First Read
Un Parti Québécois: ISDA 2015 Montreal
by Doug Ashburn – JLN
The International Swaps and Derivatives Association descends on Montreal, Quebec this week for its annual meeting and conference. Ahead of the conference, I caught up with ISDA CEO and former CFTC Commissioner Scott O’Malia, who offered up a preview of the conference and a highlight of the issues the swaps world is grappling with.
“The big issue is cross-border harmonization,” says O’ Malia. “I left the commission in the middle of the cross-border debate and came over to ISDA, and now it is all about implementation and coordination of the European and U.S. rules.” He looks at the objectives set out by the G-20 in the early days of the financial crisis (the 2009 “Pittsburgh Summit”), and notes the results have deviated from those early initiatives.
“We have not had a substituted compliance determination (between the U.S. and Europe) in two years.”
As the head of an international organization that must respect all sides of this particular issue, O’Malia looks to be caught in the middle of the dispute between U.S. and European regulators. “It’s like being a daisy at an elephant dance, standing between the U.S. and Europe,” he says. One concern among regulators is mutual recognition of central counterparties, which is ironic, as it means swaps reform is being held up by a futures issue.
Story Continued: http://jlne.ws/1K4DxYl
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Mystery Trader Armed With Algorithms Rewrites Flash Crash
by Silla Brush, Tom Schoenberg, Bloomberg
From a modest stucco house in suburban west London, where jetliners roar overhead on their approach to Heathrow Airport, a small-time trader was about to play a hand in one of the most harrowing moments in Wall Street history.
jlne.ws/1Jtyj7B
***** I live in a stucco house in west suburban Chicago, where jetliners roar overhead on their approach to O’Hare. Strange but true.
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How futures trading could crash stocks
Michael Mackenzie, FT
The US equity market ‘flash crash’ of May 6 2010 has long highlighted the pronounced link between futures exchange contracts and the share prices of companies bought and sold by investors of all stripes.
jlne.ws/1DMMLGz
***** “Could” is the operative word here.
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Saving Trader Sarao
Paul Murphy, FT Alphaville.
Picture the scene in the London borough of Hounslow on Tuesday lunchtime, as police moved in to arrest one Navinder Singh Sarao, holed up in a humble end-of-terrace.
jlne.ws/1G6jFQP
***** Paul Murphy does not believe the case against Mr. Sarao and plays the nationalistic card. Really, Paul?
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The Criminal Complaint in the UK Trader Flash Crash story
Department of Justice
jlne.ws/1K4rQ3M
***** I have pulled these statements and facts from this above complaint.
***** One day, Sarao modified a total of approximately 7.4 million lots – about 42% of all modification volume in the market that day.
***** On the day of the flash crash, Sarao modified more than 20 million lots, whereas the rest of the market combined modified fewer than 19 mln
***** On May 5, during the dynamic layering cycle that ran from 11:17 am-1:40
pm, Sarao’s offers were 20-29% of the CME’s entire E-Mini sell-side order book
***** On the trading days described in this affidavit, Sarao made approximately $8.9 million trading E-Minis.
*****Overall, between 2010 and 2014, Sarao made approximately $40 million trading E-Minis.
******In late April 2010, Sarao established a new entity, Nav Sarao Milking Markets Limited
****** It should not have taken five years for this to come out. The statistics above should have been a red flag, a bright red flag that someone at the FCM, exchange, ISV or risk manager somewhere should have seen and reported. The commission that looked into the Flash Crash should have been given these statistics or asked for them.
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The Top 100 People To Follow On Twitter For Financial News
Druce Vertes , StreetEYE via Benzinga
A couple of days ago we posted Mapping the Financial / Media Twittersphere, an illustration of the Twitter accounts that are most central for financial news. A network centrality analysis, ie finding the people who have the most followers and the most influential followers, is a good starting point if you want to find the stories that are generating the most traction in social media and in the markets.
1. @FGoria
2. @JohnLothian
jlne.ws/1yRTtfK
***** The last time they did this ranking I was not even on the list. @FGoria and I have been neck and neck, back and forth in the number one slot for the last few weeks. Since I took over the search function for JLN again in November, I have been very actively tweeting the stories I find.
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Reconcilable Differences: Duco’s Christian Nentwich on what can be done to address reconciliation problems in the financial industry
JohnLothianNews.com
Today, trades occur in milliseconds around the globe. But there are still aspects of the business that lag behind, especially in the post trade area. Christian Nentwich, CEO and co-founder of tech firm Duco, estimates there is more than $500 million in unreconciled fees in the brokerage space. Here is how his firm is attempting to address the reconciliation problem.
Watch the video »
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Lead Stories
UK trader arrested over 2010 flash crash
Philip Stafford in London and Gina Chon in Washington, FT
A UK futures trader operating out of a suburban house under the approach path to Heathrow airport is due in a London court on Wednesday after being charged by US authorities for allegedly contributing to the 2010 “flash crash”, which saw the Dow Jones Industrial Average plunge more than 600 points in a matter of minutes.
jlne.ws/1HUgyQp
‘Flash crash’ arrest puts heat on futures market
Nicole Bullock in New York, Gina Chon in Washington, Philip Stafford and Michael Mackenzie in London, FT
When it comes to trading US equities, the solitary trader sitting at home has never been a match for a market dominated by powerhouse institutional investors and sophisticated computer systems.
jlne.ws/1Htk7fY
‘Flash crash’ market manipulation case poses test for prosecutors
BY DAVID INGRAM, Reuters
Charges against a high-frequency trader for helping to spark the 2010 “flash crash” present a test of U.S. prosecutors’ ability to win a big market manipulation case and may make other traders nervous they may be next, lawyers said on Tuesday.
jlne.ws/1HkfhTN
UK trader accused of ‘flash crash’ role opposes extradition to U.S.
Reuters
Navinder Singh Sarao, a trader accused by U.S. authorities of an illegal role in the “flash crash” that briefly wiped out nearly $1 trillion in market value in May 2010, told a London court on Wednesday he opposed being extradited to the United States.
jlne.ws/1DMQnYZ
The Flash Crash: What We Knew and What We Learned Tuesday
By MAUREEN FARRELL
Nearly five years after the May 6, 2010 “flash crash” — during which the Dow Jones Industrial Average suddenly plunged 1,000 points before recovering — another key player has emerged, recasting the picture of exactly what happened that day. On Tuesday, the U.S. Commodity Futures Trading Commission and the U.S. Justice Department revealed that Savinder Sarao faces charges for his role in the flash crash and for allegedly manipulating markets over several years.
jlne.ws/1GhIJ9U
CQG to Connect to Nasdaq Futures
By CQG
Direct Market Access to Nasdaq Futures Platform Offers Global Trading Access to New Suite of Futures based on Key Energy Benchmarks
CQG, Inc., a global provider of trade routing, market data, and advanced technical analysis, and Nasdaq today announced that CQG will introduce connectivity to Nasdaq Futures, Inc. (NFX), the exchange group’s U.S.-based designated contract market (DCM). Through NFX, Nasdaq will expand its commodities business with futures and options on key energy benchmarks including oil, natural gas and U.S. power, which will launch in mid-2015.
jlne.ws/1ErFiAf
BATS fears rule would create unfair competition in options markets
www.bizjournals.com
BATS Global Markets Inc. is waging a battle to stop a new rule proposed to the Securities and Exchange Commission, saying it would create an unfair advantage for legacy options exchanges at the expense of newer options traders like BATS.
The Options Clearing Corp. (OCC) is the entity trying to enact the change in rules with the SEC. The new rule would allow the OCC to raise additional capital to stay in compliance with new regulatory standards and create a “business risk buffer” to handle times of crisis. BATS agrees that the OCC needs to raise money, but the company argues against the way it plans to raise that money.
jlne.ws/1yO6s1Q
ISDA Launches IQ: ISDA Quarterly
ISDA
The International Swaps and Derivatives Association, Inc. (ISDA) today unveiled IQ: ISDA Quarterly, the new official ISDA magazine that highlights the challenges and opportunities in the dynamic and global derivatives market. The magazine comes on the eve of ISDA’s 30th Annual General Meeting in Montreal.
jlne.ws/1aRBH0i
Merrill Lynch fined $19.8 million by U.K. watchdog
By Karen Friar, MarketWatch
Merrill Lynch International has been fined £13.2 million ($19.8 million) over incorrect reporting of transactions, the U.K.’s financial watchdog said Wednesday. The size of the penalty “reflects the severity of MLI’s misconduct, failure to adequately address the root causes over several years despite substantial FCA guidance to the industry, and a poor history of transaction-reporting compliance”, the Financial Conduct Authority said in a statement. The FCA said it applied a higher level of penalty per line of data in calculating the amount as “past fines have not been high enough to achieve credible deterrence”. MLI, which was found to have incorrectly reported more than 35 million transactions, received a reduction in its penalty by agreeing to settle at an early stage of the FCA’s investigation. Merrill Lynch is owned by Bank of America Corp.
jlne.ws/1biqxlG
UK speed trader arrested over role in 2010 ‘flash crash’
BY DOUWE MIEDEMA AND SARAH N. LYNCH, Reuters
A high-frequency trader was arrested in London over his alleged role in the May 2010 “flash crash” that briefly wiped out nearly $1 trillion in market value, the first time authorities have blamed manipulation for the turbulence.
jlne.ws/1DJNica
Hounslow neighbours saw nothing flashy
Aliya Ram and Philip Stafford in London, FT
US authorities probing the “flash crash” that rattled global stocks in 2010 have spent years trying to understand the factors behind the sudden US market plunge. On Tuesday they zeroed in on an unassuming interwar house in the suburban heart of a working class Indian and Bangladeshi community 17 miles west of the City, London’s financial heart.
jlne.ws/1FdIazi
The CFTC’s alleged flash crasher
FT Alphaville
jlne.ws/1K4qHJD
March 2015 SEF Review – Bloomberg Out in Front
Chris Barnes, Clarus Financial Technology via Tabb Forum
Record US swap volume was reported to the SDRs in March. But more than 14% of SEF volumes were related to compression list trading, which can artificially inflate the picture of ‘real’ liquidity out there. So which venues have the truest liquidity, in the old-school sense of the word?
jlne.ws/1ErIITw
U.S. regulator wants better deposit data from big banks
BY DOUWE MIEDEMA, Reuters
The largest U.S. and foreign banks would need to keep track of deposits better under a plan launched by the Federal Deposit Insurance Corporation on Tuesday, as many lenders have grown and become more complex.
jlne.ws/1HkhkXU
How advisers can avoid Finra scrutiny over personal liens, judgments, or bankruptcies
Investment News
While disclosures of negative personal financial events are not pleasant, the consequences of not making them can be severe
jlne.ws/1cZgtPI
SEC Takes Aggressive Approach to Fortify Dodd-Frank’s Whistleblower Rules
by Jeff Kern, Sheppard Mullin Richter & Hampton LLP via JD Supra
On April 1, 2015, the Securities & Exchange Commission (the “SEC” or “Commission”) fined a public company $130,000 for requiring employees involved in internal investigations to sign a confidentiality agreement that the Commission deemed violative of the whistleblower protections contained in the Dodd-Frank Act. KBR, Inc., Exchange Act Release No. 74619 (Apr. 1, 2015). This case was the first brought by the SEC involving anti-disclosure language of this type.
jlne.ws/1K4ravm
CFTC freezes assets of DG Wealth Management over FX ponzi scheme & client funds misappropriation
By Andrew Saks-McLeod, Leaprate
The CFTC has issued a complaint alleging that Florida resident Dorian Garcia returned nearly $2.1 million to investors in a manner akin to a Ponzi scheme and misappropriated approximately $2.5 million of investor funds
jlne.ws/1yRE6Uz
Exchanges & Trading Facilities
SGX Quarterly Profit Climbs 16% as Taiwan Link Seen in 2016
Bloomberg
Singapore Exchange Ltd., Southeast Asia’s biggest bourse operator, reported a 16 percent increase in quarterly profit as equity turnover climbed and a rally in Chinese stocks spurred demand for derivatives.
Profit rose to S$88.2 million ($65.6 million) in the three months through March 31 from S$75.8 million a year earlier, the company said in a filing on Wednesday. Revenue from derivatives jumped 52 percent in the quarter, spurred by a surge in volumes on FTSE China A-50 Index futures, according to the company.
jlne.ws/1QiyLei
SGX sees another quarter of growth with net profit of $88 million
SGX
3QFY2015 Financial Summary;Revenue $199 million, up 20% from year earlier; Operating profit: $103 million, up 17%; Net profit: $88 million, up 16%; Earnings per shares: 8.2 cents, up 16%; Interim dividend per share: 4.0 cents, unchanged
All figures are for the current year except for figures in brackets which are for the year earlier, unless otherwise stated
Singapore Exchange (SGX) today reported net profit of $88.2 million ($75.8 million) in the third quarter of financial year 2015 (FY2015), higher by 16% year on year and 2% quarter on quarter. Revenues grew 20% year on year to $199.3 million ($165.6 million). Excluding Energy Market Company’s[1] (EMC) revenue of $5.8 million, all businesses recorded higher revenues compared to a year earlier. Expenses in Q3 increased 18% to $91.0 million excluding EMC’s expenses of $5.4 million. Earnings per share were 8.2 cents (7.1 cents). The declared interim dividend is 4.0 cents, unchanged from the last quarter.
jlne.ws/1EaRV0p
LSE Likely to Do Deal With Rival Exchange Within Two Years
WSJ
The London Stock Exchange Group is likely to do a deal with one of the other big four Western exchanges groups within two years, according to LSE chief Xavier Rolet.
“Market infrastructure is still a bit of a cottage industry. It is ripe for change. When there is an industry with competitive tension, consolidation tends to be not too far behind,” he said in an exclusive interview with The Wall Street Journal.
jlne.ws/1QiyTu7
Hedge Funds & Managed Futures
Bill Gross says German bund is ‘short of a lifetime’
By Ellie Ismailidou, MarketWatch
Bill Gross has the perfect remedy for investors baffled by record-low yields in the eurozone. According to the bond guru, shorting low-yielding eurozone bonds is a great opportunity for profit, at a time when “not even ‘thin gruel’ is being offered to our modern day Oliver Twist investor.”
jlne.ws/1aRzToa
Hedge fund push on swaps trades hits snag with CFTC’s Giancarlo
NorthJersey.com
Hedge-fund lobbying hasn’t persuaded a key U.S. regulator that the government should step in to curb Wall Street banks’ power over the $700 trillion swaps market.
jlne.ws/1FdHjP2
Banks & Brokers
FXCM to focus on wholesale business
By Chelsey Dulaney, The Wall Street Journal
FXCM said on Monday that it plans to focus its institutional operations on its wholesale business, as the New York-based foreign-exchange broker sells off non-core assets to repay debt.
jlne.ws/1ErFG1F
Thomson Reuters March FX volumes rise 13 pct from month ago
Reuters
Daily foreign exchange volumes on currency platforms run by Thomson Reuters rose to $402 billion last month from $355 billion in February, the company said in a statement on Tuesday.
jlne.ws/1GhQ612
Female Goldman Sachs banker agrees settlement
Jane Croft, FT
A senior banker at Goldman Sachs who claimed she was cheated out of millions of pounds in bonuses and subjected to sexist comments has reached a confidential settlement with the investment bank — just before her employment case was due to start.
jlne.ws/1DAkb7V
Clearing & Settlement
Exclusive: EU eyes more delay in clearing house decision
Reuters
The European Union is looking to again postpone imposing new capital rules on EU banks that trade derivatives through non-EU clearing houses, according to a document seen Tuesday.
Amid an ongoing test of wills between European and US regulators, the EU has scheduled a vote Friday to delay the decision until December, a draft of Friday’s agenda says.
jlne.ws/1K4u3wf
DTCC to link Omgeo Protocoll to GlobalCollateral’s margin transit utility | Financial Industry & Algorithmic Trading News
Financial Industry & Algorithmic Trading News | Automated Trader
The Depository Trust & Clearing Corporation (DTCC) has announced that Omgeo ProtoColl, its front-end collateral management system, is integrating with DTCC-Euroclear GlobalCollateral Limited’s Margin Transit Utility (MTU), a solution designed to deliver straight through processing of the settlement of margin obligations.
jlne.ws/1Qixm7e
LCH.Clearnet First Central Counterparty to Offer Settlements Account in Australian Dollar
WatersTechnology
LCH.Clearnet has announced new deposit and liquidity facilities with the Reserve Bank of Australia (RBA) to settle Australian Dollar payments.
jlne.ws/1QixqnM
Clearstream To Offer Settlement And Custody For Municipal Bonds In Romania
Clearstream
Clearstream is the first ICSD to offer these services; First accepted RON-denominated municipal bond will be issued by the city of Bucharest and have a value of up to EUR 500 million; Raiffeisen Bank Romania is the Lead Manager and Bookrunner, while BT Securities is the Manager; Bancpost is the local custodian
A recent change in regulation now enables Clearstream to offer settlement and custody for municipal bonds in Romania. Clearstream is the first international central securities depository (ICSD) to offer this service in the country through an indirect link to the Depozitarul Central, the Romanian CSD, via its custodian Bancpost. The indirect link complements Clearstream’s direct link to the National Bank of Romania.
jlne.ws/1aRB8nl
Indexes & Products
Nikkei 225 passes 20,000 after 15-year wait
Josh Noble in Hong Kong, FT
Japan’s Nikkei 225 closed above 20,000 points on Wednesday for the first time since the days of the dotcom bubble, as investors respond to signs of improving corporate governance and an uptick in exports.
jlne.ws/1JtmrlS
Index funds (still) beat managed funds
www.chicagotribune.com
In honor of Financial Literacy Month, it’s time to return to a core concept of investing: the difference between a managed and an index fund. According to the Investment Company Institute (ICI), from 1990 to 2013, the number of households owning mutual funds more than doubled — from 23.4 million to 56.7 million. Given the explosion, it is amazing how many investors still do not understand the nuts and bolts of funds.
jlne.ws/1K4vXwN
International Adviser: A-share inclusion in the MSCI could drive foreign capital inflow
www.international-adviser.com
If China’s A-shares are included in world indices after a review in June, large amounts of capital could flow into the mainland market, said Catherine Yeung, investment director at Fidelity Investments.
“The economy is slowing, but what is interesting is if you look at China’s contribution to global growth, and then you look at China’s weighting in the MSCI World Index, then there is a huge under-representation of China,” Yeung said in an interview with International Adviser’s sister publication Fund Selector Asia.
jlne.ws/1QizMTr
Low Volatility Works For This Small-Cap ETF – SPDR Russell 2000 Low Volatility ETF
Seeking Alpha
With risk appetite high, low-volatility exchange-traded funds have recently taken some flak for lagging their traditional broad market peers.
That criticism, a familiar refrain as low-volatility funds have become increasingly popular with investors, often focuses on the performance of “low-vol” ETFs in short time frames. Over the long haul, ETFs that emphasize a volatility damping approach have often offered superior risk-adjusted returns.
jlne.ws/1QiA6BE
STOXX LIMITED AND KRX ENTER INTO MOU
STOXX
STOXX Limited, a leading provider of innovative, tradable and global index concepts, and The Korea Exchange, Inc. (KRX) today announced the signing of a memorandum of understanding (MOU) to create a long-term cooperation between the two companies.
(No Link)
Technology
Goldman Sachs makes $20m investment in HFT tech provider
Financial Times
Not much money in high-frequency trading? Goldman Sachs begs to differ.
The US investment bank announced on Tuesday it had spent $20.5m on an undisclosed minority stake in Perseus, a six-year old US technology company that provides banks and high-speed traders with cutting edge tools.
jlne.ws/1K4wVsR
The Blockchain of Blockchains
NEWSBTC
It seems that more and more things are being placed on the blockchain. Altcoins, smart property, and even decentralized organizations are now emerging, and the inclusion of the Internet Things will add billions of devices from around the world.Eventually, everything will be on the blockchain, or at least everything in the decentralized world. Stored in readable form, no user would be able to handle that much data; with the advent of Factom, however, we can hash that data down to a manageable size and still use it to authenticate records.
jlne.ws/1QixYd3
Societe Generale launches collateral management service
www.finextra.com
Societe Generale has launched “Tempo”, a comprehensive and innovative collateral management outsourcing solution aimed both at buy-side and sell-side market participants, including traditional and alternative asset managers, institutional investors, banks and major corporates.
A unique, multi-asset offering, “Tempo” alleviates the complexity, cost and operational burden of collateral management throughout the entire value chain.
jlne.ws/1QixHqI
Nasdaq to Provide SMARTS Market Surveillance Technology to Japan Electric Power eXchange
nasdaq.einnews.com
Japan Electric Power eXchange (JEPX), the primary exchange for electricity in Japan, has announced that they will enhance their market oversight capabilities with Nasdaq’s (Nasdaq:NDAQ) leading SMARTS Market Surveillance platform. The technology will give JEPX the surveillance tools to monitor spot and forward transactions of electricity for market manipulation, as well as complex analytical capabilities. The surveillance system will be operational before the full deregulation of Japan’s electricity industry which is slated to enter into the country’s retail sector in April 2016. Mitsubishi Electric Corporation (MELCO) will be the system integrator for this project.
jlne.ws/1K4v4nY
Wall Street veterans back fintech software start-up
Financial News
A fintech start-up that helps banks and trading firms modernise their desktop software has raised $3 million in its latest round of fundraising, landing investments from three US venture capital firms and several former finance-sector executives.
jlne.ws/1QiB0hs
Nasdaq to provide surveillance tech to JEPX
Automated Trader
Japan Electric Power eXchange (JEPX), the primary exchange for electricity in Japan, has announced that they will enhance their market oversight capabilities with Nasdaq’s SMARTS Market Surveillance platform.
The technology will give JEPX the surveillance tools to monitor spot and forward transactions of electricity for market manipulation, as well as complex analytical capabilities. The surveillance system will be operational before the full deregulation of Japan’s electricity industry which is to enter into the country’s retail sector in April 2016. Mitsubishi Electric Corporation (MELCO) will be the system integrator for this project.
jlne.ws/1QiBcgL
Lombard Risk Winner of Custody Risk’s Americas Award 2015 – “Collateral Services Provider of The Year”
Lombard Risk
Lombard Risk Management plc (Lombard Risk), a leading provider of integrated collateral management, regulatory compliance and reporting solutions for the financial services industry, was presented with the prestigious 2015 Custody Risk Americas Award on April 15th for “Collateral Services Provider of the Year”.
jlne.ws/1FdJ1zY
Enforcement
Ex-AIG chief Greenberg in last-ditch bid to avoid trial
By Karen Freifeld, Reuters
In a last-ditch effort to avoid trial, former American International Group Inc Chairman Maurice “Hank” Greenberg is seeking permission to ask New York’s highest court to throw out the accounting fraud case against him.
jlne.ws/1GhPtoo
FCA fines Merrill Lynch International £13.2 million for transaction reporting failures
UK FCA
Merrill Lynch International (MLI) has been fined £13,285,900 by the Financial Conduct Authority (FCA) for incorrectly reporting 35,034,810 transactions and failing to report another 121,387 transactions between November 2007 and November 2014.
jlne.ws/1HUlwNk
Dubai Financial Services Authority Takes Action Against Hany Lotfy Awwad Abdelwahab
MondoVisione The Dubai Financial Services Authority (DFSA) has imposed a fine of USD 45,000 (AED 165,150) and a restriction, on Mr Hany Lotfy Awwad Abdelwahab (Mr Abdelwahab) for providing the DFSA with false, misleading or deceptive information, and for obstructing the DFSA by failing to comply with DFSA investigative notices.
jlne.ws/1aRATbK
‘Flash Crash’ Charges Filed;Authorities say a trader in the U.K. helped trigger wild swings that shook markets in May 2010
By ARUNA VISWANATHA in Washington, BRADLEY HOPE in New York and JENNY STRASBURG in London, WSJ
A trader who operated out of his West London home was arrested by British authorities Tuesday on U.S. charges that he helped cause the Dow Jones Industrial Average to plummet 1,000 points on May 6, 2010, in what came to be known as the “flash crash.”
jlne.ws/1DMORpP
Whistleblower Jim Marchese Scores Millions in Payout—Again; Bank of America settlement brings Marchese, of ‘Real Housewives of New Jersey’ fame, a rare second award; ‘It’s not within me to not say something’
By CHRISTINA REXRODE, WSJ
On television, Jim Marchese is the trash-talking bad boy from “The Real Housewives of New Jersey.” His off-camera role is lesser-known but still lucrative: Mr. Marchese is a whistleblower who twice has collected seven-figure awards for tipping off authorities to corporate wrongdoing.
jlne.ws/1ErBlvf
CFTC Charges Florida-Based Sentry Asset Group, LLC and its Owner, John Pakel, with Engaging in Illegal, Off-Exchange Precious Metals Transactions
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil enforcement action in the U.S. District Court for the Southern District of Florida against Defendants Sentry Asset Group, LLC (SAG) of Boca Raton, Florida, and its owner and manager, John Pakel of Del Ray, Florida. The CFTC Complaint charges the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis. The Complaint further alleges that as controlling person for SAG, Pakel is liable for SAG’s violations of the Commodity Exchange Act (CEA).
jlne.ws/1DcRwFE
CFTC Charges U.K. Resident Navinder Singh Sarao and His Company Nav Sarao Futures Limited PLC with Price Manipulation and Spoofing
CFTC
The CFTC Complaint Alleges that Defendants’ Manipulative Conduct Contributed to the Market Conditions that Led to the May 6, 2010 Flash Crash
The U.S. Commodity Futures Trading Commission (CFTC) today announced the unsealing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Nav Sarao Futures Limited PLC (Sarao Futures) and Navinder Singh Sarao (Sarao) (collectively, Defendants). The CFTC Complaint charges the Defendants with unlawfully manipulating, attempting to manipulate, and spoofing — all with regard to the E-mini S&P 500 near month futures contract (E-mini S&P). The Complaint had been filed under seal on April 17, 2015 and kept sealed until today’s arrest of Sarao by British authorities acting at the request of the U.S. Department of Justice (DOJ). After the arrest, the DOJ unsealed its own criminal Complaint charging Sarao with substantively the same misconduct.
jlne.ws/1JtgSE9
Environmental & Energy
E.U. Charges Russian Energy Giant Gazprom With Abusing Its Dominance
By James Kanter – The New York Times
European antitrust regulators on Wednesday charged the Russian energy giant Gazprom with abusing its dominance in natural gas markets, a move amounting to a direct challenge to the authorities in Moscow.
jlne.ws/1DAlIeq
(Australia’s) Greg Hunt says cutting emissions by 30% by 2025 is an ‘onerous’ goal
By Melissa Davey – The Guardian
Cutting greenhouse gas emissions by 30% by 2025 would be an “onerous” task, Australia’s environment minister has said.
jlne.ws/1G5p8Hr
***LB: Also in this story “On Tuesday the Climate Change Authority (CCA) recommended the cut and said Australia should also increase its commitment to cut 2000-level emissions by 2020 from 5% to 19% if it wanted to be taken seriously at the Paris climate change talks in December.”
Earth Day: scientists say 75% of known fossil fuel reserves must stay in ground
By Adam Vaughan – The Guardian
Three-quarters of known fossil fuel reserves must be kept in the ground if humanity is to avoid the worst effects of climate change, a group of leading scientists and economists have said in a statement timed to coincide with Earth Day.
jlne.ws/1K3O31T
Ex-BP CEO says oil prices will rocket
FT
Tony Hayward, the former BP chief executive who runs Iraqi Kurdistan-focused Genel Energy, said oil prices are set to soar as OPEC has taken just six-months to stop the US shale oil boom in its tracks.
jlne.ws/1GhNQXK
California faces ‘almonds v people’ dilemma
Emiko Terazono, FT
California needs to reconsider whether it is the best place for almonds to be grown in the face of the state’s water crisis, said the head of one of the world’s largest agricultural businesses.
jlne.ws/1zLm0OW
Asia-Pacific
Crazy Facts About China’s Stock Market That Will Make You Think Twice Before Investing
Forbes
A common saying is you can tell a bull market has run its course when your taxi driver starts recommending which stocks to buy. In China, everybody seems to be an expert today.
While shares in Shanghai and Shenzhen have doubled in value over the past year, economic fundamentals are painting a distinctively gloomy picture for the world’s second largest economy. China’s GDP outlook hasn’t looked this bad in 25 years, while concerns over a real estate bubble, overcapacity and deflation plague the wider economy.
jlne.ws/1K4BeEE
Forget about Wall Street: Shanghai is now the market to watch
MarketWatch
Get up. Take shower. Brush teeth. Feed the cat or the dog. Check what the Shanghai market has been doing overnight.
For anyone in Europe who takes the markets seriously , that is now the regular morning routine. It is very much as it has always been, except with one big difference. Whereas once the standard reflex would have been to look at what had happened on Wall Street overnight, with perhaps a sideways glance at Tokyo, now it is Shanghai that investors look to.
What happens in China is now what dominates what happens in the rest of the world.
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Shanghai Bull Fevor Spreads To The US – Asia Stocks to Watch
Barron’s
The bull sentiment in Shanghai has spilled over to Hong Kong, and now to the U.S. with investors grabbing China ETFs and New York-listed China ADRs.
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Taiwan-Singapore Stock Trading Link to Launch in July; Cross-border platform comes months after the Shanghai-Hong Kong Stock Connect
By FANNY LIU and ARIES POON, WSJ
A stock-trading link between Taiwan and Singapore will launch on July 1, the Taiwanese financial regulator said Wednesday, the latest tie up between stock exchanges in Asia in a bid to boost volumes and listings.
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Changes to QE programmes and stock connects will speed liberalisation
South China Morning Post
In line with China’s long-term commitment to opening its capital account, momentum towards internationalisation of the yuan will continue to build in 2015. We expect capital account liberalisation will accelerate sharply this year with significant changes to the “Q” programmes and the stock connect(s).
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Frontier Markets
As Emerging Markets Vie for Foreign Money, Taiwan Turns It Away
Bloomberg
While most emerging markets are jostling for foreign funds before the U.S. Federal Reserve starts raising interest rates, Taiwan is turning them away.
The island introduced limits on foreign investment in the corporate bond market Tuesday, a move analysts said is aimed at curbing inflows that have pushed up the Taiwan dollar. Foreigners piled $70 billion into the island in the first quarter, even with existing caps on purchases of government notes, money-market instruments and derivatives.
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Emerging market central banks get it mostly right
www.livemint.com
Over dinner, during the Institute of International Finance’s (IIF’s) Spring Membership Meetings in Doha, commentator Martin Wolf spoke about mature economies being in a state of “managed depression”, with central banks playing a key supporting role amidst policy divergences.
The Federal Reserve is poised to start raising interest rates from record lows later this year due to the improved economic performance, albeit at a measured pace reflecting labour market concerns, low inflation and the strong dollar.
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As NSE Strives Towards $1tn Market Cap, Articles
THISDAY LIVE
The strategic agreement between the Nigerian Stock Exchange and MSCI Incorporated to develop and market a co-branded family of indexes for the Nigerian equity markets and the introduction of the NSE Industrial Index have set the stage for the local bourse to attain $1 trillion market capitalisation, writes Eromosele Abiodun
One of the major targets of the Oscar Onyema’s led administration was to move the Nigerian Stock Exchange (NSE) market capitalisation to the $1 trillion mark by 2016. The ambition started in 2011 when Onyema took over as the chief executive officer of the NSE. To achieve that level of capitalisation, the NSE new that it has to deepen the market by introducing new products so as to attract more investors. And on of the ways creating some products around the indexes in the market.
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The BlackRock Emerging Markets Allocation Fund: An All In One Emerging Markets Tool? – BlackRock Emerging Market Allocation Portfolio A (MUTF:BEEAX)
Seeking Alpha
As investment advisors, we spend the majority of our time with our clients focused on the risk management aspect of their life, both as it relates to their financial planning and investment management. Because of our focus on risk reduction at the portfolio level, we use money managers to implement the specific themes of that plan. For those reasons, we use managed money investment products, particularly when we want to own more difficult to access investment asset classes. Because we can discuss this can be a long discussion I have posted about it on our instablog, which you can read more about it here.
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‘Robust’ African bonds market underpins infrastructure investment, says World Bank report
www.out-law.com
Spending on infrastructure and “buoyant services” are helping to boost growth in sub-Saharan Africa (SSA) and many of the region’s ‘frontier markets’ are taking advantage of relatively low global interest rates to issue Eurobonds to finance infrastructure projects, according to new analysis.
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Miscellaneous
Gary Gensler Resurfaces as Hillary’s CFO: Is He Our Next Treasury Secretary?
Streetwise Professor
At a couple of conferences recently, people asked me what Gary Gensler is up to? I said “I don’t know. It’s not like GiGi and I are buddies.” (True fact: he had me banned from the CFTC building.) Well, now we all know what he’s up to: Gensler has landed as the CFO of Hillary’s presidential campaign.
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The king of soya focuses on a high-tech vision of farming
Benedict Mander, FT
Argentina’s “king of soya” wears his crown reluctantly. Gustavo Grobocopatel winces at the mention of his nickname, dismissing it as just the result of people “putting a face” on a story — in this case, Argentina’s remarkable rebound from its economic collapse in 2001, powered by its booming soya industry.
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READ MORE: John Lothian: UK trader arrested over 2010 flash crash; ‘Flash crash’ arrest puts heat on futures market; ‘Flash crash’ market manipulation case poses test for prosecutors.