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Category Archives: John Lothian Newsletter

The John Lothian Newsletter provides news and commentary about the global exchange traded derivatives, securities, environmental and related OTC markets. The daily email intelligence briefing and companion blog are edited by and .

John Lothian Newsletter: Bats Chi-X Europe remains firm market favourite; Stress for Banks, As Tests Loom; Eurozone launches E500bn rescue fund Standard

BATS Chi-X Europe has seen its share of big changes, and it has managed to continue its role as a significant competitor in the region. Banks and regulators jockey for position regarding this fall’s latest stress tests, as banks want more details about how regulators are producing their results, and the regulators are so far content with their “none of your business” stance.  Eurozone ministers formally unlock the doors for a half-trillion euro rescue fund, but they still haven’t conclusively indicated whether Spain and Ireland are allowed to come inside for help.

John Lothian Newsletter: SEC Regulators Turn To High-Speed Trading Firm; Fund Managers Struggle As Investors Turn Passive; Record Crash Prompts Indian Exchanges To Seek New Limits Standard

The SEC, looking for ways to better monitor and regulate high-frequency trading firms, turns to a high-frequency trading firm for help. Active fund managers, struggling with dishwater returns and an unpalatable fee structure, are having trouble re-engaging with investors who have become enamored with more passive investment choices. The NSE and others in India are calling for new and better trading limits in the wake of last week’s Indian Flash Crash.  In First Read today, take a look at the MarketsWiki.tv interview with John Savercool of UBS, who talks politics and finance with JLN’s Jim Kharouf. Also, if you didn’t…

John Lothian Newsletter: Banks Raise Fresh Challenges To Exchanges’ Legal Safeguards; Despite Gains, Many Flee Stock Market; Emkay Global’s Bad Orders Trigger Brief Halt On Nifty Standard

Banks are calling out exchanges on legal protections that they say should be rewritten to more closely match the rules for other participants. The stock market may be rallying, but investors are pulling out large chunks of money and looking for other financial playgrounds. India’s NSE had its own “flash crash” today, as incorrect orders from a trader caused a brief two-digit drop in the value of the Nifty index. In today’s First Read, be sure to catch the final installment of the John Lothian Profiles series featuring Tom Cashman.

John Lothian Newsletter: Veronica Augustsson new CEO of Cinnober; Exchanges Cancel Trades That Sent Kraft Up 29%; Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation Standard

Software company Cinnober promotes Veronica Augustsson to CEO.  In what is becoming a fairly common occurrence, trades in a stock spiraled out of control for reasons not immediately known; and after reviewing the market behavior, exchanges canceled abnormal orders and trades.  The US Comptroller of the Currency, long viewed as a rubber-stamp overseer of the banking industry, is shifting direction under new leadership to begin taking a more careful hand in regulation.  In First Read today, follow the link to the fourth part of the John Lothian Profiles video interview series featuring Tom Cashman of the CBOT, who in today’s…

John Lothian Newsletter: Market Complexity Cited In Snafus; U.S. Steps Up Probes On Insider Trading; ‘Budgetary Crystal Meth’ Risks U.S. Haven Status, Gross Says Standard

Regulators receive large boxes of input and opinions regarding the control of the modern financial trading system; but those opinions vary greatly on the nature of the bell, and who is best suited to put it on the cat.  Along with keeping control of the new electronic trading frontier, regulators in the U.S .are very busy looking into the less high speed practice of insider trading.  PIMCO’s Bill Gross holds nothing back, and says the future of the U.S. as an investment haven is in jeopardy if  the U.S. continues to fuel itself on addictive debt fixes.   A week…

John Lothian Newsletter: CFE To Launch S&P 500 Variance Futures On October 4; Chicago Fed warned SEC about high-frequency trading; Bond trading model shows signs of stress Standard

The CBOE Futures Exchange announces a new S&P 500 variance futures contract, slated to begin trading on October 4 assuming that it receives a thumbs-up (or at least a “thumb-of-no-action”) from regulators.  In the latest episode of, “We Told Them Years Ago,” the SEC comes under fire for having been warned about high-frequency trading two years ago by the Chicago Fed, long before its recent interest in regulating the practice.  New regulations and trading environments are shaking up the once stable domain of the bond trader.  In today’s First Read, be sure to take a look at the second part…

John Lothian Newsletter: Deutsche Börse Eyes Currency-Futures Challenge To CME; Former Chi-X Chief Haynes To Set Up New Trading System; CFTC Grants TrueEX Exchange Status To Offer Interest-Rate Swaps Standard

Competition Monday starts with news that Deutsche Börse is considering new currency futures products in Europe to challenge the upcoming CME Group offerings. Alasdair Haynes, ex-Chi-X Europe boss, has plans to start a new alternative trading system to compete with his former company, as well as with established traditional exchanges. In the U.S., the CFTC gives a thumbs-up to new exchange TrueEX to create interest-rate swap products for trading. In First Read today, be sure to take a look at the new John Lothian Profiles feature:  in-depth interviews with some of the trading community’s most interesting and influential people. The…

John Lothian Newsletter: Fears Over Counterparty Rules Dent LSE; FSA Seeks To Mend Libor, Not End It; Asian Energy Markets Liquid Enough To Sidestep Dodd-Frank Compliant Firms Standard

The London Stock Exchange’s value takes a hit as it announces that new European regulations will significantly impact LCH.Clearnet, the clearing company it is about to control. Also in the UK, the Financial Services Authority takes over the Libor interest rate project and seeks to clean house without completely abandoning the index. In Asia, CME Group notes that energy trading companies are liquid enough that they can avoid trading swaps with U.S. Dodd-Frank-regulated firms.

John Lothian Newsletter: SEC Looks for the ‘Kill Switches’; CME Announces Launch of Chinese Steel Rebar Swap Futures; Exchanges See No Unfairness in Data Delivery Speeds Standard

The SEC launches a broad investigation and overhaul of order placement systems and controls, seeking new ways to control and mitigate damage from high-speed orders.  Sort of “Finding Nemo: The Financial Episode”, perhaps. CME Group announces the planned launch date for the exchange’s new Chinese steel rebar swap futures contract.  Exchanges have carefully considered the various speeds and methods available for market participants, and have concluded that it’s really ok to charge more for better access.  In today’s First Read section, be sure to check out the JLN Metals box and the interview there with Michael Turek, senior director of…