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January 23, 2013
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  Regulatory Roundup 
  • Derivatives rules will merely transfer risk, Rolls-Royce CFO says
    New derivatives regulations will shift risk rather than eliminate it, says Mark Morris, chief financial officer at Rolls-Royce. "If you try to replace the counterparty risk by using central clearing or some form of posting of collateral, what you're doing is you're replacing counterparty risk with liquidity risk," Morris says, adding that the amount of collateral the regulations would force his company to post would prohibit it from investing in the "real economy." (1/22) LinkedInFacebookTwitterEmail this Story
  • Analysis: Middle ground is needed on derivatives regulation
    The wild swings in derivatives regulation must end, write Martin Neil Baily and Aaron Klein. History has shown that neither deregulation nor over-regulation make for effective policy, so it's time for limited and smart regulation that will "[t]ackle the problems that emerged in the derivatives market and improve the economy's stability, while still reaping the economic benefits derivatives can and do provide," Baily and Klein write. Yahoo/The Exchange blog (1/22) LinkedInFacebookTwitterEmail this Story
  • Other News
  Industry Developments 
  • Currency trading declines among U.S. retail investors
    The fourth quarter saw a 20% decline in active retail currency traders in the U.S. compared with the same period two years before. Tougher regulation by the Commodity Futures Trading Commission, while protecting clients more effectively, has also made it less enticing for forex brokers to operate in the U.S., with three leaving in the past six months alone. Reuters (1/22) LinkedInFacebookTwitterEmail this Story
  • Prosecutors say Peregrine fraud amounts to $215 million
    Peregrine Financial Group CEO Russell Wasendorf Sr. started stealing from clients in the 1990s and ultimately took about $215 million, prosecutors say. The thefts were executed by altering bank statements before they were given to the chief financial officer and accountants, Wasendorf's plea agreement indicates. Bloomberg (1/23) LinkedInFacebookTwitterEmail this Story
  • Other News
  Electronic Trading News 
  • Rep. Markey raises concerns about high-frequency trading
    High-frequency trading may be holding back the economy, Rep. Ed Markey, D-Mass, argues. "There is a real risk that algorithmic trading is making investors hesitant to re-enter the equity markets because they fear that the entire game is rigged," Markey wrote in a letter to the Securities and Exchange Commission that urges the agency to institute "rules that restrict or eliminate the practice." But Liquidnet CEO Seth Merrin says a better option might be for the SEC to make "an HFT-free trading zone open to every investor." Fox Business (1/22) LinkedInFacebookTwitterEmail this Story
  • Computer-based FX trading is back as markets normalize
    Quantitative trading is returning to currency markets as bond markets and other asset classes once again begin differentiating themselves. The algorithmic-based trading strategy has struggled in the past two years as markets moved in concert in response to policy suggestions instead of quantitative measures. Reuters (1/22) LinkedInFacebookTwitterEmail this Story
  Commodities and Managed Futures 
  • Blame biofuels for higher food costs, Nestle chairman says
    The production of biofuels from agricultural commodities is a bigger issue in higher food prices than is financial speculation, says Peter Brabeck-Letmathe, chairman at Nestle. "Financial speculation is not responsible for the increase in food prices; it's responsible for the volatility of food prices but not the initial increase," Brabeck-Letmathe says. Bloomberg (1/19) LinkedInFacebookTwitterEmail this Story
  • Other News
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