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November 1, 2012
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  Top Stories 
  • Rules prompt banks to embrace futures, exchange execs say
    Major banks are starting to embrace futures contracts that they had previously been resistant to using, according to heads of some exchanges. Rules intended to lower risks of over-the-counter derivatives are prompting some investors to shift toward exchange-traded products, the executives said at the FIA Futures & Options Expo. "Many of the large banks that never supported these innovations are going to be market makers for us on day one," CME Group CEO Phupinder Gill said. The exchange executives also said that changes are being made to improve protection of market participants. Reuters (10/31), Forbes/Kitco News (10/31) LinkedInFacebookTwitterEmail this Story
  • FSB calls on derivatives regulators to iron out differences
    The Financial Stability Board told regulators worldwide to accelerate efforts and coordinate derivatives rules. "Market infrastructure is in place and can be scaled up. Regulatory uncertainty remains the most significant impediment to further progress and to comprehensive use of market infrastructure," according to an FSB report for Group of 20 finance ministers. "However, progress to date in cross-border discussions has been slow. This risks delaying the full and timely implementation of the G20 objectives." Reuters (10/31), Bloomberg Businessweek (10/31) LinkedInFacebookTwitterEmail this Story
  • Report on MF Global's collapse is coming soon, lawmaker says
    A House Financial Services subcommittee is moving toward releasing a report on its investigation of the demise of MF Global in the next few weeks. "MF Global customers deserve to know how and why their funds went missing; market participants deserve to know whether regulatory lapses have been identified and corrected; and taxpayers deserve to know that policymakers and regulators have been held accountable,” Rep. Randy Neugebauer, chairman of the subcommittee, said in a statement. Investment Advisor (10/2012), The Hill/On the Money blog (10/31), MarketWatch (10/31) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
 
  • Traders sidestep ban on shorting government debt
    Exchange-traded government-bond futures not covered by new rules are opening a way for traders to effectively short government debt, thereby increasing funding costs, something the regulations were intended to prevent. High volumes in European government-bond futures revealed the flaw in the rules, which ban naked short positions in sovereign credit default swaps. Meanwhile, traders, brokers and other market participants are questioning the rules, saying they create confusion and leave the market unprepared. International Financing Review (free content) (10/31), Financial Times (tiered subscription model) (10/31) LinkedInFacebookTwitterEmail this Story
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  Industry Developments 
  • Rules may force some FCMs out of business
    The Commodity Futures Trading Commission's newest round of proposed rules focus on futures commission merchants' handling of customer funds. Some say this will force some FCMs out of the business, resulting in less choice for the buy side, Richard Henderson writes. The Trade News (U.K.) (10/30) LinkedInFacebookTwitterEmail this Story
  • Other News
  Electronic Trading News 
  • CFTC should tackle HFT pre-trade, O'Malia says
    Scott O'Malia, a member of the Commodity Futures Trading Commission, says the agency should focus on pre-trade functionality when it tackles concerns related to high-frequency trading. Some countries are discussing the idea of directly inspecting algorithms, but O'Malia argues against such efforts. "If we were to review each and every algorithm, that would put us similar to the FDA, the Food and Drug Administration, right? They have the mission and responsibility to review and look at the impact of all the drugs on the market and medicines, et cetera. So is that the role the commission would do? We don't have the people in that capacity to understand it," he said. AutomatedTrader.net (10/31) LinkedInFacebookTwitterEmail this Story
  Commodities and Managed Futures 
  SmartQuote 
Nature does not equally distribute energy. Some people are born old and tired while others are going strong at 70."
--Dorothy Thompson,
American journalist and radio broadcaster


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