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U.S. pension funds sue big banks over stock lending; Henry Hub Emerges as Natural Gas Benchmark; SEC officials’ potential conflicts John Lothian Newsletter,Newsletter

First Read Hits & Takes By JLN Staff The CBOE has informed us the speaker for the MarketsWiki Education Recruiting event for the CBOE will be Ed Tilly and/or Chris Concannon. So there you go.~JJL Our post yesterday on Asia Pacific Financial News is available HERE.~JJL It was a action packed week for the Trading Tech 300 program with NEX Group, Nuveen and Enova International offering merit badges to Chicago area Boy Scouts. The feedback from Scouts, parents and Scouting professionals has been terrific. One Scout said the NEX Group session was the “best of the best” of Trading Tech…

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…

John Lothian Newsletter: Finra Strengthens Broker Penalty Guidelines; U.S. Set to Rip Up UBS Libor Accord, Seek Conviction; Europe Likely to Recognize U.S. Clearinghouses, LSE’s Rolet Says John Lothian Newsletter,Newsletter

First Read Star-studded Robin Hood Foundation galas raise $101M By James Covert, New York Post The Robin Hood Foundation raised a jaw-dropping and record-setting $101 million at its gala Tuesday night — and now it’s bent on raising a new generation of philanthropists as well. For the first time, the Big Apple’s biggest charity hosted two additional fundraising parties alongside its annual bash at the Javits Center, with both of them aimed at the next generation of New Yorkers who want to battle poverty in their city. jlne.ws/1AWhZru ***** A record $101 million raised, but some came in nice $25…

John Lothian Newsletter: FDIC Chief Martin Gruenberg: Big Bank Failure Won’t Imperil System; Castleton joins oil trade titans with Morgan Stanley deal; Small investors focus of trading shake-up John Lothian Newsletter,Newsletter

First Read Options Industry Perspectives: Exchange Leaders Trade Viewpoints at OIC 2015 Sarah Rudolph – John Lothian News At the Options Industry Conference this year, the exchange leaders panel directly followed a presentation by Andy Nybo, head of derivatives at The Tabb Group, that offered a rather bleak look at the options industry. Total volume year-to-date was down 8.7 percent compared to a year earlier, bid-ask spreads have been getting wider, and options exchanges are finding it difficult to compete in a field of 12-going on-14 players. Given that “dark cloud” the industry appears to be under, moderator John Lothian…

Regulators’ Rebuke of ‘Living Wills’ Proves Dodd-Frank Is Working Blog,Regulation

Financial regulatory consultant Mayra Rodriguez Valladares looks at the recent Federal Reserve/FDIC rejection of the major banks’ resolution plans. The Federal Reserve Board, and especially the Federal Deposit Insurance Corp., have demonstrated exemplary leadership in their rebuke of big banks’ so-called living wills. The agencies announced earlier this month that the resolution plans of the country’s 11 largest banks were inadequate, concluding that they could not be unwound in an orderly manner without a government bailout. While many interpreted this as bad news, the good news is that these two bank regulators have taken very seriously their responsibility under the…

John Lothian Newsletter: Cotton traders welcome new futures market; CME Group fends off complaints over higher fees; FDIC Sues 16 Big Banks Over Rigging of a Key Rate John Lothian Newsletter,Newsletter

First Read Mr. Lothian Takes One for the Team After a long week in Boca Raton, FL, where we attended the annual FIA conference, John agreed to make the ultimate sacrifice and remained in south Florida for five more days in order to cover CBOE’s 30th Annual Risk Management Conference. If you have never experienced the RMC, please check out the web site at jlne.ws/1gyjtAH. The 3-day conference is a must for institutional asset managers. To rub it in a bit, John sent us a selfie of him sitting on a balcony overlooking the Gulf of Mexico as he sips…

John Lothian Newsletter: Trustees settle over MF Global assets, Top 10 (or 12) 2013 Predictions, 2013 will be a watershed for financial reform, Madoff, in Christmas Eve Letter John Lothian Newsletter,Newsletter

December 26, 2012:  We’re back after a short Christmas holiday. Today’s issue features a number of predictable prediction stories for 2013, including one from former IMF economist Simon Johnson and another from Forbes.  There is also a  break though in the bankruptcy case for MF Global customers as trustees announced a major settlement.  Also, if you missed it yesterday, take a look at the ongoing Restoring Customer Confidence series with James Gellert, who talks about rating FCMs, and our Allan Schoenberg video interview, as he explains how CME Group increasingly utilizes social media as a content distribution platform to discuss…

Third-Party Custodians: Here, Hold On To This Regulation,Video

Third-Party Custodians: Here, Hold On To This

Futures customers are still wondering just how their money can stay protected in the case of a default by their broker. While some solutions are still in the concept stage, others are available right now. Horizon Cash Management’s Michael Markowitz explains the third-party custodian model, whereby customers set up and manage excess margin at a bank outside the brokerage firm. Third-party custodial arrangements are available now and could be one way to restore customer confidence. In this video, a simple animation and interview with Markowitz help explain the third-party custodian model. Third-Party Custodian Resources Third-Party Custodian on MarketsWiki (link) Michael Markowitz…

Agencies Sign Memorandum of Understanding on Supervisory Coordination Blog,Regulation

Press release from the Board of Governors of the Federal Reserve System: Five federal supervisory agencies today released a Memorandum of Understanding (MOU) that clarifies how the agencies will coordinate their supervisory activities, consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Section 1025 of the Dodd-Frank Act requires that the Consumer Financial Protection Bureau (CFPB) and the prudential regulators–the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency–coordinate important aspects of their supervision of insured depository…