Breaking News

Author Archives: Sarah Rudolph

About Author

Rudolph is managing editor of John Lothian News (JLN).

Squeezing Pennies: Clearing Houses Reach For Compression, Margin Relief and Netting Standard

When it comes to clearing and settlement today, the name of the game is capital efficiency. With a host of regulations hitting the market, particularly with bank capital requirements under Basel III, exchanges and clearing houses are moving quickly to find ways for banks and clearing FCMs to lower the amount of cash they need to hold onto in the name of lower systemic risk. It is an interesting time to be in the clearing space, as clearing firms offer a number of new services and some oldies aimed at clearing FCMs. Portfolio margining, which has been done more or…

ISE Getting A New Parent Standard

Amid all the talk about mega-deals in the exchange space, Nasdaq has grabbed the latest headlines with a deal to buy the International Securities Exchange, (ISE) for $1.1 billion. The transaction is expected to close in the second half of 2016. The move bolsters Deutsche Boerse‘s pocketbook in its push to merge with the London Stock Exchange. From Nasdaq’s perspective, they get a relative bargain in the ISE, which was bought by Deutsche Boerse’s Eurex for $2.8 billion cash in December 2007. At the time, the ISE held 28.1 percent of the US equity options marketshare, second only to CBOE…

TAC Meeting Part 2: Algo Traders Say Reg AT Putting Trading Firms at “Precarious, Unwarranted and Unnecessary Risk” Standard

At the top of the list  at the CFTC’s Technology Advisory Committee meeting on Tuesday was a discussion of the CFTC Proposed Rule: Regulation Automated Trading (Reg AT). The most contentious aspect of the discussion was whether or not the CFTC should be allowed to look at firms’ computer code for their automated trading systems and hold them in a repository. The CFTC seems convinced this is necessary and the automated traders seem equally convinced that it is a terrible thing to do. Access to firm’s proprietary codes would help the CFTC determine whether there was intent in cases of…

CFTC Tackles the What Ifs of Blockchain Standard

On Tuesday the CFTC’s Technology Advisory Committee (TAC) met to discuss a few issues including “Blockchain and the Potential Application of Distributed Ledger Technology to the Derivatives Markets.”  A mouthful to be sure, but a timely discussion. As the first time the TAC has held a public panel on blockchain, the quick take-away was summed up by commissioner Christopher Giancarlo who said it is difficult to know where this will all lead but regulators should not stand in the way of a potentially important technology. Sandra Ro from CME opined that 2016/2017 is when we will start to see blockchain…

Reg AT Stirs Concerns Ahead of CFTC TAC Meeting Standard

The CFTC’s Technology Advisory Committee (TAC) was scheduled to meet on Tuesday to discuss three issues important to the trading industry: 1) the CFTC’s proposed Regulation Automated Trading (Reg AT); 2) swap data standardization and harmonization; and 3) the potential of blockchain and distributed ledger technology to the derivatives market. Unfortunately, winter storm Jonas, aka Snowzilla, hit Washington DC with a record two feet of snow, and the meeting has been postponed. In the weeks leading up to the meeting, there has been a steady stream of stories about blockchain, which is seen as a bit “sexier” than a 500-page…

STAC Tackles Volatility, Social Media and Blockchain Standard

STAC Conference

The Security Traders Association of Chicago holds its Midwinter Meeting this week at the Hilton, bringing in industry participants from a variety of warmer climes than Chicago. Day one covered such seemingly disparate issues as volatility and volatility products, social media for traders, and Bitcoin/Blockchain technology.   Some highlights from the panel called “Volatility: Shaken Up with New Products and Less Risk”, moderated by the CBOE’s Matt Moran, included: If you look at skew worldwide, it is highest in the U.S.  One reason for this, according to Joe Aiken from Malachite Capital Management, is that most S&P option activity is…

WILD Symposium Explores Opportunities and Challenges in a Changed Industry Standard

The Women In Listed Derivatives (WILD) annual symposium last week at the Chicago Federal Reserve Bank addressed a pressing question and one that men face as well. Now that floor trading is mostly gone and that route into the business closed, what can young women do to get into the industry and what can the veteran professionals do to help them? This fourth year for the event was a chance for women in the derivatives industry to be among a sea of women, rather than the usual sea of men we find at most industry gatherings. WILD aims to help…

African Exchanges Emerge at SFOA Conference in Switzerland Standard

Emerging markets face many economic challenges, not the least of which is setting up exchanges in order to facilitate price discovery and to help farmers and others hedge their products. But with the help of mobile technology and a spirit of cooperation among regions, some exchanges in Africa are getting started for the first time and attempting to create alliances that will help bring price transparency and hedging to the region. Leaders of these exchanges spoke about their plans at a panel at the SFOA Conference in Geneva, Switzerland. Africa has enormous potential for growth, with more than 30 out…

JLN Financials: EU watchdog unveils new rules for bloc’s securities markets, MFA Updates Equity Market Structure Recommendations, Urges Regulators to Conduct Standard

First Impressions Joseph Niciforo, HC Technologies – Profiles in Risk: Vision and Discipline JohnLothianNews.com “If you don’t have disciplined risk management, you’re not going to be in the game.” After earning a law degree in 1988, Joe Niciforo turned down a six-figure offer to join a big law firm, opting instead for a salary at 30 percent of that number, to work as a trader for the legendary Paul Tudor Jones II. He would eventually become a partner and managing director at Tudor Investment Corp, but his trading career almost got cut short once when he violated his own risk…