Breaking News

CFTC Leaves Shaping Position Limits Rule to Trump Administration; US plan to curb commodity speculators in doubt; Rapid rise of the ETFs sparks growing pains

First Read

Challenging the Status Quo: Cinnober Aims To Break Into The Back Office Clearing Space
By Jim Kharouf – JLN

There was a time when many thought there wasn’t really much of a market for full clearinghouse solutions with real time clearing and risk management. But in 2007 and 2008, Cinnober successfully pushed into the space and carved out a nice niche for itself, especially as the global financial crisis illustrated the intense need for such solutions.

Now, the company is pushing into the established space of back office clearing for clearing member banks and brokers. That space is essentially a duopoly owned by FIS, (formerly Sungard, formerly GMI and now called Stream) and ION, (formerly Rolfe & Nolan). And many firms run their own in-house back office systems. Last month, Cinnober announced plans to create a separate subsidiary that will offer new post-trade technology, or client clearing.

For the rest of Jim Kharouf’s commentary, go here

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Trump’s Threat to the Constitution
By EVAN McMULLIN – NY Times
On July 7, the presumptive Republican presidential nominee, Donald J. Trump, met privately with House Republicans near the Capitol. I was present as chief policy director of the House Republican Conference. Mr. Trump’s purpose was to persuade the representatives to unite around him, a pitch he delivered in a subdued version of his stream-of-consciousness style. A congresswoman asked him about his plans to protect Article I of the Constitution, which assigns all federal lawmaking power to Congress.
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**** Evan McMullin is a former CIA officer and a conservative independent presidential candidate in 2016. He makes a powerful statement.

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SGX Titan

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DGCX Celebrates 11th Anniversary with Record Volumes
DGCX
Dubai Gold & Commodities Exchange (DGCX) celebrated its 11th anniversary on November 21st, delivering a stellar year-to-date growth of 38%, trading over 18.3 million contracts. Strong Open Interest and growth across its asset classes contributed to this month’s success with monthly overall Open Interest aggregating at 546,999 contracts valued at US$ 8.33 billion. The Exchange also recorded a substantial growth of 48% in November 2016 from last year.
/goo.gl/3jfbTx

***** DGCX is just one celebration after another.

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40 Under 40 2016
Crain’s Chicago Business
When it comes to trading technology, Emily Kasparov operates at the nexus of change. As part of a three-lawyer team at the Chicago Stock Exchange, she’s playing legal backstop on a host of innovations that could help carve out a digital future for the company, whether that’s with mini stock auctions, a new time-delay tool to slow high-speed traders on the exchange or an unprecedented pending sale of the company to a Chinese buyer.
jlne.ws/2gVxGfY

***** Under 40 was another century for me.

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40 Under 40 2016 – Crain’s Chicago Business
Jared Vegosen built his Chicago trading business one square foot at a time, expanding his traders into more office space until he occupied the entire floor of a Loop office building. Then he took half of another floor, and now he’s part owner of that DV Trading headquarters building.
jlne.ws/2gVCHVU

***** I really get tired of having to scroll so far when I have to input my year of birth into a website with a multiple choices.

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Introducing Hanweck’s New Brand Identity and Website
Hanweck
Hanweck Associates is introducing a new streamlined brand identity. Going forward, we will simply be called Hanweck. Our company and our brand stand for our core attributes of technology, innovation, agility and stability. We are eager to demonstrate these characteristics in all that we do – from the delivery of our signature Volera Risk Analytics product to the launch of our new website at www.hanweck.com. Our goal is to better communicate the scope of our product capabilities and our unique value proposition, and we encourage you to visit our site frequently for new content.
www.hanweck.com

***** Simple, elegant and direct. You have to like this rebranding.

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Top Three
The top three most read stories yesterday were interesting to us in how widely read all three were. The Financial Times story, Derivatives luminary Donald Wilson at centre of courtroom battle, is a contender for the most clicked on story all year at JLN. In second, the Reuters article, Deutsche Bank cuts ties with 3,400 clients in trading business, had enough views to be number one most any other day. Last but by no means least the OCC story, OCC Names New CFO, Treasurer, and Chief Compliance Officer rounded out the top three.

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Lead Stories

CFTC Leaves Shaping Position Limits Rule to Trump Administration
Andrew Ackerman – WSJ
U.S. regulators failed to put the finishing touches on a much-debated, long-delayed rule to limit speculation in commodities like oil and gold, opting instead to propose a scaled-back version and leave its outcome in the hands of the Trump administration.
/goo.gl/uRMEbU

US plan to curb commodity speculators in doubt
by: Gregory Meyer – FT
The future of a plan to curb speculators in commodity markets was thrown into doubt after a US regulator delayed any vote until after Donald Trump takes office.
/goo.gl/ffjR6v

Rapid rise of the ETFs sparks growing pains; Can market sell instant gratification when underlying securities are harder to trade?
by: Nicole Bullock and Dan McCrum – FT
One of the reasons exchange traded funds have become a $3.2tn part of the world’s financial system is convenience. Investors can cheaply buy or sell exposure to almost any industry or market at the click of a button.
/goo.gl/nXz8Cz

A Cheat Sheet on the Deglobalization of the Financial World; From banking credit, bond-market flows to emerging-market capital trends, we present a bevy of charts to sketch the landscape for financial globalization.
by Sid Verma – Bloomberg
Homeward bound? From Brexit and rising polarization in Europe to the protectionist rhetoric of President-elect Donald Trump, this year’s played host to a series of political ruptures that threaten a breakdown in the existing internationalist order.
/goo.gl/FPkrZi

Exchange traded funds: taking over the markets; The products have transformed US bourses, but some worry that ETFs are breeding systemic risks
by: John Authers and Chris Newlands – FT
Stock markets have a new purpose. Once devoted to trading stocks and setting their prices, they are now the venue for buying and selling something other than shares: exchange traded funds.
/goo.gl/GZeYKA

Credit Suisse Fined by Finra Over Money-Laundering Controls
by Gregory Mott – Bloomberg
Company will pay $16.5 million and undertake remedial efforts; Finra says bank relied on brokers to report suspicious trades
Credit Suisse Group AG will pay $16.5 million to settle Financial Industry Regulatory Authority claims that a U.S. unit violated rules meant to guard against money laundering.
/goo.gl/cHDggJ

Rogue Chinese renminbi exchange rate raises eyebrows; Apparently erroneous quote on Google would have represented an 8% devaluation
by: Lucy Hornby in Beijing and Peter Wells in Hong Kong – FT
Anyone checking the exchange rate between China’s renminbi and the US dollar would have got a shock early on Tuesday when an apparent glitch resulted in quotes shown on Google and at least two other currency exchange websites showing an 8 per cent devaluation.
/goo.gl/V2X4XC

UK watchdog clamps down on spread betting companies; FCA proposes better risk warnings and limits to leverage offered by brokers
by: Hannah Murphy, Philip Stafford and Chloe Cornish – FT
The Financial Conduct Authority has proposed a clampdown on trading in contracts for difference (CFDs), spread betting instruments popular with retail traders, triggering a steep sell-off in the sector’s shares.
/goo.gl/LSlvDz

HKEx’s Li: Shenzhen Is the Future
Bloomberg Video
Charles Li, chief executive officer and executive director of the Hong Kong Exchange, discusses the opening of the Hong Kong-Shenzhen stock connect, international investor appetite and the next steps for the connect. He speaks to Bloomberg’s Stephen Engle on “Bloomberg Markets.”
/goo.gl/I3ib7e

ICAP To Hold 24th Annual Global Charity Day On Wednesday, 7 December 2016
Mondovisione
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces that its 24th annual global Charity Day will be held on Wednesday, 7 December 2016. On this day, 100% of ICAP’s revenues and commissions generated will be donated to more than 200 charities worldwide.
/goo.gl/V820nv

Morgan Stanley’s commodities head swaps swagger for small and smart
Olivia Oran – Reuters
Nancy King, global head of commodities trading at Morgan Stanley, has spent the last few years remodeling what used to be one of the most profitable units on Wall Street, by downsizing and focusing on smaller, smart trades for customers instead of the big, risky bets it used to make on its own account. The shift in strategy, which has cut the size of Morgan Stanley’s commodities business by roughly two thirds, was largely forced on the bank by post-financial crisis regulations that banned banks from using their own money on potentially risky speculation, and increased capital requirements.
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The World’s New Fear Gauge Is Ringing Alarm Bells in the Era of Trump
Sid Verma – Bloomberg
Once upon a time, the cost to hedge currency risk in global trade and finance was relatively cheap. How things change. In the pre-crisis heyday, when the cost to procure dollars staged an uptick — implied interest rates in the currency market exceeding corresponding rates in the cash markets by a notable margin — banks would subsequently arbitrage away the difference, and move the gap close to zero.
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Hedge-Fund Firm Moore Capital Cuts Management Fee on Largest Fund; Macro Managers fund at billionaire Louis Bacon’s firm has faced ‘disappointing negative return year-to-date’
By LAURENCE FLETCHER – WSJ
Moore Capital Management, the hedge-fund firm run by billionaire Louis Bacon, has cut charges for investors in its biggest fund.
/goo.gl/C3ZayJ

It Will Not Be Long Before The New Agricultural Commodity Trades On The Futures Market
Seeking Alpha
Futures Exchanges are always looking for new products to offer market participants. The last uber-successful product introduced to the market was the natural gas futures contract that commenced trading in 1990. During the first quarter of trading, in April through June 1990, NYMEX natural gas futures traded a total of 21,396 contracts. During the same quarter in 2016, the natural gas futures traded over 24.3 million contracts.
/goo.gl/S3N7yw

What Analysts Say to Buy as Shenzhen-Hong Kong Link Opens
by Kana Nishizawa and Jeanny Yu – Bloomberg
Scarcity value, new economy, small-caps among themes in focus; Link adds more than 800 stocks in Shenzhen, 100 in Hong Kong
After months of anticipation, the opening day of Shenzhen’s exchange link with Hong Kong has finally arrived.
/goo.gl/6utN9S

Brexit

No special Brexit deal for the City of London, warn Hammond and Davis
Tim Wallace, Ben Martin and Cara McGoogan – The Telegraph
The City of London will not get any special treatment in the upcoming Brexit negotiations, senior members of Theresa May’s Cabinet have told a group of high-profile banking and insurance chiefs. The Daily Telegraph understands that Philip Hammond, the Chancellor, and David Davis, the Brexit Secretary, told a group of City leaders that, despite accounting for 11.8pc of gross domestic product (GDP), financial and professional services is only one industry and cannot be seen to be treated differently.
/goo.gl/sZmVY3

EU Brexit Negotiator: U.K. Has Less Than Two Years to Negotiate Brexit Deal
by Nikos Chrysoloras , Ian Wishart , and Jonathan Stearns – Bloomberg
Barnier says ‘keep calm and negotiate’ as maps plan for talks; EU officials want May to agree post-Brexit pact before bridge
The European Union signaled Prime Minister Theresa May must first strike a deal for the U.K.’s post-Brexit trade ties with the bloc or lose out on a transitional phase that banks and businesses want.
/goo.gl/zSUImo

Brexit Notice Called Irrevocable as Judges Spar With Lawyer
by Kit Chellel – Bloomberg
Government lawyers continue on Day Two of Brexit challenge; The Supreme Court is assuming that Article 50 can’t be revoked
Supreme Court President David Neuberger said judges deciding a landmark challenge to the government’s Brexit plans are proceeding on the basis that giving formal notice of Britain’s intention to leave the European Union can’t be reversed.
/goo.gl/AUbUOQ

Exchanges, OTC and Clearing

Euronext wins approval to buy 20% stake in EuroCCP
Philip Stafford – Financial Times
Euronext is set to offer its customers greater choice over where they clear their share trades from early next year after receiving regulatory approval to buy a 20 per cent share of EuroCCP, an equities clearing house.
/goo.gl/D6pJu8

London Stock Exchange Group Opens New Technology Facility in Sri Lanka
London Stock Exchange Group
London Stock Exchange Group (LSEG) today announces the opening of its new state-of-the-art technology facility in Sri Lanka. Headquartered in the TRACE Expert City precinct of Colombo, the new technology hub was opened by the Prime Minister of Sri Lanka, Ranil Wickremesinghe and LSEG Chairman, Donald Brydon. A delegation including the honourable Patali Champika Ranawaka MP, Minister of Megapolis & Western Development, the honourable Ravi Karunanayake MP, Minister of Finance and Xavier Rolet, CEO of LSEG attended the opening event.
/goo.gl/0Qf8tU

Nasdaq looks to reduce data fees for broker-dealers
The Trade
Nasdaq has proposed a reduction in its monthly data fees for broker-dealers and to eliminate a requirement that broker-dealers purchase other products to qualify for a license.
/goo.gl/lpWuFK

JPX to register and monitor high frequency traders
Automated Trader
Tokyo – Japan Exchange Group (JEG), which runs the country’s two most important exchanges, the Osaka Securities Exchange and Tokyo Stock Exchange, has announced plans to both register and monitor high frequency traders (HFT).
/goo.gl/mHY6CP

London Stock Exchange Group Opens New Technology Facility In Sri Lanka
Mondovisione
London Stock Exchange Group (LSEG) today announces the opening of its new state-of-the-art technology facility in Sri Lanka. Headquartered in the TRACE Expert City precinct of Colombo, the new technology hub was opened by the Prime Minister of Sri Lanka, Ranil Wickremesinghe and LSEG Chairman, Donald Brydon. A delegation including the honourable Patali Champika Ranawaka MP, Minister of Megapolis & Western Development, the honourable Ravi Karunanayake MP, Minister of Finance and Xavier Rolet, CEO of LSEG attended the opening event.
/goo.gl/PSW7Ne

London Stock Exchange Group opens new tech facility in Sri Lanka
Lanka Business Online
London Stock Exchange Group (LSEG) yesterday announced the opening of its new state-of-the-art technology facility in Sri Lanka.
/goo.gl/Sqon2K

NCDEX launches NextGen trading system for market development
Money Control
National Commodity and Derivatives Exchange Ltd. (NCDEX), India’s leading commodity exchange, today announced the launch of NextGen – a new trading and surveillance system that will bring greater convenience, speed, safety and transparency to the market.
/goo.gl/MDYGb2

In NSE offer, FIIs look to shed most; Exchange’s shareholders hopeful that initial public offering of shares will remain on track despite CEO exit
Samie Modak & Pavan Burugula – Business Standard
The National Stock Exchange (NSE) has finalised the list of shareholders that will be tendering their shares in its much-awaited initial public offering (IPO).
/goo.gl/Rs56cJ

IG Group share price drops 25 per cent, Plus500 down 32 per cent CMC Markets loses 27 per cent as City watchdog moves to tighten spreadbetting rules
Caitlin Morrison – City AM
Shares in spreadbetting firms have tumbled in early trading on the news that the City watchdog is planning to tighten rules around contract for difference (CFD) products.
/goo.gl/DhEbo1

TMX says blockchain, fintech still a priority after executive exit
Business Recorder
Canada’s biggest stock exchange operator is committed to exploring new technologies such as blockchain despite the exit of its first chief digital officer after less than a year in the job, a senior TMX Group Ltd executive said on Tuesday. “This continues to be a priority for us as we look to modernize the business,” Jean Desgagne, head of Global Enterprise Services at TMX, said in an interview.
/goo.gl/GDCzj8

Politics

Trump Seen as Biggest Global Economy Risk, Oxford Economics Says
Bloomberg
U.S. President-elect Donald Trump’s future policy stance poses “the single largest risk to the global economy,” according to a client survey by forecasting firm Oxford Economics Ltd.
/goo.gl/paGiAO

Life in the Trump Belt Doesn’t Pay if You’re Old; The economic suffering of some workers in Michigan, Ohio, Pennsylvania, and Wisconsin has been stark.
by Suzanne Woolley – Bloomberg
The Rust Belt’s transformation into the Trump Belt was a central element of the real estate magnate’s electoral victory. The economic component is well known: A recovery that followed the subprime collapse during President George W. Bush’s second term left the former industrial heartland behind. Once reliable Democratic supporters began turning away from a party that was seen, rightfully or not, as less responsive to their needs.
/goo.gl/WoyNxv

Investing and Trading

Stranded money: Investors can face peril when ETNs delist
Trevor Hunnicutt – Reuters
Investors are rushing to get out of a top exchange-traded note before it stops trading publicly, and those who fail to find a buyer may be stuck for years in a widely misunderstood product. Credit Suisse’s $1.1 billion VelocityShares 3x Long Crude Oil ETN (UWTI) is poised on Thursday to become the largest-ever note to be delisted from U.S. exchanges.
/goo.gl/Gexm7l

Futures Traders Love Small Caps at the Same Time They’re Shorting the S&P 500
Oliver Renick – Bloomberg
Enthusiasm for U.S. small-cap stocks does nothing but increase, even as bullishness shows signs of waning for their larger brethren about a month after Donald Trump’s election.
/goo.gl/OgwHce

Investing In Recent IPOs With ETFs
Jay Ritter – Forbes
For several decades, I have published articles and provided information on my website documenting that, on average, initial public offerings (IPOs) underperform the market in the three years after going public. For example, for the 8,061 U.S. IPOs from 1980-2014, an investor who put an equal amount of money into every deal at the end of the first day of trading and held for three years would have earned an average buy-and-hold total return of 22.1%, a compounded return of about 7% per year.
/goo.gl/1KIM4X

How Entrepreneurs Can Make Peace With Undiversified Investments
By CARL RICHARDS – NY Times
If you’re an entrepreneur, traditional financial advice, starting with the drumbeat of diversification, does not apply to you.
/goo.gl/a3EB1A

A hot investing startup wrote an open letter to Donald Trump, and is setting the stage for a battle on Wall Street
Rachael Levy – Business Insider
Betterment, a startup that provides automated investing in index funds, is asking President-elect Donald Trump to leave in place a rule that’s meant to protect Americans’ retirement money from conflicted financial advisors. The Department of Labor’s fiduciary rule, which takes effect in April, mandates that all financial advisors serve in their client’s best interest rather than their own. It is aimed at those who oversee retirement money.
/goo.gl/xS8Qpl

Wall Street as Landlord: Blackstone Going Public with a $10 Billion Bet on Foreclosed Homes
By RYAN DEZEMBER – WSJ
Jonathan Gray of Blackstone Group LP went on the biggest homebuying spree in history after the U.S. foreclosure crisis, purchasing repossessed properties from the courthouse steps and through online auctions.
/goo.gl/wm5Nnt

Why active fund managers should cheer the rise of ETFs; Surge in passive investing fanned by these funds is a boon to traditional investors
by: Miles Johnson – FT
The supposed death of the stock picker has become one of the dominant narratives of post-crisis finance.
/goo.gl/vT255W

Institutions

Chicago Federal Reserve President Speak Candidly About State of US Economy
by Jessica Darmoni – The Title Connection
Federal Reserve Bank of Chicago’s President and CEO, Charles Evans, spoke at the Mid-America Club on Monday morning, December 5 and participated in a fireside chat with CME Group’s Chairman and CEO, Terry Duffy. Speaking candidly about the state of the economy, inflation rates and monetary policy challenges, Evans was cautiously optimistic about growth in the United States and explained why we have experienced economic boosts in the past.
/goo.gl/QWTWDL

Barclays’ exit from energy trading stirs concerns over liquidity
Catherine Ngai and Olivia Oran – Reuters
British bank Barclays Plchas joined the list of top banks to exit energy trading, an exodus that analysts say raises concern among oil producers that falling liquidity means they cannot use derivatives for their basic function: to hedge risk by locking in future prices. Wall Street firms have scaled back in commodity markets since the 2008 financial crisis from owning physical assets or taking positions in the market in the face of regulatory scrutiny. The banks were big players in the market for derivatives years into the future.
/goo.gl/ppjKn2

Rescue of Italian bank Monte Paschi in danger after Renzi’s defeat
Silvia Aloisi and Andrea Mandala – Reuters
A 5 billion euro ($5.33 billion) rescue plan for Italian bank Monte dei Paschi di Siena (BMPS.MI) hung by a thread on Monday after Prime Minister Matteo Renzi’s defeat in a referendum and pledge to resign.
/goo.gl/JskZJ6

Morgan Stanley Raises Hurdles for Brokers’ Compensation
Bloomberg
Morgan Stanley changed its compensation plan, forcing some of its brokers to generate more revenue to avoid a pay cut next year, according to a person with knowledge of the move.
/goo.gl/OITE4t

Goldman Sachs alumni who went on to wield real power
Laura Sanicola – Yahoo Finance
President-elect Donald Trump tapped Goldman Sachs alumnus Steven Mnuchin for Treasury secretary last week, and he’s just one of the bank’s alumni to go on to a powerful position in the public sector.
/goo.gl/22OOv9

Goldman, Citigroup in Crosshairs of Diversity Activists for 2017
by Laura Colby – Bloomberg
Shareholders seek gender pay-gap data, statistics on hiring; Focus on banks follows successful campaign on tech companies
A trio of activist investors is targeting big U.S. financial institutions in 2017, demanding they disclose compensation data for men and women, and publish statistics about the race and gender of their employees.
/goo.gl/PxeGIw

Hedge fund Kerrisdale saw drop in assets, lost some staff: sources
Svea Herbst-Bayliss – Reuters
For hedge fund manager Sahm Adrangi, 2016 is the year that can not end quickly enough. Seven months after raising a fund to bet against the stock of direct broadcast service provider DISH Network and nearly four months after being arrested following a car crash in the Hamptons, assets at Adrangi’s firm have been nearly cut in half, two people who are familiar with the fund’s operations said.
/goo.gl/g3d7A1

Banks’ post-crisis consultancy spending soars to $200bn; US lenders pay out $80bn from 2008 to 2016 as regulation drives increase
by: Laura Noonan – FT
Retail banks across the globe spent $200bn on consultancy fees in the aftermath of the financial crisis as they battled to keep up with ever-changing regulations and to return their businesses to the black.
/goo.gl/B7nBSP

Barclays to Save $45 Million in Office Sublet to Government
by Stephen Morris – Bloomberg
Cabinet Office to lease 540,000 square feet in Canary Wharf; Bank is cutting real estate footprint as headcount shrinks
Barclays Plc agreed to sublet office space in London’s Canary Wharf financial district to the U.K. government, saving the cost-pressured British bank about 35 million pounds ($45 million) a year.
/goo.gl/OOpaGf

U.K. Financial Sector Paid $91 Billion in Annual Tax, Study Says
by Stephen Morris – Bloomberg
Industry contributed 11.5% of total government receipts; Report comes amid lobbying for tax cuts after Brexit vote
Financial companies in the U.K. paid 71.4 billion pounds ($91 billion) in tax in the latest fiscal year, 7.4 percent more than a year earlier, driven by an increase in the levy on banks’ balance sheets, a report from the City of London Corp. showed.
/goo.gl/Cgdtil

Fintech

Deutsche Bank Doubles Down on Fintech with New Technology Hires; Elly Hardwick and Philip Milne join innovation team to drive adoption of new technologies
By STEVEN NORTON – WSJ
Deutsche Bank AG named two new technology leaders Monday as the German lender expands its bet on fintech amid broader moves to cut costs and restore long-term stability.
/goo.gl/jnWI1p

Supermarkets, pig farmers and cotton traders turn to blockchain; Technology behind bitcoin harnessed by more mundane sectors in bid to root out fraud
by: Louise Lucas in Hong Kong – FT
Blockchain, the technology behind bitcoin, is being harnessed by the more mundane world of supermarkets, pig farmers and cotton traders as a means of rooting out fraud.
/goo.gl/s3Gbst

As Fintech Comes of Age, Government Seeks an Oversight Role
White Collar Watch
By PETER J. HENNING – NY Times
The Beatles sang “I’m the taxman, and you’re working for no one but me.” The Internal Revenue Service is delivering that message to users of Bitcoin as it demands information from Coinbase, the largest virtual currency exchange that maintains “wallets” for holding digital value. The government wants to know about the identities of those who may be trying to hide income.
/goo.gl/gAziNv

Percentile launches tool to address FRTB
Percentile
Percentile, leading innovator in risk management and RegTech, today announced the launch of RiskMine FRTB Standardised Calculator, a tool which allows banks to meet the key requirements of BCBS’s new market risk capital standards. The regulations, resulting from the Fundamental Review of the Trading Book (FRTB), are widely seen as the next major compliance challenge following MiFID II. Both the complexity and the timeframe of the regulations are set to become a major concern for financial institutions.
/goo.gl/ThOcRJ

Dynamo Software Opens Dedicated Asia-Pacific Office
Dynamo
Dynamo Software, a premier multi-national provider of configurable, industry-specific asset management software for the alternative investment industry, is proud to formally announce the opening of an Asia-Pacific Sales and Client Service office in Singapore. Located in the Samsung Hub commercial building, Dynamo Software’s newest location extends the company’s mission to provide exceptional service to the company’s global client base, and will be dedicated to supporting prospects and clients in Asia and Australia.
/goo.gl/iqLnwB

Paris Mega-Campus Takes Startup Seduction Campaign to London
by Marie Mawad – Bloomberg
Telecom tycoon Niel spent $268 million on entrepreneur hub; Lined up partners Facebook, VCs as first settlers of Station F
French billionaire Xavier Niel wants thousands of technology entrepreneurs, investors and inventors to base themselves in the Station F mega-campus for startups he’s building in downtown Paris — and he’s starting his search for them in London.
/goo.gl/o7kxev

Regulation

CFTC Reproposes Position Limits Rule
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today voted unanimously to repropose regulations implementing limits on speculative futures and swaps positions as called for in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). In a separate vote, CFTC approved final aggregation regulations, which are a key component of the CFTC’s existing position limits regime. The reproposal will be open for public comment for 60 days after publication in the Federal Register.
/goo.gl/RXxWie

THE CFTC (Stil) Wants Your Intellectual Property
Crow & Cushing: Counselors at Law
In the face of widespread industry criticism, and the vehement objections of one of its own Commissioners, the CFTC has now largely scrapped proposed Rule 1.81 and replaced it with Rule 1.84.3 The new proposal would require that covered traders maintain for a period of five years source code they use, material changes to the code and logs recording the activities of their algorithmic trading systems.
jlne.ws/2gVtRrf

Market Guidance on Standardization of the ISDA Variation Margin CSA
ISDA
The International Swaps and Derivatives Association, Inc. (ISDA) today published a market guidance note from its Board of Directors on the standardization of the ISDA Variation Margin Credit Support Annex (CSA). The note is intended to provide guidance and strategic perspectives on the possible benefits of further standardizing elements of the current ISDA Variation Margin CSA.
/goo.gl/Ven9Vn

Videos: Preparing for the Variation Margin Rules
ISDA
ISDA has published a trio of videos looking at the implementation of margin rules for non-cleared derivatives. The series provides an overview of the margin rules, with a particular focus on the challenges posed by the variation margin ‘Big Bang’ on March 1, 2017.
/goo.gl/fxrCcL

R.B.S. Reaches Agreement to Settle Rights Issue Litigation
Chad Bray – NY Times
The Royal Bank of Scotland said on Monday that it had reached an agreement to settle a majority of shareholder claims over a rights issue by the lender before its near collapse in 2008. The litigation was related to the bank’s raising of 12 billion pounds, or about $15 billion at current exchange rates, weeks before it was rescued by the British government. R.B.S., which remains 73 percent owned by the British government, received a £45 billion bailout that year.
/goo.gl/MVUEsJ

FESE Response To ESMA On The Benchmarks Regulation Consultation Paper
Mondovisione
FESE supports working with ESMA to construct a workable regime for benchmarks provided by trading venues. FESE’s response to the ESMA consultation on technical standards for the Benchmark Regulation focuses on the main following areas: the definition of regulated data, transitional provisions, third country provisions, exemptions to the benchmark methodology in case of sudden market events and the provisions for code of conducts and compliance statements.
/goo.gl/w64NWf

2017 and First Quarter of 2018 Report Filing Due Dates: Annual Audit; FOCUS; Form Custody; Supplemental Statement of Income (SSOI); Supplemental Schedule for Derivatives and Other Off-Balance Sheet Items (OBS); and Supplemental Inventory Schedule (SIS)
FINRA
FINRA reminds firms of their Annual Audit, Financial and Operational Combined Uniform Single (FOCUS), Form Custody, and supplemental FOCUS Report filing obligations. All such filings must be received by FINRA by their required due dates to avoid specified fees as set forth in Schedule A to FINRA’s By-Laws and to avoid suspension of FINRA membership. This Notice provides the due dates for filings that are due in 2017 or in the first quarter of 2018. All filings submitted to FINRA must be made electronically though FINRA’s Firm Gateway.
/goo.gl/aGsFdE

IT Specialist Settles Charges of Insider Trading on Hacked Nonpublic Information
SEC
The Securities and Exchange Commission today announced insider trading charges against a San Francisco-based information technology specialist who allegedly hacked senior executives at online travel company Expedia and illegally traded on company secrets.
/goo.gl/z9udKf

SEC Awards $3.5 Million To Whistleblower
SEC
The Securities and Exchange Commission today announced that a whistleblower has been awarded approximately $3.5 million for coming forward with information that led to an SEC enforcement action.
/goo.gl/0gjMKH

What is spread betting and why does the FCA want to tighten up the rules?
Julia Bradshaw – Telegraph
Britain’s financial watchdog wants to tighten up the rules governing spread betting, a form of financial trading. It’s worried that ordinary investors are losing huge sums of money because they don’t understand what they’re getting themselves into.
/goo.gl/Z8XnHD

Regions

Emerging Market Crisis Echoes Grow Louder
Christopher Langner – Bloomberg
Everyone who covers emerging markets has heard the mantra: Yes, there’s a lot of debt but, unlike the late 1990s, sovereign balance sheets are fine. Corporations are the ones to worry about, and they are hardly ever sources of systemic risk. That may have been true five years ago. It isn’t any longer, if the companies that specialize in assessing credit strength are to be believed. Fitch Ratings, Moody’s Investors Service and S&P Global Ratings have taken 3.1 times as many negative actions as positive on sovereign and government-related bonds from emerging markets this year. The last time the ratio was this high was in 1998, in the middle of the Asian financial crisis.
/goo.gl/kO2Mgd

What can be done to stop an Italian banking crisis?; Renzi’s defeat brings closer moment of reckoning for rule book
by: Alex Barker and Jim Brunsden – FT
Italy is the first and possibly the most important test of Europe’s new regime for handling failing banks.
/goo.gl/dIbVyD

Why China Can’t Stop Capital Outflows
By Christopher Balding – Bloomberg
How China manages its currency is likely to be the global economic story of 2017. Despite the government’s best efforts, capital continues to leave the country at a brisk pace, with a balance-of-payments deficit through the third quarter of $469 billion. Attempts to arrest this flow probably won’t work. But they may well create new risks.
/goo.gl/PMO5yy

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