Germany reveals cabinet plans to approve a draft law today that tightens up controls for high-frequency trading. Ukraine and CME Group discuss the possibility of launching new agricultural products for trading. Nasdaq OMX’s European head of product management has elected to step down and start a new consulting firm. In First Read today, take a look at the details for Rocktoberfest New York & Chicago, a charity event that features hot music to help people gain mobility. Also, you’ve got one more chance to take a look at JLN’s three most recent interviews: Steven Crutchfield of NYSE Euronext; Ryan McElvogue…
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: Chicago exchange gets investments from State Street, Fidelity unit; Gensler Calls for Overhaul of Libor; Nordic Banks Gain New Status: Haven
Chicago’s new Eris Exchange gets backing from State Street and Fidelity. Gary Gensler of the CFTC tells the EU parliament that they should either rework LIBOR, or just throw it away and start over. Banks in Sweden and Norway, relatively unharmed by financial crises and shocks shaking the rest of the world, strive to keep up with increasing foreign inflows as investors seek safe havens for their money.
John Lothian Newsletter: Managers Take A Timeout From Stocks; Senate JPMorgan Probe Said To Seek Tougher Volcker Rule; London Regulation Pushes Debt Deals Away
Even though the year’s not nearly over, investment managers are thinking about their current track record and wondering if they’re in a position to halt trading already for the year. The U.S. Senate’s committee investigating JPMorgan’s “whale” loss is expected to present its findings in the hope of toughening up the Volcker Rule. Regulatory arbitrage surfaces in London, as debt issuers look overseas to countries with less strict rule interpretations. In today’s First Read, you’ll find two new MarketsWiki.tv interviews: one with Ryan McElvogue of FFastFill, discussing regulatory and operational risk; and Steven Crutchfield, new CEO of NYSE Amex Options…
John Lothian Newsletter: Futures group Offers Risk Guidelines; In Calls Ior Market Reform, Multiple Voices; U.S. Seeks to Boost Laundering Net
The FOA releases new technical guidelines for mitigating damage from errant electronic trading events; three major exchanges step up and agree to test out the new rules. Political and professional events add traction and area-of-effect to calls for various kinds of financial reform. US regulators want to enlist financial firms and others to join in the fight to ferret out and stop money laundering.
John Lothian Newsletter: Regulators Try To Beat Clock In Rate Probe; Nasdaq Disputes Assertion That Facebook Fund Too Small; Ex-CME Programmer Pleads Guilty To Trade Secret Theft
The ticking clock is causing U.S. prosecutors to ask for more time in their interest rate-fixing investigations, while the target banks are hoping to hurry the process to minimize risk and damage. Nasdaq, responding to criticism that its Facebook Fail Fund is too small, says that in fact, it’s just exactly the right size given its own view of its liability in the matter. An ex-CME employee pleads guilty to stealing secrets from the exchange in a bid to start a rival. It’s Interview Day in First Read: see Jim Kharouf’s talk with Adam Sheldon of Bionic Trader Systems about…
John Lothian Newsletter: CME To Introduce Futures That Deliver Swaps; LSE makes play for collateral management market; Fed warns high-frequency trading firms
CME Group announces new deliverable interest-rate swap futures contracts. The London Stock Exchange plans to begin offering collateral management services from its Monte Titoli settlement house in Italy. The Chicago Fed warns that the majority of algo traders and trading venues are relying on “others” to handle exceptions and errors in order flow.
John Lothian Newsletter: Australian Exchange Chief Criticises HFT; Money-Laundering Inquiry Said To Target U.S. Banks; ASEAN Link Lures Retail Investors To Boost Trade
The leader of Australia’s ASX says high-frequency trading is inherently dangerous, and he doesn’t much fancy the exchange model of depending on its high-volume presence for survival. A money-laundering probe is taking shape in multiple agencies, targeting a number of American banks that may have allowed sloppy money controls to help criminal enterprises hide their cash. The ASEAN link between Malaysia and SGX goes live today, raising hopes of better trade in that region from the network.
John Lothian Newsletter: ICE push into Europe with Dutch purchase; Exchanges Face SEC Scrutiny on New Products; Nasdaq pushes into post-trade monitoring
IntercontinentalExchange hops on the bus to Europe, preparing to take a majority interest in a Dutch energy exchange. The SEC begins to target and investigate exchanges and the way that high-frequency trading customers and processes are handled relative to the rest of the trading population. As brokers search for better ways to manage trade risk, Nasdaq signals its entry into the post-trade risk arena.
John Lothian Newsletter: ICE Traders Held Talks With CME; ECB’s Nowotny Calls For High-Frequency Trade Ban; Spanish Regulators Clear LSE-LCH Deal
Soft commodity traders of ICE Futures U.S. contracts are said to have discussed the possibility of shifting their trades to rival exchange CME Group, if the CME were to offer similar products. In Europe, central banker Ewald Nowotny says it’s time to outlaw high-frequency trading; no word on whether less-frequent trading algorithms would be allowed, or how one is supposed to establish a threshold for discerning between the two. In London, LSE’s goal of taking a controlling stake in clearinghouse LCH.Clearnet takes one step forward as antitrust regulators in Spain give a thumbs-up.