SEC gets help, including from FBI, on HFT issues | Gensler may keep post at CFTC | Osborne backs giving investors a choice in clearing trades
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March 6, 2013
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SEC gets help, including from FBI, on HFT issues
Members of the Quantitative Analytics unit at the Securities and Exchange Commission have been meeting with representatives from the FBI and other regulators to share expertise and tackle concerns related to high-frequency trading. The FBI's collaboration is part of an effort to keep up with quickly evolving trading strategies, sources said. Reuters (3/5), Business Insider (3/5), Financial Times (tiered subscription model) (3/5)
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Gensler may keep post at CFTC
The White House is in talks with Gary Gensler about a second term as chairman of the Commodity Futures Trading Commission, sources say. Gensler, who became chairman in May 2009, can remain in the job through year-end. He reportedly has expressed interest in other financial or economic positions in the Obama administration. Bloomberg Businessweek (3/5), The New York Times (tiered subscription model)/DealBook blog (3/5), The Wall Street Journal (3/5)
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Regulatory Roundup
Osborne backs giving investors a choice in clearing trades
U.K. Chancellor George Osborne told EU finance ministers that he supports a proposal to give investors a choice of where they clear stock, bond and derivative trades. The measure, which is part of the revised Markets in Financial Instruments Directive, faces opposition from nations including Germany. Reuters (3/5), Bloomberg (3/5), The Wall Street Journal (3/5)
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First clearing deadline shouldn't be an issue, Gensler says
The first deadline for mandatory clearing should pass smoothly on March 11, Commodity Futures Trading Commission Chairman Gary Gensler says. Some firms have raised concerns that their clients may not properly register on time and will be frozen of out derivative markets after the deadline, but Gensler said no firms have sought a temporary delay because of that. (subscription required) (3/5)
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Industry Developments
ISDA seeks feedback on credit derivatives proposals
The International Swaps and Derivatives Association is seeking feedback on proposed changes to standards governing credit derivatives. "This review is about looking back at the experience of the past 10 years since the 2003 definitions were published and thinking about what have we learned in that time and what changes might need to be made," said Mark New, ISDA's assistant general counsel in the Americas. "The working group is very much ongoing and considering a lot of different proposals." Bloomberg Businessweek (3/5), International Financing Review (free content) (3/5), The Wall Street Journal/MarketBeat blog (3/5)
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JPMorgan estimates effect of regulation on investment bank revenue
Market-structure rules could reduce JPMorgan Chase's revenues by as much as $2 billion annually, the bank estimates. Analysts are applying JPMorgan's estimate to other banks with large fixed-income trading desks such as Barclays and Royal Bank of Scotland. Financial News Online (U.K.) (free content) (3/5)
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JPMorgan, MF Global reach agreement on payout plan
JPMorgan Chase, MF Global and MF Global's creditors have come to terms over a repayment plan involving the bankrupt brokerage's estate. It is expected that the deal will increase JPMorgan's expected recovery of 73 cents on the dollar. Reuters (3/5)
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Electronic Trading News
Congressional inquiry on HFT is needed, NASAA says
Congress should investigate high-frequency trading, the North American Securities Administrators Association says. NASAA wants Congress to identify high-frequency traders and look at how their actions affect the markets. Reuters (3/5)
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Commodities and Managed Futures
CME aims for a 17.5-hour window for grain trading
Trading in grain and oilseed on the Chicago Board of Trade and Kansas City Board of Trade will be reduced to 17.5 hours a day beginning April 8, CME Group says. The plan requires approval by the Commodity Futures Trading Commission. CME expanded trading in May 2012 to 21 hours a day; a survey about reducing hours has drawn more than 4,000 responses, CME says. "While there were varying opinions about what the modifications to hours should be, we believe these changes balance the needs of our diverse global customers," CME's Tim Andriesen said in a statement. Bloomberg Businessweek (3/5), Reuters (3/5), Financial Times (tiered subscription model) (3/5)
Commentary: Brent prices aren't based on fundamentals
It not clear what Brent crude oil prices have been reacting to so far this year, but "it certainly hasn't been fundamentals," John Kemp writes, adding that a recent rally might be attributed to futures positions by money managers, including hedge funds. Reuters (3/5)
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FIA News
Save the Date for B├╝rgenstock 2013
The Swiss Futures and Options Association and the Futures Industry Association are pleased to announce Bürgenstock, the Global Forum for Derivatives Markets. The conference will be held Sept. 25 to 27, 2013, at the InterContinental Hotel in Geneva, Switzerland. Bürgenstock provides an ideal forum for encouraging closer cooperation among market participants and international regulators. To learn about sponsorship and exhibit opportunities, contact Toni Vitale Chan or Carol Gregoir.
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Every time you spend money, you're casting a vote for the kind of world you want."
-- Anna Lappé,
American writer, speaker and activist
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