Breaking News

John Lothian: Whistleblowers Are Poised to Collect $100 Million; UK government bonds turn negative in historic rally; London Metal Exchange earnings drop as activity declines

First Read

MarketsWiki Education Video Update
Yesterday we started on Day 2 of our MarketsWiki Education series from Chicago, and we started off with a bang. The usually low-key Jeff Levoff, partner at DRW gave a rousing and thoughtful presentation on the company’s philosophy, the role of proprietary traders and how that is changing. As this was a version of the talk he gives on college campuses across the nation, it was, shall we say, well received.

Also, look below the video for a list of the presentations we have published thus far. We have a lot of fantastic presentations to get through before heading to Europe this fall.

Jeff Levoff, Partner, DRW – Make a Market: Proprietary Trading in the Modern Era

MarketsWikiEducation.com

“This is not a get-rich-quick scheme. It’s hard work to try to find positive expected value. That’s what we do every day.”

Conceptually, proprietary trading is easy. One must follow two simple steps – finding positive expected value and managing the risk of positions taken. The devil, as always, is in the details.

When Jeff Levoff, partner at DRW, began in the business, positive expected value was an easier proposition. A simple Black-Scholes based software suite would spit out theoretical values, and market makers like Levoff would actively bid below theoretical value, offer above it and – voila! – positive expected value. As markets have grown more complex and as participants have grown more sophisticated, today’s proprietary trader must think and act outside the box to find opportunity.

In this MarketsWiki Education presentation, Levoff demonstrates DRW’s philosophy using quotes from famous people and applying them to the financial markets. Be sure to watch until the end because, as the saying goes, it ain’t over till it’s over.

Watch the video »

***Chicago 2016 Video Releases to Date

Lisa Dunsky, OCC – Hit By A Brick: How Setbacks Shape Your Career
Kate Maehr, Greater Chicago Food Depository – Volunteerism: Good for the community and good for you!
Christian Domin, GlenStar Properties – Value Investing: Office Space and Associated Risks
Rob D’Arco, Rival Systems – Technology: the Center of the (Financial) World

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New paper by Deutsche Börse and Celent: Future of Fintech in capital markets
Eurex
The paper “Future of Fintech in capital markets” covers the areas core market infrastructure, post-trade digitization, artificial intelligence and analytics as well as investment technology digitization and alternative funding platforms. It also shows how Fintech offers new business opportunities for financial market infrastructure firms and how Deutsche Börse can raise its competencies to an even higher level.
goo.gl/HdSUL6

***** Andreas Preuss is looking smarter and smarter for his move to head of IT & operations, data & new asset classes at Deutsche Boerse. This is a very interesting area with a lot going on.

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London Metal Exchange ring trade to remain at backup site through end-August
Platts
Open-outcry ring trading on the London Metal Exchange will continue to be hosted at the LME’s back-up site, some 50 km (30 miles) northeast of London, through the end of August after structural problems were discovered last month in the building that houses the exchange, the LME said in a notice to members.
goo.gl/hwgR5V
*****The new backup to the current backup is the Starbucks across the street.

***DA: Pity. The new site is something to behold, a “new-old” marvel, complete with what has been called (by me) the last open outcry structure ever to be built. It is in the heart of the City, but sandwiched between two green spaces – Finsbury Square on one side and the Honourable Artillery Company grounds on the other. Read yesterday’s column and see why the LME is looking like a 139-year-old startup.

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Yes, Precious: World Gold Council, LME and Banks to Launch New Gold, Silver Contracts
Doug Ashburn, JLN
Sometimes the best ideas are worth waiting 139 years for.
On August 9, 2016, the World Gold Council and the London Metal Exchange, together with a consortium of banks, announced a planned launch of LMEprecious, a new platform for spot, daily and monthly futures, options and calendar spread contracts for gold and silver, with platinum and palladium planned for down the road.
This will mark the second attempt at a gold futures contract at the 139-year-old LME.
jlne.ws/2bfug8l

***DA: In case you missed it, here is our take on yesterday’s top story.

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FINRA Offers Tips for Retail Investors on Order Types
FINRA.org
While most Americans understand the importance of saving and investing, many do not possess the basic financial knowledge needed to make sound financial decisions, according to a recent study released by the FINRA Investor Education Foundation (FINRA Foundation). A series of financial literacy questions in the FINRA Foundation’s 2016 National Financial Capability Study revealed that more than half of all Americans surveyed, 54 percent, could not tell which was riskier—investing in a single stock or investing in a mutual fund.
jlne.ws/2bd3EpI

***** Well, I am not really surprised given the state of the world.

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How I learned to stop blockchain obsessing and love the Barry Manilow
Izabella Kaminska – FT
Financial hype cycles are predictable mostly because they mimic fashion fads and music fads. For example, there was a time in this reporter’s life when she aspired to be cutting edge and cool. Joyfully, no longer.
goo.gl/wObHH9

**** I spent a Weekend in New England with a girl named Mandy, and Even Now, It Could Be Magic. Somewhere Down the Road, I will be Willing to Take a Chance Again If I Made It Through the Rain. It’s a Miracle!

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Tuesday’s Top Three
Whatever you want to say about the man, Donald Trump certainly has a way of staying in the news, and once again he makes our top three list with the Bloomberg story, Trump Has a Posture, Not a Plan, on Economics. The second spot was a great talk given by Jeff Levoff at our recent MarketsWiki Education event, Jeff Levoff, Partner, DRW – Make a Market: Proprietary Trading in the Modern Era. Last is a regulation press release, CFTC Announces Enhancements to Protect Customer Funds. Not exactly riveting reading, but it is important.

Lead Stories

Whistleblowers Are Poised to Collect $100 Million; Madoff tipster Markopolos is in position to get cut of awards tied to State Street, Bank of New York Mellon cases
By Justin Baer, Gregory Zuckerman and Aruna Viswanatha, WSJ
After his warnings about Bernard Madoff’s Ponzi scheme went ignored for years, Harry Markopolos urged US regulators to encourage tipsters. Now, the forensic accountant and a team he put together are in position to benefit from those new incentives.
goo.gl/9JBgNT

UK government bonds turn negative in historic rally; Gilt prices surge on Bank of England pledge over asset purchases
by: Adam Samson and Michael Hunter – FT
UK government bond yields entered negative territory on Wednesday, extending a historic rally after the Bank of England stressed its commitment to buy up gilts in a bid to stimulate the economy.
/goo.gl/Ky3Yor

London Metal Exchange earnings drop as activity declines
by: Neil Hume – FT
Earnings at the London Metal Exchange, the world centre for metals trading, dropped by almost a fifth in the first half of the year because of a decline in activity as well as rising costs.
/goo.gl/jAJbJ8

Profit at Hong Kong Exchanges drops 27% in 1H
by: Peter Wells – FT
It hasn’t been the best of halves for Hong Kong Exchanges and Clearing, as the operator of the territory’s market chalked up hefty double-digit declines in revenue and profit in the first six months of the year.
/goo.gl/UMkhl6

Jefferies, Free of the Restraints of Bigger Banks, Is Emboldened
By RANDALL SMITH – NY Times
Under the leadership of Richard Handler, Jefferies had the best stock performance of any investment bank through 2012. Credit Peter Foley/Bloomberg
When the activist investor Carl C. Icahn bought 15 percent of the organic and natural products maker Hain Celestial in 2010, the company’s chief turned for advice to Mr. Icahn’s own Wall Street banker, Richard Handler, the chief executive of the investment bank Jefferies.
goo.gl/1og7QX

The New Wall Street: Even Big Banks Want Help Navigating Markets
Bloomberg
After JPMorgan Chase & Co.’s shares plunged 21 percent in the opening minutes of trading on Aug. 24 last year, the world’s largest investment bank sought out an unlikely ally, Virtu Financial Inc., to help it understand what happened.
goo.gl/4l9Kcl

What Happened on Wall St. Ahead of the Crisis? We May Yet Find Out
William D. Cohan – NY Times
The eighth anniversary of the 2008 financial crisis is almost upon us, making this as good a moment as any to take stock of how little we know still about the bad behavior and deception that occurred inside the big Wall Street banks that helped to cause it — and how little we may ever know.
jlne.ws/2bcnRbS

Nick Goodway: Politicians need to protect London as exchange deal hangs in balance
Nick Goodway – Evening Standard
You might be forgiven for thinking that Deutsche Börse’s takeover of — sorry, merger with — the London Stock Exchange is all over bar the shouting. Shareholders in both organisations have voted the deal through (after a subtle lowering of the bar by our German friends). And Xavier Rolet, the French chief executive of the LSE, said last week that he expects it to complete in the first or second quarter of next year.
goo.gl/9Z8ycE

Female CEOs, Still a Rarity, Face Extra Pressures
Rachel Feintzeig and Joann S. Lublin – WSJ
Top female executives wonder what’s next for Marissa Mayer—and for the rest of their slim ranks. The Yahoo Inc. CEO is wrapping up one chapter of her career, as the internet company works to sell its core assets to Verizon Communications Inc. For many women leaders, she embodies the particular challenge of being female and in charge. Some say Ms. Mayer and other female CEOs frequently face extra scrutiny for their management decisions, strategy plans and personal lives. Others are concerned that they have little margin for error, which can make risk-taking perilous and winning crucial.
jlne.ws/2bd5gzL

BOE Can’t Part Investors From Long Bonds as QE Hits Snag
Anooja Debnath, Marianna Duarte De Aragao – Bloomberg
Second operation of expanded buying fails to reach target; Longer bonds ‘a really difficult area’: Aberdeen’s Hickmore
The Bank of England’s expanded quantitative-easing program ran into a stumbling block on just its second day as investors proved unwilling to part with their holdings of longer-dated bonds.
goo.gl/xD6iLQ

Memo to Carney: The U.K. Already Has Negative Rates
By Mark Gilbert – Bloomberg
Negative interest rates, according to Bank of England Governor Mark Carney, are “a bit wrong.” As is often the case these days, though, financial markets rather than central banks are dictating the cost of money, and the U.K. is already seeing some key borrowing costs drop below zero, a move that Carney says has produced “negative consequences” elsewhere.
goo.gl/fRfqGK

Big Banks Team Up to Fight Cyber Crime; Eight of the largest U.S. banks, including J.P. Morgan, Bank of America and Goldman Sachs, are forming a group that seeks to tackle the growing threat
By Robin Sidel, WSJ
Big banks are revving up efforts to combat cybercriminals targeting the financial-services industry.
goo.gl/53wf7h

One Sign That U.S. Productivity Growth Is Poised to Shoot Higher
Luke Kawa – Bloomberg
On a quiet summer morning in markets, one data point testified to the U.S. economy’s most enduring problem, while another gave reason to expect an improvement in this area in the years to come.
jlne.ws/2bcn3U9

Exchanges, OTC and Clearing

ELITE CONNECT AND OPENEXCHANGE PARTNER TO BOOST VIDEO CONFERENCING ACROSS EUROPE AND US
London Stock Exchange Group
Agreement allows ELITE Connect and OpenExchange users to interact using compatible online meeting technology; Geographical strength of each platform extends breadth of virtual meeting opportunities for users across Europe and US; ELITE Connect is LSEG’s online connection platform for public companies, intermediaries and institutional investors; Open Exchange is a leading US-based video conferencing solution for financial service professionals
London Stock Exchange Group (LSEG) today announces ELITE Connect, its online connection platform for a wide range of market participants including public companies, investor relations professionals, institutional investors and brokers, is partnering with OpenExchange, the US based secure video service for corporate executives, investor relations officers, analysts and portfolio managers
goo.gl/W5I18f

Presentation by HKEX Chief Executive Charles Li and Group Chief Financial Officer Paul Kennedy on 2016 Interim Results Announcement
HKEx
goo.gl/MEHaem

The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one
Josh Horwitz – Quartz
Bitcoin suffered yet another blow last week when Bitfinex, one of the cryptocurrency’s largest exchanges, suffered a hack that cost its users about $65 million. Every one of its investors saw their funds suddenly drop by 36%, as the company decided to “socialize” the losses. The source of the security breach remains unconfirmed, as Bitfinex continues to work with “authorities” (it’s not clear which ones) to pinpoint what happened. But the details of the hack aren’t its only mystery. Burnt traders are now struggling to figure out something even more basic—who exactly is behind Bitfinex and where are those people located?
jlne.ws/2bcgBg1

Daiwa Securities Becomes Newest CLS Settlement Member
Dan DeFrancesco – WatersTechnology
CLS Group, a provider of risk management and operational services for the foreign exchange (FX) market, has added Daiwa Securities as a settlement member. The Japanese firm has roughly $478 billion in assets under custody and will join 65 other financial firms that are direct participants in CLS’s settlement and risk mitigation system. The system settles approximately $5 trillion a day on behalf of clients in payments relating to FX trades across 18 currencies.
jlne.ws/2bd2qe0

SIX Swiss Exchange July 2016 Statistical Monthly Report
Press Release
July 2016 saw a total of 3’491’374 trades with a turnover of CHF 91.1 billion. This corresponds to a decline of 20.1%versus the previous month which recorded a significant increase in trading activity following the Brexit referendum.
jlne.ws/2bd35Mq

NCDEX board panel on more farmer participation
Business Standard News
The National Commodity and Derivatives Exchange Ltd (NCDEX) has formed a panel of four board members to advise on its ambitious plan to connect 50,000 farmers to reliable markets, which is the next step towards unlocking income opportunities for smallholder farmers, the exchange said in an announcement.
jlne.ws/2bcnIFa

BRIEF-ICE expands Daily Trading Limit for Cotton No. 2 futures
Reuters
ICE Futures U.S.- Daily trading limit for all Cotton No. 2 futures delivery months will expand to 4 cents per pound (400 points) above and below prior day Settlement Price
jlne.ws/2bcGhJG

Saudi Arabia Said to Report Record Oil Output on Summer Demand
Wael Mahdi – Bloomberg
Production said to be 10.67 million barrels a day in July; Figures were submitted to OPEC, according to two people
Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day in July to meet a summer surge in domestic demand, an increase that will do nothing to endear OPEC’s leading exporter to other members seeking output limits to shore up prices.
goo.gl/kkBXhE

Quanto Futures on EURO STOXX 50® Index – Currency risk matters
Eurex
The market volatility following the U.K. referendum brought yet again into the foreground the importance of FX risk. Investors who don’t hedge FX exposure can suffer heavily. Eurex offers Quanto Futures on the EURO STOXX 50® Index in USD. This product is designed for investors seeking to participate in the performance of the index without being subject to currency fluctuations between euro and U.S. dollar.
goo.gl/cY5Lim

Shenzhen Stock Exchange Market Bulletin 8 August , 2016, Issue 27
Mondovisione
CSRC said on August 5 that it was speeding up the development of revised regulations on the major asset restructuring of listed companies, which will curb speculative backdoor listings. According to the previous draft for public comments, the revised regulations set out five main indexes to judge whether an acquisition is in fact a major asset restructuring instead of only looking at whether the assets of the unlisted acquiring company were greater than those of the listed one. CSRC said that the commission was studying suggestions from the public and will promulgate the regulations later.
goo.gl/jBMY9r

SGX Welcomes ZICO Capital as Accredited Issue Manager and Catalist Full Sponsor
SGX
Singapore Exchange (SGX) is pleased to welcome ZICO Capital as an accredited Issue Manager for Mainboard listings and a Full Sponsor on Catalist, SGX’s sponsor-supervised board.
goo.gl/I2EcBn

The TSX Isn’t A Measure Of The Canadian Economy – The Two Don’t Move In Tandem
Tim Worstall – Forbes
An interesting question is asked. If the Toronto Stock Exchange is the major one in Canada, the TSX Index is the measure of how well that market is doing, then how can it be possible that the Canadian economy and the index can move in different directions? The answer to that comes on two levels. The first is that there are, as there always are, certain specific events which are driving the market rather than the economy as a whole. But the much more important one is that the index simply isn’t a measure of how the Canadian economy is doing. This is a result of certain specifics about that Canadian economy and also to do with the general process of globalisation.
goo.gl/lC3T6s

Millennium Exchange Release 9.1 Oslo Børs – New Timeline
Mondonvisione
In connection with the announced implementation of Millennium Exchange Release 9.1, London Stock Exchange and Oslo Børs have together reviewed the present implementation plan. Based on the analysis made, the conclusion is that there is a need to change to the original schedule.
goo.gl/Gj6TWr

Politics

Trump’s Ambiguous Wink Wink to ‘Second Amendment People’
Thomas L. Friedman – NY Times
And that, ladies and gentlemen, is how Israeli Prime Minister Yitzhak Rabin got assassinated.
goo.gl/kYHFe2

House Speaker Ryan Defeats Political Unknown in Primary
Billy House – Bloomberg
Wisconsin Republican wins amid anti-establishment climate; Trump backed Ryan after pressure from Republican leaders
House Speaker Paul Ryan coasted to victory in a Republican congressional primary against a political unknown just days after getting a belated endorsement from the party’s presidential nominee, Donald Trump.
goo.gl/ambwjJ

Trump Resurrects Worries on His Character and Nation’s Violent Past; It’s another worrisome example for voters concerned about the Republican presidential nominee’s temperament.
Sahil Kapur- Bloomberg
Donald Trump’s latest controversial comments did more than make it harder for him to win over undecided voters concerned about his temperament—it resurrected an ugly history of U.S. violence at the presidential level.
goo.gl/iUrSnu

Investing and Trading

Hedge Funds All In on VIX Plunge as S&P 500 Hovers Near Record
Joseph Ciolli – Bloomberg
Large speculators most bearish since 2013 on ‘fear gauge’; S&P 500 hit fresh all-time high intraday before trimming gains
Professional speculators are making record bets in volatility markets that U.S. stocks will keep rallying.
goo.gl/fZ6VsX

New Money-Fund Rules Test Need for Liquidity Versus Yield
Richard Teitelbaum and Vipal Monga – WSJ
Money-market managers find themselves at the mercy of corporate finance chiefs, who stand to pull hundreds of billions of dollars in cash out of funds within the next 10 weeks, disrupting short-term lending markets. The threat, spurred by regulations set to take effect Oct. 14, is rippling through the bank lending market and unsettling the $2.7 trillion money-market industry, according to fund managers.
jlne.ws/2bd2eeA

Government Statistics May Be Wrong, But They’re Not Manipulated
By Justin Fox – Bloomberg
I can think of lots of reasons to question or criticize the unemployment rate, gross domestic product and other economic numbers that the U.S. government puts out. Manipulation by politicians looking to win elections is not one of them.
goo.gl/MUnp22

BlackRock Targeted by Gay Activists for Investing in Firearms
Jeff Green – Bloomberg
Group wants asset manager to divest stakes in gunmakers; Firearms are cited in a majority of LGBT murders in the U.S.
Gays Against Guns, a group formed days after the June massacre at a gay nightclub in Orlando, will target BlackRock Inc. to kick off a campaign pressuring companies to cut ties with the firearms industry.
goo.gl/1j8QeU

Institutions

We moved the needle forward a bit everyday, says RBI Guv
Business Standard News
Outgoing Reserve Bank of India (RBI) Governor Raghuram Rajan probably intended to keep the post-policy discussions focused on the day’s main event but media representatives had their own ideas and nobody was willing to leave this last chance to get some bits from him about his unexpected departure from the central bank. The usually freewheeling Rajan, however, kept the pitch subdued by chastising the media for dragging family members into the public domain. The RBI governor was upset that a reporter contacted his parents after Rajan’s resignation in mid-June.
jlne.ws/2bd3RJi

Competition watchdog’s high-street banking probe disappoints; Measures criticised for not going far enough to shake up sector and help the poorest
by: Emma Dunkley – FT
Critics of the UK’s competition watchdog lambasted it for “missing a golden opportunity” with its two-year investigation into high-street banking and its recommendations to shake up the sector.
/goo.gl/jKSw2N

ITG drives electronic trading in Latin America
The Trade
ITG has announced the launch of Close algorithms in Mexico and Brazil as it pushes its electronic trading services into Latin America. The Close algos will incorporate order imbalance information and adapt to changing intra-day market conditions, ITG said.
jlne.ws/2bd3EG5

After resuming QE, Bank of England fails for first time to meet bond-purchase target
Ana Nicolaci da Costa – Reuters
The Bank of England fell 52 million pounds ($68 million) short of its target to buy more than a billion pounds of long-dated government debt on Tuesday, an early slip-up for one of its latest measures to stimulate Britain’s economy. For the first time since it started buying government bonds to boost Britain’s economy in 2009, the central bank failed to find enough willing sellers to meet its purchase target, pushing bond yields to record lows.
jlne.ws/2bdaFqc

Cryonics coming to a sovereign debt restructuring near you soon?
Robin Wigglesworth – Financial Times
The decade-long legal war between Argentina and a bunch of US hedge funds led by Elliott Management ended in a lucrative victory for the latter earlier this year. But the potential implications continue to reverberate. Some observers – including Joe Stiglitz, the International Monetary Fund, the Vatican and the United Nations – fret that Elliott’s triumph will upset the delicate balance of sovereign debt restructuring. Here’s what the Nobel laureate told the FT earlier this year.
jlne.ws/2bcyGuF

Nomura ‘Lost Control’ in Firing Salesman Over $40 Million Loss
Donal Griffin – Bloomberg
Bond salesman’s firing ruled unfair, but compensation limited; Nomura disciplinary process had ‘multiple defects’: judge
Giovanni Lombardo, a bond salesman for Nomura Holdings Inc. in London, was starting to worry about Alberto Statti.
goo.gl/JuIQme

Philippine bank says it preserves ties with big U.S. banks despite heist role
BY KRISHNA N. DAS AND KAREN LEMA – Reuters
Rizal Commercial Banking Corp (RCBC) officials say they have preserved ties with major U.S. banks despite the use of one of its branches in Manila by cyber criminals to funnel $81 million stolen from the Bangladesh central bank’s account at the Federal Reserve Bank of New York.
goo.gl/vpgsL4

Fintech

Chinese Tech Firms Forced to Choose Market: Home or Everywhere Else
Paul Mozur – NY Times
For teenagers who like to sing along with Ariana Grande and Flo Rida, Musical.ly is a must-have. The app that lets users lip sync and dance in their own music videos boasts 100 million users and partners with pop stars like Ms. Grande and Meghan Trainor. It’s not easy to tell Musical.ly is Chinese — and that’s deliberate. To find success in America, its parent company has ignored China, its home market and a country with 700 million internet users.
jlne.ws/2bcGSL8

The Greatest Tech Businesses Aren’t Really Tech
By Leonid Bershidsky – Bloomberg
Technology companies are a lot like contemporary art: Their valuations reflect narratives more than anything else, and it’s just as important to devise the right framework to describe a phenomenon as it is to build a beautiful product. Two New York consultants, Alex Moazed and Nicholas Johnson, have suggested an interesting way of looking at most of Silicon Valley’s biggest tech-company successes: They are all platforms.
goo.gl/WRoGao

Regulation

Mobster or Central Banker? Spanish Cops Allege This Russian Both
Esteban Duarte, Henry Meyer and Evgenia Pismennaya – Bloomberg
Torshin called ‘boss’ by alleged mafia members, police say
‘I’m a public individual and I’m not hiding anywhere’: Torshin
A former senator in Vladimir Putin’s United Russia party directed dirty-money flows for mobsters in Moscow before he was named a deputy head of the central bank last year, according to investigators in Spain.
jlne.ws/2bd2J8v

Aluminum price-fixing claims rejected by U.S. appeals court
Reuters
A federal appeals court on Tuesday upheld the dismissal of nationwide antitrust litigation accusing banks and commodity companies of conspiring to drive up aluminum prices by reducing supply.
jlne.ws/2bd3wGu

CFTC Charges California Residents Frank J. Collins And Gerard Suite And Their Company, STA Opus NR LLC, With Fraud, Misappropriation, And Failing To Register With The CFTC
Press Release
The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court, Central District of California, charging Defendants Frank J. Collins of Garden Grove, California, and Gerard Suite of Irvine California (who is known by numerous aliases, including Rawle Gerard Suite, Jerry Suite, and Jerry Snead), and their Delaware limited liability company, STA Opus NR LLC (STA Opus), with fraudulently soliciting at least $1.6 million from at least 30 customers to operate a commodity pool and misappropriating approximately $1.25 million of customers’ funds for their own benefit.
jlne.ws/2bd62MT

Sebi miffed with new KYC system
Business Standard News
The Securities and Exchange Board of India (Sebi) is miffed with the new central Know Your Customer (KYC) process implemented for the entire financial system. And, has written to the finance ministry to rethink the move, said three sources. According to Sebi, the new system is not in sync with the securities market KYC. And, has disrupted the common KYC process implemented through KYC Registration Agencies (KRAs). “Sebi is supportive of the idea behind the new system but feels the implementation hasn’t been proper.
jlne.ws/2bd20V0

CFTC Proposes to Amend the Timing for Filing Chief Compliance Officer Annual Reports by Certain Registrants
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) announced today that it will publish in the Federal Register proposed amendments to CFTC regulation 3.3. The proposed amendments would provide futures commission merchants, swap dealers, and major swap participants additional time to file chief compliance officer annual reports and clarify the timing of the filing requirements applicable to swap dealers and major swap participants located in jurisdictions for which the CFTC has granted a comparability determination with respect to the contents of the reports. If adopted, the proposed rule would effectively codify and supersede CFTC Staff Letter No. 15-15 issued March 27, 2015.
jlne.ws/2bcxFmk

CMA: swipe right to disrupt banks; Regulator seeks more digital products to increase competition
by: Jonathan Guthrie – FT
The dating app Tinder allows users to decide whether they fancy one another based on a photo and a short biog. In future, customers may be able to decide whether they fancy disrupting the business models of big banks as easily.
/goo.gl/E0BLts

Regions

Renminbi shock a distant memory for currency markets; Old maxim ‘don’t fight the Fed’ joined by ‘don’t push the PBoC’
by: Jennifer Hughes in Hong Kong and Yuan Yang in Beijing – FT
This time last year, the biggest early-day news about the renminbi appeared to be an announcement of a new, improved Rmb100 note to fight counterfeiting. It was until China’s central bank fixed the currency 1.9 per cent weaker than it had the previous day.
/goo.gl/qozD4T

Lawmaker warns of ‘broken rice bowls’ if HKEX, SFC turf war continues
South China Morning Post
Stockbrokers fear the ongoing turf war between the two regulators in Hong Kong may result in broken rice bowls as a result of fewer stock market listings in the city, after the exchange reported a sharp fall 38 per cent in its profit on Wednesday.
goo.gl/m0djkN

Poland scarred despite rethink on forex loans; Investors relieved by Swiss franc climbdown but concerns about political environment persist
by: Neil Buckley – FT
For much of this year, the question of how Poland will help more than half a million citizens struggling to repay mortgages taken out in Swiss francs has hung over the investment climate. In the end, the Law and Justice government came through what investors had seen as something of a test case rather positively.
/goo.gl/qxNTQ8

Investor interest must come first in battle between regulators; The turf war between the Securities and Futures Commission and Hong Exchanges and Clearing must be settled to the benefit of market players
SCMP
Less than halfway through a three-month consultation, joint proposals by the two market regulators to reform public company listings have sparked a turf war in which interested parties have stirred the pot. The latest to do so include Robert Owen, founding chairman of the Securities and Futures Commission, and former commerce minister Frederick Ma Si-hang, now chairman of the MTR Corporation, who favour boosting the influence of the SFC to enhance investor protection.
goo.gl/x7ungT

Hedge Funds in Singapore Beating Hong Kong Counterparts: Chart
Bloomberg
Hedge funds in Singapore have posted better returns than their Hong Kong counterparts this year, breaking a multi-year trend, according to research by data provider Preqin.
goo.gl/2drBhL

Will the O&G market’s increasing turbulence capsize Singapore banks’ credit profiles?
Singapore Business Review
Loss-absorption buffers have never been more vital.
Despite the shake-up that came on the heels of Swiber’s liquidation-turned-judicial-management fiasco, Singapore banks’ credit profiles are expected to stay resilient.
goo.gl/OxgkL7

Emerging Markets Advance as Fed Optimism Sparks Dollar Weakness
Bloomberg
Emerging-market currencies and bonds rallied as traders pushed back forecasts for when the Federal Reserve will increase U.S. interest rates, bolstering demand for higher-yielding assets.
goo.gl/U2aTUS

What’s New (And Not New) In Frontier Markets
Barron’s
Frontier markets were once characterized by high exposure to the Middle East (as well as the financial sector), low liquidity and high trading costs, and while the group still suffers from some of these issues, it’s worth understanding how it’s changed, writes Credit Suisse’s Mark Buchanan.
goo.gl/GbgK5J

Miscellaneous

CFA Institute fails to cut number of exam no-shows
By Lucy Burton- Financial News
A fifth of people due to take the notoriously challenging Chartered Financial Analyst exams failed to show up on the day of the tests – an all-too-familiar statistic for the CFA Institute, which has been working to bring the number down.
goo.gl/6BJzss

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About Author

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