The Unravelling of Tom Hayes, Part Three: The U-Turn

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Top Headlines

The Unravelling of Tom Hayes, Part Three: The U-Turn – Wall Street Journal (subscription)
Tom Hayes came bearing big news when he arrived at his lawyers’ offices in central London in August 2013. He had decided to fight the criminal charges filed against him by the UK’s Serious Fraud Office. Lydia Jonson, his lawyer at the time, delivered a blunt response. “The SFO will crush you.”


Blockchain Initiative Backed by Nine Large Investment Banks – Financial Times (subscription)
Nine of the largest investment banks, including Goldman Sachs, JP Morgan and Credit Suisse, are planning to develop common standards for blockchain technology in an effort to broaden its use across financial services.

Mind The Gap – Profit & Loss (subscription)
The numerous benefits that technology has brought, and continues to bring, to the FX market have been well documented, but some banking sources have expressed concerns about some of the risks created as a by-product of this technology. One issue flagged by these sources when discussing banks’ FX risk management capabilities is that new traders coming into the industry don’t have the same level of understanding around how risk operates as they once did.

A New Paradigm for Prime Services – Profit & Loss (subscription)
As many prime brokers continue to withdraw their services from smaller clients, the prime-of-primes are seeing more business come their way. Profit & Loss looks at the implications of this trend for the FX market and asks whether it is a temporary shift or a permanent evolution for the industry.

Rules for ‘Dark Pool’ Trading Need Strengthening: Report – Reuters
US regulators need to accelerate their efforts to beef up the rules governing “dark pool” trading platforms to better protect investors from poor trade execution and conflicts of interest, according to a new report released Tuesday.

FX: Debate on Last Look Continues to Rage – Euromoney
Regulators might be suspicious of it, but even market participants who have shifted their stance on last look reckon clients should be allowed to make up their own minds.

European Bankers Can’t Catch a Break as Firings Keep Coming – Bloomberg
New management teams at Deutsche Bank, Barclays and Standard Chartered are among executives contemplating reorganisations that could involve thousands of job reductions.

Translating Wall Street: Know Your Trading Slang – Financial News (subscription)
Monkey, bang, slam, hammer, spoof, alligator, pony, put some pants on it: Can you tell what these traders are talking about?

 

Regulatory News

Giancarlo Urges CFTC to Continue With Rulemaking Reform – Profit & Loss
As the Commodity Futures Trading Commission proposed an amendment that would replace an existing “no-action” letter regarding swaps rules, Commissioner Christopher Giancarlo urged the Commission to continue amending flaws in the Dodd-Frank rule-making process.

Trade Body Calls for One Year Mifid II Delay – FOW (subscription)
The Investment Association, a UK­-based trade association, has hit out at the Mifid II pre-­trade transparency provisions and called on European regulators to push back by a year the implementation of Mifid II. The trade association said the Mifid II transparency provisions “could damage already-strained levels of liquidity in the bond markets, triggering higher transaction costs and higher borrowing costs for sovereigns and companies.”

Esma Warns Budget Will Cause Delays – FOW (subscription)  
Steven Maijoor, chairman of the European Securities and Markets Authority (Esma), has warned EU lawmakers that budget constraints are undermining the ability of the European regulatory authorities to deliver post-financial crisis reforms.

Banks Hope for Mifid Reprieve on Fixed Income Research – Risk Magazine (subscription)
European legislators are expected to take a softer line on the unbundling of fixed income research after France, Germany and the UK joined industry critics in calling for change. If asset managers were forced to pay separately for research – the cost of which is currently recouped indirectly via trading commissions and spreads – smaller firms claim they would have less information.

Wall Street Banks Reach Deal With Regulators on Data Retention – New York Times
Four of Wall Street’s biggest banks on Monday agreed to cooperate with New York regulators and retain copies of communications sent through the messaging platform known as Symphony.

Lawyers Call for Clearer Rules for FX Forwards – Euromoney
Lawyers have called for European regulators to provide more clarity on whether FX forwards that are entered into for hedging purposes, as opposed to as investments, lie outside the scope of regulation.

 

Company News

State Street Expands Currency-Hedged ETF Lineup to Woo Investors – Bloomberg
State Street Corp., the firm that opened the first US exchange-traded fund in 1993, added two currency-hedged ETFs as it competes with similar offerings from rivals including WisdomTree Investments.

Pragma Selects SmartTrade Technologies for FX Aggregation Software – Profit & Loss
Pragma Securities, a provider of quantitative trading technology, has selected SmartTrade Technologies to provide it with a foreign exchange liquidity aggregation platform.

Former Merrill Head Tipped for New Citi Futures Role – FOW (subscription)
Peter Jaeger has emerged as the front­-runner to replace Conor Cunningham as Citigroup’s head of Asian futures just days after Cunningham left that post, according to sources. Jaeger was previously Bank of America Merrill Lynch’s managing director, head of Asia Pacific futures and options, and over-­the­-counter clearing until he left that role in June.

Citadel Shut Out of Tradeweb As It Makes US Treasury Move – Risk Magazine (subscription)
Citadel Securities is set to start quoting US Treasuries on Bloomberg’s dealer-to-client trading platform this week but has been blocked from doing so on Tradeweb, thanks to a closely guarded rule book that is said to bar any firm from joining the bank-owned platform unless it is a primary dealer.

TriOptima Compression at CME: By the Numbers – Tabb Forum
By adding TriOptima’s triReduce compression service, CME is providing additional value to its clearing members over and above its own compression service. It’s also playing catch-up with LCH’s SwapClear.

 

Market Savvy  

Deutsche Bank: US Treasuries Won’t Be the First Victims of Quantitative Tightening – Bloomberg
If central banks keep dumping their foreign reserves, the world’s preeminent safe haven won’t be the first asset to show signs of stress. In a new note, Deutsche Bank, the original proponent of “quantitative tightening”, elaborated on its thesis that China’s foreign exchange policy is of paramount importance to financial markets, and the bank clarified some of the potential ripple effects stemming from a decline in the foreign reserve assets held by the world’s second-largest economy.

Dollar Underpinned by Rising US Yields as Fed Meets – Reuters
The dollar rose against a basket of currencies on Wednesday, underpinned by lofty US yields, after upbeat consumer spending data kept alive expectations the Federal Reserve would raise interest rates.

 

Press Releases

Bloomberg Vault Helps Firms Tackle Growing Issue Of Data Fragmentation
File Analytics helps firms gain control of data stored on-site and in the cloud by adding capabilities for Salesforce Files, Box, Microsoft SharePoint and Amazon S3.

FlexTrade Launches FlexEdge Daily Alpha Blog
FlexTrade Systems has debuted its new FlexEdge Daily Alpha blog, which illustrates the advanced alpha forecasting capabilities inherent in the FlexEdge predictive analytics trading service.

 

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