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February 12, 2013

Daily newsletter from NYSSA for investment professionals

Top Story

Nasdaq reportedly intensifies search for partner or buyer
Nasdaq OMX Group is stepping up the pace of its discussion of strategic options, including a joint venture or an outright sale, sources say. Carlyle Group and Nasdaq reportedly discussed taking the company private, but the talks ended without a deal. Bloomberg (2/11), Reuters (2/11), Financial Times (tiered subscription model) (2/11), The Wall Street Journal (2/11)

Industry Update

RBS' Libor settlement reveals central figure
A figure has emerged from Royal Bank of Scotland's settlement related to alleged manipulation of the London Interbank Offered Rate. Trader Tom Hayes traveled from lender to lender, making contacts needed to manipulate the benchmark, regulators say. Meanwhile, RBS executives told the U.K. Parliamentary Commission on Banking Standards that they thought manipulating Libor was not possible. MarketWatch (2/9), Bloomberg (2/11), The New York Times (tiered subscription model)/DealBook blog (2/11)

Fed warns of high-yield rally encouraged by monetary policy
Federal Reserve Governor Jeremy Stein warned that the speculative-grade debt market, which has expanded rapidly largely in response to the central bank's monetary policy, is overheating. "We are seeing a fairly significant pattern of reaching-for-yield behavior emerging in corporate credit," he said. Bloomberg (2/11)

CFTC mishandled swaps rules, Sommers says
The timetable for the Commodity Futures Trading Commission's swaps rules created unneeded issues because the derivatives market wasn't given time to adapt, CFTC member Jill Sommers says. "We have spent the past six months basically writing no-action letters and listening to market participants tell us they're not ready," says Sommers, who will leave the CFTC in March. Risk.net (subscription required) (2/11)

Alphabet soup of transaction codes might be getting muddled
The proliferation of transaction codes might be causing confusion, experts say. "Does the originator of a transaction get identified with USIs? No, the originator gets a [derivatives-clearing organization's] internal counterparty number, a [National Futures Association] ID if they come with that or a [Commodity Futures Trading Commission Interim Compliant Identifier] if they present that," said Allan Grody, president of Financial Intergroup. "The rest of the USI is a transaction identifier, unique to the swap, not the swap business entity that was the transactor." Securities Technology Monitor (2/11)

New York Focus

Gov. Christie's gambling-bill changes win Democrats' support
Democrats in the New Jersey Legislature reportedly have decided to go along with changes sought by Gov. Chris Christie for a bill to authorize Internet gambling based in Atlantic City. Both houses of the Legislature are expected to approve Christie's proposals on Feb. 26 and send the bill to the governor for final approval. The Star-Ledger (Newark, N.J.) (2/11)

Quinn stakes out a middle-class stance in NYC
New York City Council Speaker Christine Quinn, who is seeking the Democratic nomination for mayor, urged action to fight income inequality during her State of the City address. She called for a middle-income tax break and a plan to provide more affordable housing. The New York Times (tiered subscription model) (2/11)

Career Development

How to be a more virtuous leader
Good leaders need to be virtuous -- and that means embracing prudence, temperance and courage, writes Deborah Mills-Scofield. In decision-making, strive to be disciplined, balanced and reflective rather than simply jumping at every opportunity that comes along, Mills-Scofield writes. SmartBrief/SmartBlog on Leadership (2/7)

People & Personalities

Lew to face Citi questions at confirmation hearing
Jack Lew's work at Citigroup, before he joined the State Department in 2009, reportedly will be Republicans' focus during Senate hearings on Lew's nomination as Treasury secretary. "If taxpayers are going to prop up failed banks, they have a right to know what a key executive like Mr. Lew did at that time," said Sen. Orrin Hatch, R-Utah. Observers say Lew appears likely to be confirmed. "Mr. Lew has been confirmed by the Senate three times already," said Sen. Max Baucus, D-Mont. "I don't expect there to be any reason why he should not be confirmed this time around as well." Bloomberg (2/12), The Washington Post (2/11)

Financial Products

PIMCO rolls out actively managed currency ETF
Pacific Investment Management is introducing its first actively managed currency exchange-traded fund. The PIMCO Foreign Currency Strategy ETF targets investors who want protection against the deteriorating value of the U.S. dollar, the company says. Pensions & Investments (free registration) (2/11), Barron's (free content)/Focus on Funds blog (2/11), ETF Trends (2/11)

SmartQuote

We spend our time searching for security and hate it when we get it."

--John Steinbeck,
American author

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