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John Lothian Newsletter: BATS’ European Arm Wins Exchange Status; SEC’s Aguilar calls for robust supervision of exchanges; LSE Said to Hire Schwieger From Merrill as Equities Head John Lothian Newsletter,Newsletter

BATS Chi-X Europe gets regulatory approval to operate as a full-fledged exchange. An SEC commissioner advances the notion that self-regulating exchanges should also be actively overseen by the SEC. The London Stock Exchange picks up a new London head of equities from BofA Merrill Lynch.

JLN Options: CBOE expects to be fined by SEC for regulatory shortcomings Newsletter,Options

Lead Stories CBOE expects to be fined by SEC for regulatory shortcomingsAnn Saphir, ReutersCBOE Holdings Inc expects to be fined as much as $10 million to resolve a probe by federal authorities into its duties as a self-policing organization.http://jlne.ws/11TeLUj Option Player’s ‘Iron Condor’ Sees Range-Bound Dow Fund  Kaitlyn Kiernan, The Wall Street JournalAs the Dow looks set to finish above 15000 for the first time, one options trader set up an “iron condor” to bet the blue-chip index would remain range bound over the next seven weeks.http://jlne.ws/15q2JYX Dow Climbs Above 15,000 on Stimulus Optimism, EarningsInyoung Hwang, BloombergU.S. stocks rose, sending the…

JLN Options: High-Frequency Trading Is ‘Basically Evil’: Munger Newsletter,Options

Lead Stories High-Frequency Trading Is ‘Basically Evil’: MungerPaul Toscano, CNBC (via Yahoo Finance)Events in Europe are a great example of bankers gone wild and you simply can’t trust them, said Warren Buffett’s right-hand man Charlie Munger.http://jlne.ws/10x8N94**Munger goes after more here than just HFT.  As regards HFT John Lothian News recently interviewed Raj Mahajan, Allston Trading CEO, who has a different take on HFT than Munger does. Go here to watch the video (not taking sides here, merely offering a counterpoint). –JB CBOE outage won’t limit listing of stock-index options: new CEOAnn Saphir, ReutersThe Chicago Board Options Exchange outage that blocked…

JLN Options: Investors Spooked Ahead of Big Data Days Look to Put Options Newsletter,Options

Lead Stories Investors Spooked Ahead of Big Data Days Look to Put Options Kaitlyn Kiernan, The Wall Street JournalWith key U.S. employment data looming Friday, a pair of central bank policy meetings this week and major stock benchmarks at record highs, options traders are getting defensive.Options traders are zeroing in on short-term contracts that protect against declines in the SPDR S&P 500 exchange-traded fund and the iShares Russell 2000 Index Fund.http://jlne.ws/12WkAST CFTC Commissioner Proposes Derivatives Transaction Fee  Jamila Trindle, The Wall Street JournalCommodity Futures Trading Commission member Bart Chilton plans Wednesday to propose a transaction fee for derivatives markets, an idea that…

John Lothian Newsletter: Nasdaq Aims to Pay Up in SEC Facebook Probe; AX trading to shut dark pool platform; SHFE Copper Volume Rises to Record as LME Competition Heats Up John Lothian Newsletter,Newsletter

A ten million dollar payment to the SEC and a promise not to use duckface pictures appears to be on the way for Nasdaq OMX for its handling of Facebook’s IPO. Dark pool operator AX Trading says it will drain the pool and possibly look for a buyer or licenser for its platform. Copper volume in Shanghai hits a new record and sounds the Horn of Competition in the general direction of the London Metal Exchange.

JLN Options: CME Group data flap shuts down regulator’s research program Newsletter,Options

Lead Stories CME Group data flap shuts down regulator’s research programSarah N. Lynch, ReutersThe world’s largest futures exchange has accused the top U.S. derivatives regulator of illegally sharing sensitive market data with outside researchers who then used the information to publish academic papers about high-frequency trading.http://jlne.ws/ZrJP0l Fake tweet erasing $136 billion shows markets still need humansLu Wang, Whitney Kisling & Eric Lam, BloombergA false report of explosions at the White House that wiped out $136 billion from the Standard & Poor’s 500 Index in about two minutes highlighted the risks of the computerized trading that dominates the $18 trillion market.http://jlne.ws/ZrK7Ew…

John Lothian Newsletter: Bats Chi-X Europe names Equiduct’s Howson COO; Andrew Ceresney Expected to Be Pick for S.E.C. Enforcement Unit; Futures regulators challenged by changing industry John Lothian Newsletter,Newsletter

Bats Chi-X Europe taps rival founder David Howson to take the COO reins. In the US, the SEC looks likely to choose Andrew Ceresney to take over from Robert Khuzami as enforcement director. Regulators, both “self” and the independent variety, struggle to find effective ways to regulate trading activity and reduce offenses. JLN’s “CBOE 40” anniversary celebration video is unveiled on CBOE’s web site.

JLN Options: ‘Fear Index’ Surging? This Chart Says It’s a Speed Bump Newsletter,Options

Lead Stories ‘Fear Index’ Surging? This Chart Says It’s a Speed BumpBrendan Conway, Barron’sThe “fear index,” which jumped 18% on Wednesday, is up 30% this month. But dig a little deeper to see the way the market prices S&P 500 (SPY) volatility has barely budged.http://jlne.ws/13kP7t6 Quantitative easing is like a ‘huge glass of warm milk’ for VIXTom Bemis, MarketWatchNicholas Colas, chief market strategist at ConvergEx, argues Wednesday that if these were normal times, the fear index would be double where it is.http://jlne.ws/XTCqai Volatility Readings Signaling Systemic Changes for Stock, Gold, FX?John Kicklighter, Daily FXVolatility is used by many as a…

John Lothian Newsletter: Bloomberg Sues CFTC Over Swap Collateral Rules; Money Funds Are Likely to Face Rule Changes; Brokers lose index CDS volumes to new Tradeweb platform John Lothian Newsletter,Newsletter

Bloomberg LP takes on the CFTC over collateral requirements for swaps, saying the decision to make rates higher for swaps than for comparable futures is arbitrary and unfair. The SEC moves closer to issuing new controls for the money market fund industry. The vast majority of volume in index credit-default swaps has drained out of the broker market and into Tradeweb’s new electronic platform set up for that purpose.