December 28, 2012: Hedge fund inflows outstrip 2011; ICE mulls change to cotton registration process; Finra Fines Five Banks Including Citigroup, Goldman on Lobbying

Source: John Lothian Newsletter

Despite another rough year in 2012, investments in hedge funds this year topped the levels achieved in 2011. ICE delays the listing of 2015 cotton futures contracts as it reviews the process for registering the commodity for delivery. FINRA takes aim at several large US banks, fining them for using off-limits bond funds to pay [...]

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December 27, 2012: London Stock Exchange Revises Offer for Clearinghouse; Knight gets a key nod; A Banner Year for Riskiest Debt

Source: John Lothian Newsletter

As expected, the London Stock Exchange has downshifted its offer for clearing house LCH.Clearnet. TD Ameritrade, a major shareholder in Knight Capital, gives a key thumbs-up to the takeover deal by GETCO. Risk was alive, well, and in some cases handing out big rewards in 2012, as the junk bond market paid off well for [...]

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December 26, 2012: 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

Source: John Lothian 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 [...]

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December 21, 2012: SEC’s Khuzami Said to Leave Agency; Rivals Could Study Euronext Bids if IPO Plan Doesn’t Materialize; Morgan Stanley Stake in Eris Exchange Spotlights Market Shift

Source: John Lothian Newsletter

The SEC’s Robert Khuzami is said to be planning his exit in the near future; possibly as early as next month. Exchanges owned by NYSE Euronext in Europe could attract interest from local rivals as part of the industry shift related to the N-ICE merger. Morgan Stanley takes a stake in Eris Exchange, as standardized [...]

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December 20, 2012: IntercontinentalExchange to Acquire NYSE Owner for $8.2 Billion; CFTC agrees more delays to reforms; Getco maps out post-Knight crusade

Source: John Lothian Newsletter

ICE and NYSE Euronext have agreed to a merger deal. The CFTC is distributing delays and no-action letters to freshly-regulated dealers as industry participants struggle to gain compliance with new regulations. Getco outlines its future after its intended acquisition of Knight is completed. In First Read today, John Lothian and Jim Kharouf discuss the new [...]

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December 19, 2012: NYSE exec says exchanges moving closer to “kill switch”; LSE Said to Cut LCH.Clearnet Bid by 30pct; Knight Takes Higher Price in Getco Sacrificing Virtu Cash

Source: John Lothian Newsletter

A NYSE official says that regulators and exchanges are nearing agreement on how to implement a shutdown mechanism for runaway trading software. Following a requirement for LCH.Clearnet to significantly increase its capital, London Stock Exchange has reduced its acquisition bid. Broker Knight Capital evaluates suitors and selects Getco’s bid for acquisition. In First Read today, [...]

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December 18, 2012: NYSE says regulation hits retail investors; Australia Fund Managers Back Tax on High-Frequency Trading Firms; Regulators Seek Court Ruling Against Peregrine

Source: John Lothian Newsletter

NYSE prepares to tell Congress that current market rules give professional traders an advantage over retail investors, and that the regulatory structure must change in order to fix the disparity. In Australia, some fund managers are pushing for the imposition of a tax on high-frequency traders that flood the market with orders. The CFTC heads [...]

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December 17, 2012: Six buys Oslo Clearing for $32m; Chile’s BEC set to list Nasdaq stocks; BoE’s Haldane says technology may trigger UK banking revolution

Source: John Lothian Newsletter

Swiss exchange operator SIX Group reaches out to buy Norwegian clearing house Oslo Clearing, giving it access to clearing operations as regulatory change increases the importance of that sector. Nasdaq OMX is set to activate a year-old listing agreement with Chilean exchange BEC. Bank of England’s Andrew Haldane suggests that a banking revolution may shortly [...]

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December 14, 2012: UK clears LSE bid for LCH.Clearnet; China may open crude futures to foreign investors; Nasdaq’s NLX hires compliance director

Source: John Lothian Newsletter

UK antitrust regulators give a green light to the London Stock Exchange’s bid to take a controlling interest in clearing house LCH.Clearnet. China is nearing approval for a Shanghai-based crude oil futures contract that could be accessed by offshore traders without a local subsidiary. Nasdaq’s new European trading platform NLX hires a compliance director. In [...]

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December 13, 2012: CFTC temporarily narrowing US persons definition for swaps; EU Deal Reached on Bank Supervisor; Thomson Reuters seeks to run new Libor

Source: John Lothian Newsletter

The CFTC agrees to back away from setting global swap rules, and will (so far) temporarily redefine new regulations to target US participants. After months of noise and other things commonly associated with elephants, the EU arrives at an agreementto consolidate eurozone banking control (mostly) under a single supervisor. Thomson Reuters joins the LIBOR Derby [...]

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December 12, 2012: CBOE Holdings Announces Leadership Changes; Nasdaq closes in on Thomson Reuters unit; LCH.Clearnet Plans Clearing Tie-Up With Aussie Banks

Source: John Lothian Newsletter

CBOE Holdings announces that William Brodsky will step down as CEO after the company’s May 2013 annual meeting. Nasdaq OMX gets closer to the finish line with its plans to acquire the corporate services unit of Thomson Reuters. LCH.Clearnet applies to begin offering interest-rate swap clearing to banks in Australia, beginning in early 2013. First [...]

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December 11, 2012: Nasdaq OMX targets European derivatives trades; HSBC to pay record $1.9 billion fine in money laundering case; US audit trail cost forecast criticised

Source: John Lothian Newsletter

Nasdaq OMX takes a 25 percent stake in European trading platform The Order Machine. HSBC bank agrees to pay a whopper of a fine for laundering money. Tom Kloet of Canada’s TMX exchange group reacts with disbelief at the US cost estimates for creating a real-time market surveillance system. In today’s First Read section, see [...]

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December 10, 2012: India Options Trade Grows Fastest in World; New clearing rules spell stark choice over hedging strategies; Korea gears up for OTC clearing

Source: John Lothian Newsletter

India’s options market is growing at the fastest pace in the world, bringing a much-needed piece of good news to a region still trying to recover from the global financial crisis. New swaps regulation for central counterparty clearing puts pressure on hedge investors to either greatly increase collateral or switch to higher-risk products. And speaking [...]

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December 7, 2012: SEC to Lift Ban on Actively Run ETFs Using Derivatives; BSE eyes IPO next year, seeks $1 billion value; More Hedge Funds Shut Down

Source: John Lothian Newsletter

The SEC will switch off its ban on actively-managed ETFs that emphasize derivatives use. The operator of the Bombay Stock Exchange plans for a 2013 IPO. Several hedge funds, facing high levels of redemption, announce their intention to shut down in the near future. In First Read today, there’s another chance to watch our new [...]

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December 6, 2012: NYSE Euronext announces proposed pan-European project for SMEs; Eris Exchange to Offer Rate-Swap Future With Margin to Match CME; S&P warns over outlook for exchanges

Source: John Lothian Newsletter

NYSE Euronext starts the clock on the creation of a new Europe-wide exchange targeted at small and medium sized companies. Eris Exchange plans to cut a large chunk of its interest-rate swap contract margin requirements to better compete with rival CME Group. Standard & Poor’s notes that volume in the exchange sector has been a [...]

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December 5, 2012: Miami Options Exchange Gets SEC Approval; Eurex Exchange launches derivatives trading system; Interest-Rate Swap Futures Surpass $130 Million at CME Group

Source: John Lothian Newsletter

New options exchange MIAX gets a green light from the SEC, and will be able to open its doors as planned on December 7. Eurex Exchange launches the next generation of its derivatives trading system, beginning the months-long process of migrating its offerings onto the new platform. CME Group’s new interest rate swap futures contracts [...]

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December 4, 2012: S.E.C. Charges 5 Firms Over Audits in China; NYSE Liffe readies for OTC shake-up; Exchanges to Ask SEC to Delay Deadline for Audit Trail Program

Source: John Lothian Newsletter

The SEC takes aim at Chinese accounting firms affiliated with big US auditors, who are said to be uncooperative with the SEC in investigating firms. NYSE Liffe aligns itself with a derivatives overhaul, and prepares to allow certain block trades to be done OTC style. US market operators intend to ask the SEC for more [...]

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December 3, 2012: New Swaps-Trading Venue, KerbX, in the Works; Wall Street finds a foreign detour around U.S. derivatives rules; Bats chief calls on EC to ‘take on’ data pricing

Source: John Lothian Newsletter

A new off-exchange derivatives trading platform is under construction, possibly with the goal of registering as a new Dodd-Frank-inspired swap execution facility. Some US banks, facing stricter derivatives regulation when dealing with foreign customers, are gearing up to continue trading old-style by using foreign affiliate companies for handling transactions. The head of BATS in Europe [...]

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