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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: FSA Pressures Banks to Hand Over MF Global’s U.K. Client Money; Eris Exchange to Distribute Market Data Through CME Group; Volcker Rule Regulators Resist Lawmakers Calls to Scrap Proposal Standard

Britain’s FSA steps harder on the feet of banks in an attempt to get them to release customer money following MF Global’s demise.  Eris Exchange reaches an agreement to distribute its SwapBook data via CME Group’s Market Data Platform.  Despite calls to just throw away the Volcker Rule and start over, or not at all, regulators working on the issue insist that in the end, they’ll have a viable solution using what they’ve already got so far.  In today’s top box, JLN’s Nicole Rohr supplies a Five Minutes interview with Alice Botis of Fidessa; and Hernan Arellano and Felipe Gazitúa…

John Lothian Newsletter: MF Global Commodity Customers Must Be Paid First, CFTC Says; SEC Charges Fund Managers and Analysts in Insider Trading Scheme; IMF requests $500bn for bail-out loans Standard

The CFTC says that MF Global’s trustee has made rookie errors about bankruptcy payouts, and that the ex-brokerage’s customers are first in line for payback.  The SEC continues its insider-trading cleanup program by arresting fund managers and analysts, and leveling new charges in some cases at the firms themselves.  The IMF, looking over the European crisis, asks for more capital in order to weather rough financial seas ahead.

John Lothian Newsletter: Deutsche Boerse CEO says consolidation is inevitable; S&P Gets No Respect in Market With Lower Yields After Downgrades; World Bank warns emerging nations Standard

DB’s Reto Franconi says that even if the DB-NYSE merger fails, he’ll still be looking for ways to merge his exchange with others.  S&P’s downgrades of various countries, banks and funds creates a lot of attention, but not much immediate reaction from investors.  The World Bank sounds a grim note to emerging nations, warning them to prepare for financial trouble if the European crisis continues to worsen.  In the top box today, double commentary:  one from Doug Ashburn of JLN FX on Mario Draghi; and one from Jim Kharouf of JLN Managed Futures on the state of the managed futures…

John Lothian Newsletter: MF Global trustee warns of pay-out shortfall; SEC, Exchange Officials Meet On Market Supervision; NYSE says no more concessions for Deutsche Boerse merger Standard

MF Global’s bankruptcy trustee warns that it may not be able to fully reimburse 100% of the amount that customers are missing. The “flash crash” fallout continues as the SEC steps up enforcement actions and gag orders against exchanges. NYSE Euronext deputy chief executive Dominique Cerutti claims the exchange won’t make any further concessions to gain approval from EU regulators of their merger with Deutsche Boerse. And NYSE Liffe U.S. is named ‘Exchange Of The Year’ By Risk Magazine.

John Lothian Newsletter: NYSE CEO: EU Antitrust Review ‘Fundamentally Flawed’; ICE appoints LME member JP Morgan to advise on potential LME bid; New Rules on Swaps Will Protect Big Traders Standard

Reaction to the recommended rejection of the DB-NYSE merger is loud and varied, including one from the NYSE Euronext CEO that the regulatory review was just plain bad. ICE hires JP Morgan to help them work on a bid for the London Metals Exchange, which is also in today’s news for record-breaking volume announcements, and a quarrel over whether dramatically raising fees right before being acquired is a smart decision. The CFTC yesterday voted to pass rules and proposals regulating swaps, though despite publicity and buzz regarding MF Global, the new rule does not appear to address that type of…

John Lothian Newsletter: Europe set to block DB-NYSE tie-up; Citi chief urges risk disclosure shake-up; Hedge funds lock horns with IMF on Greek debt Standard

Early reports suggest that European regulators are preparing to reject the DB-NYSE merger.  Vikram Pandit of Citigroup suggests that banks should explain the methods used to evaluate risk, providing more insight into the degree of optimism present in bank self-evaluations. Hedge funds involved with Greek debt add their name to the IMF’s “bailout complications” list. And in regulation, the CFTC prepares to vote on Dodd-Frank rules from last year; while other agencies consider including clearing houses, insurers and other types of firms to in “too big to fail” considerations that were once applied just to banks.

John Lothian Newsletter: SEC wants banks to say more on European debt exposure; U.S. Inquiry of MF Global Gains Speed; LME’s steel plans tarnished by MF Global Standard

The SEC is pushing banks to provide more data on their exposure to European sovereign debt, on the off-chance that they are swimming with the same sharks that ate MF Global.  Speaking of MF Global, regulators report progress in the “where did the money go” investigation; and (speaking of swimming) the London Metals Exchange find itself in a drained pool, its hopes of forging a steel benchmark futures contract at odds with dramatically lower volume with major player MF Global gone.  In the USA, Walter Lukken has been chosen to lead the Futures Industry Association; and JLN’s Jon Matte is…

John Lothian Newsletter: Global regulators signal leeway on new bank liquidity rules; Mexico’s BMV to be among fastest bourses by May; Wall Street Prepares to Take Sharp Pay Cut Standard

An international regulatory group, while making tough plans for bank liquidity requirements, are also finding time to plan out exceptions to those new rules. Exchange operator BMV proceeds apace with infrastructure upgrades that will make the Mexican exchange one of the fastest in the world. As Q4 earnings, or lack thereof, are tallied for financial firms, a number of those firms are signaling that bonuses may be paid out closer to earth than the stratosphere this year. In Europe, David Cameron continues to declare his opposition to (and willingness to sabotage) a new financial transaction tax. And under pressure from…

John Lothian Newsletter: SEC Blesses CBOE Stock Exchange’s Deal For National Stock Exchange; Fed Forecasts Pose Risk For Soft Interest-Rate Futures Volume; European Banks Prepare More Job Cuts Standard

The U.S. SEC gives a thumbs-up to CBOE Stock Exchange’s plan to take over the National Stock Exchange.  The Federal Reserve’s plan to make an advance timetable for its actions is creating concern that without uncertainty from meeting to meeting, trade in interest-rate futures will suffer.  In Europe, more banks are preparing to shed more jobs; and Hungary, after failing to raise enough money on its own, is now interested in an IMF loan to help pay its bills. Today’s top box contains an article by JLN editor Sarah Rudolph on the CBOE BuyWrite Index.