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ETFs Create Stock Markets That Are Both Mindless and Too Expensive, Study Says; Equity derivatives no longer dominate derivatives trade; One Very Big Strike Against Active Management John Lothian Newsletter,Newsletter

First Read Bits & Pieces By John J. Lothian Healing wishes are in order for Cinnober Executive Chairman Nils-Robert Persson, who joined the club by undergoing knee replacement surgery. No word on whether he used a Nasdaq listed company’s joint hardware for the surgery. My presentation and panel for the Chicago Civic Federation at the Federal Reserve went well yesterday, though I could have been a lot sharper. The feedback was good, but my own grading was not high for my performance. I did learn a lot about government bankruptcy and the challenges faced by the City of Chicago and…

A Difference Maker: Post-trade Clearing Tech Now a Differentiator For Firms Blog,Commentary,Feature,Tech / HFT

If today’s markets are traded in milliseconds, why can’t post-trade clearing keep up? ION is addressing that with its XTP clearing solution, a near real-time system it has quietly been rolling out since 2015. Last year the product was adopted by a handful of firms. And this year, ION is hoping to see a larger migration of customers to the new platform, which is considered a major upgrade to its Rolfe & Nolan system. It took ION four years to build the system, creating it on top of ION’s core trading technology. The low-profile firm is stepping out a bit…

Deutsche Bank walks away from US swaps clearing; Soc Gen sees fixed income trading boom; Crunch time for increasingly brittle London Metal Exchange John Lothian Newsletter,Newsletter

First Read Trump Preparing to Nominate Commodity Futures Trading Commission’s Giancarlo as Chair; The former brokerage executive is currently serving as acting chairman Andrew Ackerman – WSJ The Trump administration is preparing to nominate J. Christopher Giancarlo as chairman of the Commodity Futures Trading Commission, according to people familiar with the matter, elevating the former brokerage executive to the full-time head of the top U.S. derivatives regulator. /goo.gl/XFy2Wg ***** This would be a terrific outcome. Acting Chairman Giancarlo is widely respected and very knowledgeable. All we need now is some other commissioners. ++++ Nasdaq’s Black Belt CEO on IPOs, Unicorns,…

Market Calm Back as Short-Term Volatility Falls Most Ever; OCC News; Post-Trump About-Face Triggers 2 Rare S&P Signals Newsletter,Options

Observations & Insight 2016 Could Be The Year Of The CEO By Jim Kharouf, JLN Editor-in-Chief Forget the Chinese New Year plunge, Brexit, The Donald or even the Cubs. This is also shaping up as the year of the new CEO, with exchanges and clearinghouses especially, in moves that could reshape our markets in the coming years. The two biggest CEO changes came within days of each other, with Terry Duffy taking the reins as CEO at CME Group from Phupinder Gill and Adena Friedman at Nasdaq, taking over from longtime CEO Robert Greifeld at the start of 2017. They…

Oil Options Traders Buy Record Bullish Contracts Amid OPEC Moves; Options Back in Vogue as Uncertainty Permeates Global Markets; SEC Approves Consolidated Audit Trail to Detect Market Manipulation Newsletter,Options

Lead Stories Oil Options Traders Buy Record Bullish Contracts Amid OPEC Moves Javier Blas, John Deane and Brian Wingfield – Bloomberg Oil investors traded a record number of bullish options contracts for benchmark U.S. crude, a signal that the market is positioning for a potential OPEC deal to limit production and boost prices. The total volume of calls giving investors the right purchase West Texas Intermediate crude rose to the equivalent of 303 million barrels on Tuesday, according to preliminary CME Group Inc. data compiled by Bloomberg. That far exceeded a prior record of 221 million, set five and a…

A Basel netting issue: Pushing for less burdensome capital requirements in the options market Exchanges, OTC & Clearing,Feature,Mwiki,Options,Regulation,Regulation & Enforcement

The unintended consequences of financial regulation have been seeping into the markets since the first rule was made in the wake of the financial crisis. One prime example is the leverage ratio, which determines the required capital of general clearing members. The actual calculation of the capital requirement within the Basel III leverage ratio framework is a particular sticking point for the OCC. Right now, the Current Exposure Method (CEM) is used in the calculation, whereas the OCC and a wide swath of industry participants believe that the Standardised Approach for Counterparty Credit Risk (SA-CCR) would better encapsulate the nature…

Impact: Navigating Regulation and What Comes Next, Part 2 Feature,Interview,Mwiki,Video,video

At FIA Expo 2016, JLN spoke with a variety of participants in today’s markets about the ongoing effects of regulation and what those mean for the future of their businesses.   In Part 2 of our three-part series, Gary DeWaal, special counsel with Katten Muchin Rosenman LLP; Matthew Chamberlain, head of business development for LME; John Avery, director of client and industry engagement, Derivatives Utility at FIS; and Rob D’Arco, CEO of Rival Systems, share their take on topics like the challenges facing swaps dealers, the pace of regulation and the rising cost of compliance.

Impact: Navigating Regulation and What Comes Next, Part 1 Exchanges, OTC & Clearing,Feature,Fintech,Mwiki,Regulation & Enforcement,Video,video

At FIA Expo 2016, JLN spoke with a variety of participants in today’s markets about the ongoing effects of regulation and what those mean for the future of their businesses.   In Part 1 of our three-part series, Phupinder Gill, CEO of CME Group; Drew Shields, CTO of Trading Technologies; Dave Snowdon, co-founder, director and CTO of Metamako; and Hazem Dawani, president and CEO of OptionsCity, provide their thoughts on subjects ranging from issues with MiFID II clock synchronization to the shifting clearing landscape.  

John Lothian Newsletter: Peak Finance Looks Like It’s Over; Banks Lead Charge to Adopt AI for Business; U.S. to expand rules for ‘too-big-to-fail’ clearing houses John Lothian Newsletter,Newsletter

First Read Invest in the Future; Trading Tech Awards Event to Launch Merit Badge Workshop Program Expansion By John Lothian Trading Tech Awards Event – Register Here For 45 years the financial community of Chicago has been supporting the Boy Scouts of America with an event that used to be held right on LaSalle Street under a big circus tent in front of the U.S. Federal Reserve Building. The event was the LaSalle Street Dinner. It still exists, but in a different form. In the past, leaders from the financial community, prominent bankers, brokers, clearinghouse executives and exchange leaders served…