BoE works on tougher stress tests of banks | Asian financial hubs threaten dominance of London, NYC | UK banks moving to eurozone get time to comply with ECB rules
March 28, 2017
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BoE works on tougher stress tests of banks
The Bank of England's Financial Policy Committee plans to conduct two stress tests of banks. The first reviews operational plans for adapting to the post-Brexit trading environment, while the second questions how banks would respond to a deep, prolonged recession.
City A.M. (London) (3/27),  Bloomberg (3/27),  Financial Times (tiered subscription model) (3/27),  Financial News (UK) (tiered subscription model) (3/27) 
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Asian financial hubs threaten dominance of London, NYC
London's and New York City's dominance as a financial center remains, but challenges are causing the cities to lose ground to Hong Kong and Singapore.
Financial Times (tiered subscription model) (3/26),  Politico Pro (subscription required) (3/27) 
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UK banks moving to eurozone get time to comply with ECB rules
UK banks moving to eurozone get extra time to comply with ECB rules
Lautenschlaeger (Daniel Roland/AFP/Getty Images)
British banks moving to the eurozone because of Brexit will be given up to two years to fully comply with the European Central Bank's rules, said Sabine Lautenschlaeger, vice chair of the ECB's supervisory board. Financial institutions will be granted "bank-specific phase-in periods" based on their business operations and risk profiles, she said.
Reuters (3/27),  RTT News (3/27),  Politico Pro (subscription required) (3/27) 
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Regulatory Roundup
CFTC reportedly to restructure surveillance
Commodity Futures Trading Commission acting Chairman J. Christopher Giancarlo plans to move some market-manipulation surveillance to the Division of Enforcement, while trading surveillance will remain at the Division of Market Oversight, sources say. "Moving surveillance to Enforcement is going to make it easier for surveillance staff to communicate directly with the staff that's going to investigate the lead," said former CFTC attorney Brian Walsh.
Bloomberg BNA (free content) (3/27) 
Industry Developments
CBOE connectivity issue prompts self-help alerts
CBOE Options Exchange experienced a connectivity issue Monday that caused US options exchanges to declare self-help alerts against CBOE to have trades rerouted. The issue lasted about 30 minutes, and CBOE did not halt trading.
Reuters (3/27) 
Electronic Trading News
Brokerage, CEO face charges of HFT market manipulation
The Financial Industry Regulatory Authority and some exchanges have filed charges against Lek Securities and its CEO, Samuel Lek, saying they helped a client with an alleged market manipulation involving high-frequency trades. The client is said to have engaged in layering, in which multiple orders were placed in various venues, then canceled, to distort and inflate the true value of the trade.
MarketWatch (3/27) 
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Financial Technology
Firms conduct blockchain test for US oil trades
Trafigura and French bank Natixis are testing blockchain to streamline exchange of contracts, letters of credit and other documents needed for settling trades in the US physical oil market.
Financial Times (tiered subscription model) (3/27) 
Hedge funds work on AI traders with "human" brains
Hedge funds are said to be developing and testing trade-capable computers with neural networks that operate on principles similar to those of the human brain, although they are not overclaiming ability. Numerous ventures in this field have proved unsuccessful, but deep learning, which is used by companies such as Google, Tesla and Amazon, is attracting interest and experimentation.
Bloomberg (3/27) 
Commodities and Managed Futures
ProShares launches 2 leveraged crude oil futures ETFs
ProShares has brought to NYSE Arca exchange-traded funds giving investors triple-leveraged exposure to crude oil futures and the inverse of those futures. The UltraPro 3X Crude Oil EFT is designed to deliver 300% of the performance of the Bloomberg WTI Crude Oil Subindex, while the UltraPro 3X Short Crude Oil ETF seeks to deliver 300% of the inverse of that subindex.
ETF Trends (3/27),  The Wall Street Journal (tiered subscription model) (3/27), (3/27),  Barron's (free content) (3/27) 
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Commentary: Go slow in opening Indian commodity market
The Securities and Exchange Board of India's plan to let domestic and foreign financial institutions enter the commodity-derivatives market should include a strengthening of SEBI's systems and procedures, writes Kavaljit Singh of Madhyam. The move would "ensure that commodity derivatives contracts are traded in a transparent and fair manner," Singh writes.
The Wire (3/27) 
FIA News
Luncheon keynote announced for L&C 2017: J. Christopher Giancarlo
FIA is pleased to announce that CFTC acting Chairman J. Christopher Giancarlo has been confirmed as the keynote luncheon speaker at the 39th Annual FIA Law & Compliance Conference. Giancarlo is just the latest addition to a great lineup of leading experts who will discuss a diverse range of regulatory developments and their practical implications. Check out this year's program, which features sessions for all skill levels, and join us May 3 to 5 in Washington, D.C. Register now!
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