Times They Are A Changin’; Dad)
By Gary DeWaal, Katten Muchin Rosenman LLP
The Commodity Futures Trading Commission again fined a futures commission merchant for not timely reconciling exchange fees and paying back customers that were charged too much, despite acknowledging the complexity and manual nature of dealing with exchange fees and discounts. Separately, CFTC staff again delayed the effective date of its own advisory requiring non-US swap dealers that enter into swap transactions with other non-US persons that are arranged, executed or negotiated in the United States to comply with CFTC-mandated transaction-level requirements. Additionally, EUREX continues to roll out its ISA Direct clearing membership for clients, while CME Group still awaits CFTC approval for its equivalent Direct Funding Participant clearing membership. As a result, the following matters are covered in this week’s edition of Bridging the Weeks:
goo.gl/uUxJ24

***** Nice to have Gary back.

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Friday’s Top Three
Our top story Friday came from Risk.net, Nasdaq energy futures face questions over ‘artificial’ volume. The second most popular story was a bit of a surprise considering it is not a financial article: I Ran the C.I.A. Now I’m Endorsing Hillary Clinton. Last but certainly not least was the FOW story, TT’s McDonnell to Return to Sydney. FYI, Robbie McDonnell was Friday’s MarketsWiki Page of the Day.

Lead Stories

Trading Tech Accelerates Toward Speed of Light; Financial-technology startups are arming traders with devices that shave precious nanoseconds off stock-market bets
By VERA SPROTHEN – WSJ
A handful of financial-technology startups are arming many of the world’s most powerful trading firms and exchanges with devices that promise to handle stock-market transactions at rates rivaling the speed of light, as the race for speed in financial markets remains alive.
goo.gl/cnOmaS

PwC must face $1 billion MF Global malpractice lawsuit: U.S. judge
Jonathan Stempel – Reuters
A federal judge rejected PricewaterhouseCoopers’ bid to dismiss a $1 billion lawsuit accusing the accounting firm of professional malpractice for helping cause the October 2011 bankruptcy of MF Global Holdings Ltd, a brokerage once run by former New Jersey Governor Jon Corzine.
goo.gl/Jw10g3

Bitcoin Exchange to Spread Losses of Hack; Bitfinex, the digital-currency exchange that lost $65 million to hackers last week,plans to spread the losses among all its users
By JOANNE CHIU – WSJ
Bitfinex, the digital-currency exchange that lost $65 million to hackers last week, plans to spread the losses among all its users, including those not directly affected by the hack.
goo.gl/FesCy9

Speed Bump Wars Ahead?; NYSE and Nasdaq may try to beat IEX at its own game.
By Terry Flanagan, Managing Editor · Markets Media
If you can’t beat ’em, join ’em. That’s the approach NYSE Group and Nasdaq may take with IEX Group, which plans to go live as an exchange later this month.
goo.gl/yd8jh9

Legal tussle looms for bitcoin holders in hacked Bitfinex
Izabella Kaminska – Financial Times
After this week’s hack of nearly 120,000 bitcoins from Hong Kong-based Bitfinex exchange, attention is turning to how victims of the fraud will be compensated, if at all. A key question for account holders concerns their legal rights after a loss in the region of $70m. Bitfinex is yet to announce details, but Zane Tackett, the company’s director of community and product development, has been posting messages on online forums suggesting some losses will have to be socialised among users.
/goo.gl/2nm2Y9

We’re in a Low-Growth World. How Did We Get Here?
Neil Irwin – NY Times
One central fact about the global economy lurks just beneath the year’s remarkable headlines: Economic growth in advanced nations has been weaker for longer than it has been in the lifetime of most people on earth. The United States is adding jobs at a healthy clip, as a new report showed Friday, and the unemployment rate is relatively low. But that is happening despite a long-term trend of much lower growth, both in the United States and other advanced nations, than was evident for most of the post-World War II era.
goo.gl/RQH8mD

Stock exchange merger ‘will leave small investors worse off’
Harry Wilson, City Editor – The Times
Europe’s leading organisation for retail investors has called on Brussels to block the London Stock Exchange’s merger with Deutsche Börse, saying the combined business would be a “quasi-monopoly”.
goo.gl/XguG1p

Dijsselbloem Urges Officials to Consider Competition in LSE Deal
By John Detrixhe and Anne van der Schoot – Bloomberg
Dutch Finance Minister Jeroen Dijsselbloem has asked officials in Brussels to be mindful of the ability of other companies to provide services, as Deutsche Boerse AG and London Stock Exchange Group Plc pursue a tie-up to create the region’s dominant exchange operator.

The Insurance Industry Has Been Turned Upside Down by Catastrophe Bonds; Investors are flocking to securities that shield the risks of hurricanes, pandemics and hackers; reinsurers are suffering
By LESLIE SCISM and ANUPREETA DAS – WSJ
Catastrophe bonds were invented in the early 1990s to help insurance companies mitigate the risk of disasters such as hurricanes and earthquakes. Today, like the very storms they protect against, catastrophe bonds are upending the insurance business.
goo.gl/LdJubc

Hacked Bitcoin Exchange Getting Back Online After Users Lose 36%
Yuji Nakamura – Bloomberg
Bitfinex platform restarting with limited trading functions; Users will jointly share losses after hacking attack
The Hong Kong-based bitcoin exchange that lost about $71 million to hackers said it is beginning to bring its system back online, after telling users they will lose 36 percent of their deposits.
goo.gl/i8yNiq

Short Seller That Decimated Hong Kong Stock Eyes New Targets
Bloomberg
After a quiet start to the year, short sellers may be gearing up for a busy few months in Hong Kong.
Short-seller Glaucus Research Group is actively looking into the market and may publish another two reports this year, director of research Soren Aandahl said in a phone interview last month.
goo.gl/sIYMFn

Oversupply Beats Brexit as London Office Risk, UBS Says
Sharon R Smyth – Bloomberg
Spain, Italy and Germany are best Europe investment locations; Japanese funds may purchase $200 billion in Europe over decade
The wave of office buildings under construction in London is a bigger threat to rents and values than the risk of companies moving out after the U.K.’s vote to leave the European Union, according to UBS Group AG.
goo.gl/UYOCTN

How a Hairdresser’s Lawsuit Could Spell Trouble for Brexit
Patrick Gower, Kit Chellel – Bloomberg
London lawyers bring claims to court over U.K. leaving EU; Case could pit the power of the judges against U.K. lawmakers
In the hall of London’s Inner Temple, a grand dining chamber with stained-glass windows and coats of arms adorning the walls, 300 lawyers assembled to complain about Britain’s exit from the European Union.
goo.gl/5NnI9P

Deutsche Börse’s Search for a Home
BY MICHAEL BRÄCHER, YASMIN OSMAN AND KATHARINA SLODCZYK – Handelsblatt
Though the shareholders of Deutsche Börse and the London Stock Exchange have approved the merger, the companies still haven’t resolved the thorny question of where to locate the stock exchange in a post-Brexit Europe. There are at least two different options.
/goo.gl/LXLkek

Exchanges, OTC and Clearing

LME introduces package of measures to strengthen metals trading
LME
Rebalancing of member fees for short-dated carries; Cap introduced for position transfers; Initial margin recalibration pending regulatory approval; Review of all incentive programmes
Since its acquisition by Hong Kong Exchanges and Clearing (HKEX) in 2012, the London Metal Exchange (LME) has been working with its members to evolve the market and strengthen its future success for the benefit of all users.
goo.gl/KHQMGO

Retail investors warn EU over LSE/DB ‘super dominance’
Philip Stafford – Financial Times
A trade body for European retail investors has warned Brussels of its concerns that the potential London Stock Exchange merger with Deutsche Börse could create a “super dominant” entity that poses a direct threat to the freedom of choice for future listed companies and entities.
/goo.gl/AwY9p2

HKEX to Offer Mini H-shares Index Options and Make Other Derivatives Market Changes
HKEx
Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce Mini-Hang Seng China Enterprises Index Options (Mini H-shares Index Options) on Monday, 5 September 2016 to meet demand from retail investors and give market participants more flexibility by providing a contract one-fifth the size of its H-shares Index Options contract. A contract summary is in Table 1 below.
goo.gl/z15T8X

UnaVista Launches MiFIR Transaction Reporting Test Environment
Nasdaq
London Stock Exchange Group announced today that UnaVista, their award winning MiFID Approved Reporting Mechanism (ARM), has made user acceptance testing (UAT) available for MiFIR transaction reporting 17 months ahead of expected go-live.
goo.gl/sl1uEk

Deutsche Börse-LSE merger faces Dutch opposition
Philip Stafford – Financial Times
The Netherlands has joined Belgium and Portugal in warning European antitrust authorities that the planned merger between Deutsche Börse and London Stock Exchange Group could damage the country’s economy and market stability.
/goo.gl/3BkH0M

BM&FBOVESPA Publishes July Market Performance
Press Release
Trading value in the equity market (BOVESPA segment) totaled BRL 142.89 billion in July, compared with BRL 143.65 billion in the previous month. Average daily trading value was BRL 6.80 billion, versus BRL 6.52 billion in June. Total volume amounted to 19,138,919 shares, compared with 19,491,168 shares in the previous month. Average daily volume was 911,377 shares (885,962 shares in June).
goo.gl/byyd1A

U.K. Considering Directly Paying Britons Affected by Fracking
Scott Hamilton – Bloomberg
Plan could see residents given share of shale gas proceeds; Options for Shale Wealth Fund to be considered this week
Britons living close to fracking wells could be paid some of the proceeds under proposals being considered by the U.K. government.
goo.gl/z8JHqV

Do Oil Companies Really Need $4 Billion Per Year of Taxpayers’ Money?
Eduardo Porter – NY Times
What would happen if the federal government ended its subsidies to companies that drill for oil and gas?
goo.gl/rfs8j6

Politics

Trump to Propose Moratorium on New Financial Regulations
Kevin Cirilli and Jennifer Jacobs – Bloomberg
Donald Trump will propose a temporary moratorium on new financial regulations in an economic speech Monday in Detroit in an effort to draw a stark contrast with the domestic policies of Hillary Clinton, who he says “punishes” the American economy. The Republican presidential nominee’s speech will focus on providing regulatory relief for small businesses, according to senior campaign aides familiar with its contents. More broadly, Trump will say he will not propose any new financial regulations until the economy shows “significant growth,” the aides said. Trump has previously said he would repeal and replace the 2010 Dodd-Frank Act.
goo.gl/ZOY6fa

Trump Gets It Wrong: Trade Is a Winner for Americans; Lower taxes on imports from trade deals save the average U.S. household about $10,000 a year.
By ROBERT B. ZOELLICK – WSJ
Donald Trump attacks the longstanding Republican promotion of trade as an engine of growth. The Republican presidential nominee asserts that trade produces winners and losers, that a country should always send more value abroad than it imports, and that America is thus a trade “loser.” Whether he wins the election or not, Mr. Trump’s protectionist views are forcing elected leaders—especially in the Republican Party—to decide whether to continue championing free trade or give up on opening markets.
goo.gl/vgjqRB

Bipartisan Stupidity: Restoring Glass-Steagall
Streetwise Professor
Both parties officially favor a restoration of Glass-Steagall, the Depression-era banking regulation that persisted until repealed under the Clinton administration in 1999. When both Parties agree on an issue, they are likely wrong, and that is the case here. The homage paid to Glass-Steagall is totem worship, not sound economic policy. The reasoning appears to be that the banking system was relatively quiescent when Glass-Steagall was in place, and a financial crisis occurred within a decade after its repeal. Ergo, we can avoid financial crises by restoring G-S. This makes as much sense as blaming the tumult of the 60s on auto companies’ elimination of tail fins.
goo.gl/XckDI0

Trump’s economic advisers are also his biggest donors; They’re also all men.
By SHANE GOLDMACHER – Politico
After spending months scolding his rivals for being beholden to their financial backers, Donald Trump unveiled an economic advisory council last week — and filled it with some of his biggest donors.
goo.gl/fhWuzx

Investing and Trading

Vix fear index at lowest level in 2 years
Financial Times
A popular gauge of expected stock market volatility and investor fear has slid to its lowest levels in two years, as a buoyant US jobs report and easy monetary policy have damped concerns over corporate earnings and the economy. Chicago Board Options Exchange’s Vix index — which measures the expected volatility of the US stock market implied by derivatives — fell to a two-year low on Friday, as global stock markets rallied in the wake of strong US job creation and the Bank of England this week restarting its bond-buying programme.
/goo.gl/hKpLhA

There’s a Big Dollar Crunch Brewing in Markets
Tracy Alloway – Bloomberg
“I need a dollar dollar, a dollar is what I need,” Aloe Blacc sang back in 2010. Japanese banks might now be humming a similar refrain as efforts to insulate big investors known as money market funds from a repeat of the 2008 financial crisis have resulted in a sharp rise in the cost of interbank lending and U.S. dollar funding.
goo.gl/tz0hfZ

Another AI startup wants to replace hedge funds; Computer will start trading three stocks, including Tesla.
BY MARK BERGEN – Recode
Dear, Wall Street: Silicon Valley is increasingly coming for you.
goo.gl/IXrwtX

FTSE 100 bosses earn average of £5.5m a year, report says
By Joe Miller – BBC
The bosses of Britain’s biggest companies now take home an average of £5.5m per year, a report has said.
goo.gl/KRZVwT

Researchers or Corporate Allies?; Think Tanks Blur the Line; Think tanks are seen as independent, but their scholars often push donors’
agendas, amplifying a culture of corporate influence in Washington.
By ERIC LIPTON and BROOKE WILLIAMS – NY Times
As Lennar Corporation, one of the nation’s largest home builders, pushed ahead with an $8 billion plan to revitalize a barren swath of San Francisco, it found a trusted voice to vouch for its work: the Brookings Institution, the most prestigious think tank in the world.
goo.gl/NmiMSY

Institutions

UBS’s Asia Head of Prime Brokerage Sales White Moves to London
Klaus Wille, Bei Hu – Bloomberg
White has moved to investor client services unit in London; She headed prime brokerage sales in Asia-Pacific for six years
Tamera White, UBS Group AG’s Asia-Pacific head of prime brokerage sales for the last six years, has moved to another role with the Swiss bank in London.
goo.gl/EvRr3t

The Seven-Year Short
Bloomberg
On any given evening, after Mark Hart and his wife have put their kids to bed, he’ll duck into his bedroom closet and close the door behind him. Then, by pixel-light, he goes to work. Hart, a hedge fund manager in Fort Worth, has a single fixation: the Chinese yuan. And at 9 p.m. Texas time, China’s financial markets are in full-throated roar 13 time zones away. Surrounded by shirts and pants—the closet is more convenient than his basement office—Hart, 44, talks to Hong Kong, parsing the latest numbers and the scuttlebutt from Beijing and Shanghai. In the seven years since this all started, he might as well have learned Mandarin.
goo.gl/E70zGj

R.B.S. Posts $1.43 Billion Loss in 2nd Quarter, as Litigation Costs Balloon
Chad Bray – NY Times
The Royal Bank of Scotland said on Friday that it posted a large loss in the second quarter on ballooning litigation costs, as it grappled with restructuring to shift away from being a lender with global ambitions. The lender, which is 73 percent owned by the British government after a bailout during the financial crisis, announced plans last year to dismantle its global investment bank. It also wants to reduce the number of countries in which it operates, to focus on retail and corporate banking in Britain and Ireland. But it has struggled to rid itself of part of its branch network, and litigation costs have risen sharply.
goo.gl/Vts8Sj

Barclays names Portney as investment bank CFO
RIsk.net
Barclays has tapped ex-JP Morgan clearing executive Emily Portney to be chief financial officer (CFO) for its corporate and international division, which includes the investment bank. She will report to the bank’s group finance director, Tushar Morzaria, who moved from JP Morgan in 2013, and to Joe Gold, deputy chief executive officer of the corporate and international division.
goo.gl/UsHwMv

European banks: Still stressed out
The Economist
Any big announcement about banks made after the markets close for the weekend is bound to bring back dark memories of the 2007-08 financial crisis. Although the results of the latest European bank stress tests, released on July 29th, contained much that was reassuring, they did not dispel investors’ doubts about the industry’s earnings prospects. And in the case of Italy, the tests seemed to exacerbate bigger worries. When the markets opened again on August 1st, they were marked by falls in banks’ share prices; the Euro Stoxx banks index dropped by 3% and almost 5% on successive days.
goo.gl/NoJsSV

Fintech

Metamako appoints Kevin Covington CEO as growth escalates
Metamako
Metamako, the leading specialist in deterministic network devices for the world’s financial institutions, announced today that it has expanded its team and appointed Kevin Covington CEO. Since the company’s launch at the end of 2013, Metamako’s presence worldwide has been increasing quickly and steadily. In 2015 it was listed in the KPMG and H2 Ventures’ top 50 Emerging Stars of global finance technology innovators.
/goo.gl/ndGEAs

Data Centers’ Water Use Has Investors on High Alert
Justin Morton – Bloomberg
Data centers, used by governments and large corporations to house their computer systems, have one big environmental problem: They get hot. To keep them from overheating, large data centers can pump hundreds of millions of gallons of water a year through the facilities, according to company reports. That high demand for water has some investors concerned, especially in places where natural water resources are becoming ever more precious, like tech-heavy California.
goo.gl/4jkfpW

FIX Trading Community Announces New Recommended Guidelines For The Use Of FIX In Multi Asset Classes For Post-Trade
Mondovisione
By publishing a standardised and detailed set of guidelines for futures, equity swaps and FX equity options, FIX is addressing these issues by providing a common workflow with minimal differences across asset classes, thereby allowing connection to one or more third parties and/or intermediaries with the same protocol. With these guidelines, market participants will be able to reduce risk and have the ability to leverage off their current FIX infrastructure in place for trading and, by doing so, minimise implementation time and costs.
jlne.ws/2aFS4Q1

GreenKey Kicks Off Design Partner Program led by Interdealer Brokers Tradition and Tullett Prebon
PR Newswire
GreenKey, creator of an award-winning digital telephony platform for global financial market participants, today announced the launch of a Design Partner Program (DPP) led by Tradition and Tullett Prebon – two of the world’s most prominent interdealer brokers – and involving tier 1 banks, trading firms and exchanges.
jlne.ws/2aFWL0j

FIX Trading Community announces new post-trade guidelines4 hours ago | 912
Finextra
FIX Trading Community, the non-profit, industry-driven standards body at the heart of global financial trading, today announced the release of new guidelines for the use of FIX in post-trade processing for multi asset classes and a common post-trade framework.
/goo.gl/j0oAgP

Regulation

Citigroup beats $800 million appeal by one-time billionaire
Jonathan Stempel – Reuters
A federal appeals court rejected a one-time Florida billionaire’s bid to revive his $800 million lawsuit accusing Citigroup Inc of fraudulently hiding its exposure to subprime and other toxic mortgages, inducing him to hold on to shares he otherwise would have sold. The 2nd U.S. Circuit Court of Appeals in Manhattan on Friday said Citigroup and former officials, including two chief executives Charles Prince and Vikram Pandit, were not liable to trusts and corporate entities overseen by Arthur Williams and his wife.
goo.gl/cRmzMX

IOSCO Seeks Public Comment On Its Analysis Of Liquidity In Corporate Bond Markets
Press Release
The Board of the International Organization of Securities Commissions (IOSCO) is seeking public comment on its consultation report entitled Examination of Liquidity of the Secondary Corporate Bond Markets, which was published today. IOSCO undertook this work in response to the concerns of some market participants about liquidity in this important sector.
goo.gl/i6SJoz

ET in the classroom: How Sebi is strengthening risk management in commexes
By Ram Sahgal – Economic Times
Market regulator Sebi, along with commodity exchanges, is beefing up the risk management apparatus in the 13-year-old commodity futures market in the wake of the castor seed and more recently chana futures suspension. There are a number of measures like staggered delivery to tighten the screws on manipulators. Another one relates to initial margin. ET provides a brief primer.
goo.gl/u73MtF

NYSEMKT: Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Amending NYSE Rule 49 Equities Regarding: (1) the Exchanges Emergency Powers; (2) the Exchanges Disaster Recovery Plans; and (3) Exchange Backup Systems and Mandatory Testing (Release No. 34-78483; File No. SR-NYSEMKT-2016-68); see also Exhibit 5 and Exhibit 4
SEC
/goo.gl/GsHKSX

Former Kleenmaid director found guilty of fraud and insolvent trading
ASIC
A former director of Kleenmaid, Bradley Wendell Young, on Friday was found guilty on 18 charges arising from the collapse of the national whitegoods distributor, following a 71 day trial.
goo.gl/TBR2lp

ASIC’s enforcement report highlights key enforcement outcomes for January-June 2016
ASIC
ASIC has today released its enforcement report for the period 1 January 2016 to 30 June 2016.
goo.gl/Rt6kEF

IOSCO seeks evidence over controversial bond study; IOSCO recently found through a study that there is no evidence of deterioration in corporate bond market liquidity.
By Hayley McDowell – The Trade
The International Organization of Securities Commissions (IOSCO) is looking for comment on its report that says liquidity in corporate bond markets has not deteriorated.
goo.gl/WoQE5D

Financial Crime Survey 2016: Non-AML compliance and online fraud top the financial crime investment charts
Risk.net
Since 2007, Operational Risk, in collaboration with BAE Systems, has conducted a series of surveys covering key industry trends in financial crime, risk and compliance. This year’s survey shows continued investment in anti-fraud and compliance solutions. However, the focus and priorities of financial institutions appear to reflect the uncertainty of global markets and the growing impact of money laundering and counter-regulatory measures.
goo.gl/rqmxtZ

Regions

U.S. Farmland Prices Fall $10 an Acre in First Drop Since 2009
Alan Bjerga – Bloomberg
U.S. farmland values in 2016 dropped for just the second time in almost three decades after grain and soybean prices extended a slump, eroding grower profit and capping a decade-long boom when land costs jumped 65%.
goo.gl/NNq9M7

Cargill to sell two European oilseed processing facilities to Bunge
Press Release
Cargill and Bunge Limited (NYSE: BG) (“Bunge”) today announced their intention to enter into an agreement under which Cargill will sell to Bunge two oilseed processing plants and businesses in the Netherlands and France.
goo.gl/B1XaAF

Why China Can’t Solve Its Debt Problem
By Christopher Balding – Bloomberg
For a long time, there was a recurring stereotype about China’s economy: If growth started to slow significantly, the argument went, prudent technocrats in Beijing could always prop it up with fiscal stimulus and keep the country’s financial institutions afloat. Combined with optimistic official data about deficits, this argument sounded reassuring for a while.
goo.gl/XQMipK

Two former Hong Kong financial heads take the side of SFC in company listing reform debate
Enoch Yiu – South China Morning Post
Two former financial heavyweights have added their voice to the turf war between Hong Kong’s two financial market regulators over public company listing reforms.
Hong Kong Securities Futures Commission founding chairman Robert Owen and former financial minister Frederick Ma both support proposed listing reforms that would boost the influence of the SFC in listing matters, while the plans are strongly opposed by others including a Hong Kong Exchanges and Clearing director.
goo.gl/BT6gkd

Amazon offices in Tokyo searched in Japanese antitrust probe
MarketWatch
Amazon Japan’s offices in Tokyo were searched by the Fair Trade Commission on suspicion of violating antitrust laws by forcing retailers to favor its e-commerce service over rival services, an official of the agency said Monday.
goo.gl/N0dm30

Nasdaq Dubai to open equities futures market
Reuters
The Nasdaq Dubai exchange will open an equity futures market next month to trade single-stock futures on the shares of some of the United Arab Emirates’ biggest companies, the bourse’s chief executive said on Monday.
The introduction of stock futures could be a major development for equity markets in the UAE, where short-selling is restricted and a lack of opportunities to hedge has been a concern of foreign investors.
goo.gl/JEY5aB

Good afternoon, Vietnam
The Economist
Foreign direct investment in Vietnam hit a record in 2015 and has surged again this year. Deals reached $11.3 billion in the first half of 2016, up by 105% from the same period last year, despite a sluggish global economy. Big free-trade agreements explain some of the appeal. But something deeper is happening. Like South Korea, Taiwan and China before it, Vietnam is piecing together the right mix of ingredients for rapid, sustained growth.
goo.gl/wLHckp

NSEL scam: Jignesh Shah granted bail
Economic Times
A special court here today granted bail to FTIL founder Jignesh Shah, arrested in the Rs 5,600 crore National Spot Exchange Limited (NSEL) scam.
goo.gl/1awOcO

Miscellaneous

International Commodities and Derivatives Association (ICDA) Announces New Board Member Appointments
Mondovisione
The International Commodities and Derivatives Association (ICDA) is pleased to announce the appointment of two new members to its Board of Directors. Dr. Stéphane Graber, Secretary General of the Swiss Trading and Shipping Association (STSA), and Dr. Paul Lynch, CEO of itarle, a leading provider of multi asset algorithmic trading and analytics services for the sell-side, have joined effective immediately.
jlne.ws/2b2KRwM

A Tale of Two Indexes
Susanne Barton – Bloomberg
The Economist has long used an index to compare the purchasing power of currencies using local prices of Big Macs. In July, Nomura introduced its own index using the iPhone 6S. They clash. In the countries shown, Big Macs cost less than in the U.S. at today’s exchange rates, which indicates their currencies are undervalued. But iPhones cost more abroad, indicating those same currencies are overvalued.
goo.gl/E76koQ

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