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Author Archives: Jim Kharouf

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Kharouf is CEO of John J. Lothian & Co. and editor-in-chief of John Lothian News (JLN). He edits the John Lothian Newsletter, MarketsWiki and MarketsReformWiki.

Options Industry Conference Preview Part 2: OCC’s Craig Donohue on Gina McFadden and Changes at the Top of OCC Standard

As the 35th Options Industry Conference gets underway, OCC Chairman and CEO Craig Donohue spoke with John Lothian News about everything from the industry’s first woman to be awarded the Joseph Sullivan Award to executive changes at the clearinghouse. Gina McFadden served in the options industry for almost 40 years. She served as president of The Options Industry Council (OIC) from 2006 to 2013 and executive vice president at The Options Clearing Corporation (OCC). She retired from both of those positions in September 2013. At OIC, McFadden was responsible for business and product development, corporate communications, and investor and internet…

Options Industry Conference Preview Part 1: Is Regulation Damaging the Options Space? Standard

The cost of regulation is heavy on certain participants in the options industry, and OCC is trying to help clearing firms and market makers deal with it. “One of the things we’re most focused on is the increased capital burdens of doing business in the industry, and that’s starting to have an effect on liquidity provisions and trading,” Donohue said. By that, Donohue is referring to the risk weighted assets for bank clearing members which fall under various regulatory regimes at the US Treasury and the Basel Committee.  These issues and others will be discussed at the upcoming Options Industry…

FinTech Exchange: Haraburda Says Alternative Data the Next Step Standard

How big is your data set? Mark Haraburda, CEO of Barchart, which hosts the FinTech Exchange 2017 conference last month, said the data space is quickly expanding and innovating in new ways. “This year the event has been focused on data, the way data is delivered, the way data is stored, the way data is analyzed and visualized as well as the new types of data in the alternative data space,” he said. Haraburda and Barchart see a lot of potential in the alternative data space, especially in the types of data derived from satellite imagery. Everything from agriculture production…

D is for Data: FinTech Exchange Standard

The sold-out FinTech Exchange conference, hosted by Barchart, was largely about data – what to do with data, how exchanges are capturing new data and how to trade it. That, on its surface, isn’t particularly new. But the infrastructure to capture all kinds of data is now developed. The CME Group’s Julie Armstrong Menacho colorfully outlined how the exchange has migrated all of its historical data onto the cloud, giving customers greater access to it, along with a growing list of partners who provide alternative data sets like satellite images of oil storage facilities or social media sentiment. CBOE’s Catherine…

The future of futures markets: Exchanges looking to fail fast Standard

Andreas Preuss, deputy CEO, Deutsche Boerse had a show stopper. At the IOMA: World Federation Exchanges conference in Frankfurt on Friday, he said his exchange will have to speed up its business processes exponentially in the next two to three years in order to thrive. Implementing products and services from beginning to release will go from today’s 18 months to 4 days. Yes, you read that correctly. And no, no one in the audience was laughing. “The old way was seven months of iterations of prototypes,” Preuss said. “In the world I am aiming at, the business IT and operations…

Testing the Waters: Blockchain Technology is Edging into the Exchange Space Standard

By now, the hype surrounding digital ledger technology has subsided into reality. The reality, however, is that initial blockchain-based solutions are on the way. The hysteria that blockchain was going to be the big disruptor that puts clearinghouses out of business is essentially over. What is sprouting up instead are some interesting projects that are much more targeted at markets and sectors that beg for technological advancement. At the IOMA: WFE Conference in Frankfurt, Anton Govor, managing director and head of strategy for Moscow Exchange Group said the exchange has developed a working digital ledger-based proxy voting product. It is…

Chess Moves: Can Exchange M&A Really Make Shareholders And Customers Happy? Standard

I put CBOE’s John Deters on the spot. “Do you care about your customers, John?” I asked. “Yes, we care very much about our customers,” he replied. As chief strategy officer and head of multi-asset class solutions at CBOE Holdings, Deters really does care about them.  But that is a question end users often ask about exchanges today, especially as we look at the M&A activity in the stock, futures and options space. On a panel I moderated at the IOMA: WFE Conference in Frankfurt, we addressed the issue of consolidation with Deters as the lone exchange representative, Gedon Hertshten,…

The Tough Question: What Will European Markets Look Like In Two Years? Standard

Markets continue to struggle with the prospects of a new political future and structure. Steven Maijoor, chair of European Securities and Markets Authority (ESMA), told the audience at the IOMA, World Federation of Exchanges Clearing and Derivatives Conference in Frankfurt on Thursday that there are challenges for the EU’s long pursuit of a single rulebook. Brexit will have a “negative impact” on efforts for market harmonization, as well as the so-called capital market union in the EU. David Wright, chairman of Eurofi Paris and partner at Flint Global, said the United Kingdom will have to be a “rule taker and…

A Difference Maker: Post-trade Clearing Tech Now a Differentiator For Firms Standard

If today’s markets are traded in milliseconds, why can’t post-trade clearing keep up? ION is addressing that with its XTP clearing solution, a near real-time system it has quietly been rolling out since 2015. Last year the product was adopted by a handful of firms. And this year, ION is hoping to see a larger migration of customers to the new platform, which is considered a major upgrade to its Rolfe & Nolan system. It took ION four years to build the system, creating it on top of ION’s core trading technology. The low-profile firm is stepping out a bit…