As expected, the baleful eye of the regulators swings toward four more banks that may have engaging in LIBOR shenanigans with Barclays. As if the current crop of regulatory train wrecks were not enough, the tri-party repo market is flagged as having been systemically vulnerable to trouble for years. Singapore Exchange toughens requirements for listing companies, hoping to reform its roll of titles and attract more interest from around the world. In the top box, take a look at a MarketsWiki.tv interview with Cinnober CEO Javier Tordable; and if you haven’t seen the MW.tv interview with Kevin Cook of Autumn…
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 John Lothian and Jon Matte.
John Lothian Newsletter: CFTC Chief Admits Failure In Oversight Of Peregrine; U.S. To Launch Broad Review Of Futures Firms; Tradition Brokers First Trade On LNG East Asia Index
Gary Gensler, head of the CFTC, agrees that the agency fell short when it failed to detect fraud at Peregrine over a 20-year time frame. With a second, fresh failure in the “customer fund safety” department, a number of companies and regulatory groups in the futures industry have agreed to undertake bold steps to actually verify that funds on deposit are fully and properly in place for remaining companies in the industry. Broker Tradition has successfully completed the first-ever exchange-cleared (using CME Direct Screen) OTC trade for liquid natural gas.
John Lothian Newsletter: HSBC Probe Shows Bank Allowed Money Laundering; Barclays executive says acted on orders on Libor; NYSE shelves plans for CFD market
Senate investigators call HSBC’s number in the “banking scandal queue”, and release their statement detailing the bank’s involvement with terrorists and money launderers. In London, a Barclays exec testifies that contrary to what was said last week, he did indeed get orders to jimmy the LIBOR rate from his CEO boss. Only months after announcing it, NYSE Euronext puts away plans to create a retail CFD trading platform for commodities, currencies and equities.
John Lothian Newsletter: U.S. Is Building Criminal Cases In Rate-Fixing; Trading In Paradise: Green Light For First Seychelles Exchange; U.S. Approves New Rules To Protect Futures Customers
The U.S. Justice Department is identifying both firms and individuals as prosecution candidates in the unfolding LIBOR scandal. On a related note, Deutsche Bank volunteers to be the First Canary, and help take down its former rate-fixing pals in exchange for a lighter punishment of its own. The Seychelles steps up to create a new exchange, evidently seeing fresh opportunity in globally-declining volumes and industry consolidation. The CFTC takes bold steps in the wake of the MF Global… that is, the PFG scandal, and moves to approve rules to help protect customer funds against yet another looting crisis.
John Lothian Newsletter: Peregrine Details Plans For Liquidation; Banks’ Libor Costs May Hit $22Bn; Let Sellers Of The LME Beware
The trustee for exploded brokerage Peregrine Financial announces the liquidation plan for the company; along with that news, there are plenty more updates, developments and commentary on PFG in the newsletter. Continuing liability analysis of the LIBOR scandal suggests banks might pay out more than $20 billion in related settlements and fines. Not all is happiness and rainbows regarding the sale of the London Metal Exchange to HKEx; more than one industry participant expresses concern over the possibility that well-established and efficient transaction conduits could be negatively affected by a transfer of ownership.
John Lothian Newsletter: Fall of Peregrine’s Wasendorf Presaged in Christmas Toast; Canada’s TMX in Talks to Buy Direct Edge; LSE and Singapore set to cross-trade
TMX Group, in the middle of being acquired, is looking to buy Direct Edge. London Stock Exchange and Singapore Exchange create a preliminary agreement for cross-listing, possibly indicating closer ties between the exchanges. The CFTC may act on MFGlobal-prompted client-fund protection rules, now that PFGBest has lit another fire of need underneath that agency.
John Lothian Newsletter: CFTC Votes 4-1 to Approve Swap Definition Starting Overhaul; MF Global Redux As Iowa Broker Hid Missing Millions For Years; China Opens Door To Foreign Hedge Funds
The CFTC votes to approve swaps definitions, opening the door to the start of regulatory overhaul for derivatives products. Evidence suggests that the leader of failed brokerage PFGBest used complex and sophisticated schemes such as a post office box to confound and fool regulators for years. China announces that foreign hedge funds are now allowed to seek domestic funds. In First Read, you’ll find more commentary from John Lothian and others on PFGBest; and an interview with Charlotte Crosswell of NASDAQ OMX NLX. Inside, you’ll also find a special section with a roundup of the latest stories on PFGBest.
John Lothian Newsletter: SEC finalizes derivative definition rules; LME shareholders to vote on Hong Kong sale on July 25; Fed knew of Libor issue in 2007-08, proposed reforms
The SEC creates final versions of definitions to use to regulate various Dodd-Frank-covered products. London Metal Exchange has set a date this month to vote on whether to be acquired by HKEx. The ongoing LIBOR scandal investigation produces evidence suggesting that the US Federal Reserve knew as early as 2007 that something was fishy with the way rates were being set. In First Read today, get an update on the Peregrine/PFGBest situation, including comments from John Lothian asking some good initial questions about why pre-MF Global evidence of trouble did not prompt regulatory action. Also, make sure you take a…
John Lothian Newsletter: TSE bid for domestic rival on knife edge; JPMorgan Shuts Europe Money Market Funds on ECB Rate Cut; Barclays Sued by Investor Over Alleged Euribor Actions
The Tokyo-Osaka exchange merger continues to hang in the balance, as the recent regulatory approval is followed by shareholder demands. As European deposit rates go negative, JPMorgan Chase stops taking money market funds there, saying investors may not be able to make a profit. The first class-action lawsuit against Barclays has been filed. In First Read, John Lothian says another farewell (no, not to this newsletter) and hints at a soon-to-come hello.