Cboe tweaks VIX structure amid manipulation concerns | Goldman cautiously explores adding cryptocurrency trades | FIA's Puleston Jones discusses Brexit issues
June 21, 2018
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Cboe tweaks VIX structure amid manipulation concerns
Cboe Global Markets has made technological adjustments and says it plans more changes to the Cboe Volatility Index, particularly the monthly auction that sets the final price of VIX futures. Cboe is eager to engage more participants and to rectify problems with the auction, which has come under scrutiny in recent months and has roused suspicions of manipulation.
Bloomberg (tiered subscription model) (6/20),  Reuters (6/20),  The Wall Street Journal (tiered subscription model) (6/20) 
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Goldman cautiously explores adding cryptocurrency trades
Goldman Sachs is "very cautiously" exploring adding cryptocurrency trades beyond derivatives to "evolve its business and adapt to the environment," President and Chief Operating Officer David Solomon says. "We're listening to our clients and trying to help our clients as they're exploring those things, too," he says.
Bloomberg (tiered subscription model) (6/20) 
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FIA's Puleston Jones discusses Brexit issues
Questions remain about how Brexit affects equivalence assessments under Europe's revised Markets in Financial Instruments Directive, says Simon Puleston Jones, FIA's head of Europe. Puleston Jones also discusses how the US benefits from Brexit.
John Lothian News (6/20) 
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Regulatory Roundup
Deutsche Bank fined $205M for FX trading misconduct
The New York Department of Financial Services has fined Deutsche Bank $205 million for "improper, unsafe and unsound conduct" in foreign exchange trading. Traders used online chatrooms to try to manipulate currency prices between 2007 and 2013, according to the department.
BloombergQuint (India) (6/20),  Financial Times (subscription required) (6/20),  The Wall Street Journal (tiered subscription model) (6/20) 
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Experts urge UK Treasury to regulate cryptocurrencies
Four cryptocurrency experts appearing before a UK parliamentary committee have called on the Treasury to formalize regulation of cryptocurrencies. Among their arguments: A lack of oversight is preventing liquidity from entering the market, traders would welcome regulation and investors might move to jurisdictions making more of an effort to establish regulation.
Futures & Options World (subscription required) (6/20) 
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Industry Developments
Crypto Facilities to debut litecoin futures Friday
Crypto Facilities, which offers bitcoin, ripple and ethereum futures products, plans to add litecoin-dollar futures contracts Friday. Litecoin creator Charlie Lee expects more institutional investors to enter the marketplace as a result.
The Trade (UK) (6/20) 
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High one-day trading loss at Deutsche Bank raises risk concerns
A one-day trading loss during the first quarter at Deutsche Bank's US unit that was 12 times higher than an internal risk estimate has raised questions about the accuracy of value-at-risk metrics US regulators use to gauge risk at foreign banks. The size of the loss was not disclosed to regulators.
Bloomberg (tiered subscription model) (6/21) 
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Financial Technology
Firms should develop machine learning in-house, exec says
Firms should take an organic approach and design machine learning applications in-house, rather than buying off-the-shelf software, Aston Capital Management founder and CEO Isaac Lieberman says. "This simply is because each business is different and has its own objectives and ways of behavior," says Lieberman, former head of algorithmic trading at JPMorgan Chase.
Risk (subscription required) (6/20) 
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Asset managers go outside finance for data scientists
Asset-management firms upgrading data-science capabilities are tapping more experts outside the financial industry, including mathematical and computer experts.
The Wall Street Journal (tiered subscription model) (6/21) 
Commodities and Managed Futures
Oil traders don't see Chinese tariff threat as disruptive
Oil traders don't see the threat of a 25% Chinese tariff on the roughly $1 billion per month worth of crude oil shipped from the US to China as a major disruption because other big markets exist. Scott Shelton of ICAP said the US is likely to find other outlets within a few months, citing the Mediterranean and Europe as possibilities.
Reuters (6/20) 
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FIA News
June 27 webinar: "Swiss Financial Market Regulations Related to Derivatives"
Join us for our "Swiss Financial Market Regulations Related to Derivatives" webinar Wednesday, June 27. This webinar focuses on the upcoming rules and regulations related to the trading in derivatives with Swiss-based counterparties or the provision of financial services related to derivatives to Swiss-based clients on a pure cross-border basis, meaning without having a permanent establishment in Switzerland. This webinar gives an overview of the new key Swiss regulations and the new rules and regulations arising therefrom. Register now!
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New Course Geared to Ops Professionals, Technologists and Innovators
IFM's one-day course on Blockchain, DLT & Crypto-Assets includes a comprehensive lecture on crypto-assets, including cryptocurrencies, and the markets and economics that support them. This is followed by a deep dive into transaction mechanisms and smart contracts, which will be illustrated through animations, group activities and a detailed enterprise-grade platform demo. Participants will even create their own use case for presentation. The course is offered July 26 in Chicago, Sept. 13 in New York and Sept. 17 in London. Enroll!
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