New for Traders: Week ending November 9

A wrap-up of new products and services from around in the industry.

Regulation

  • The National Futures Association (NFA) launched an updated version of its Background Affiliation Status Information Center (BASIC), which provides additional financial information on futures commission merchants.
  • Bats Chi-X Europe has reportedly filed a proposal with the Financial Service Authority to become a registered investment exchange. If successful, it would become the third U.K. exchange, after the London Stock Exchange and ICAP’s Securities & Derivatives Exchange.
  • The Financial Services Authority approved Intercontinental Exchange Inc.’s request to clear European sovereign credit default swaps through its London-based futures unit beginning in 2013.
  • The Commodity Futures Trading Commission (CFTC) postponed the deadline when its LSOC (Legal Segregation with Operational Commingling) rule must be implemented from Nov. 8 to Nov. 13.

Commodities

  • CME Group will pay a total of $2 million to almost 200 Peregrine Financial Group (PFG) clients who traded on CME exchanges. The cash comes from a CME fund established earlier this year to protect farmers, ranchers and agricultural coops that use the company’s market to hedge their products.
  • CME Group announced it has reached a definitive agreement to acquire the Kansas City Board of Trade (KCBT) for $126 million in cash and a distribution of excess cash to members. CME Group agreed to keep the trading floor open for at least six months and will maintain a committee of KCBT participants to advise on hard red winter wheat contract terms and conditions for at least three years. CME Group CEO Phupinder Gill says, “This transaction will produce cross-margining benefits and other capital efficiencies."
  • Phillip Futures DMCC, an online trading services provider, has been approved as a broker clearing member of the Dubai Gold and Commodities Exchange (DGCX). The company offers clients a variety of financial services, such as stock-broking, share financing, asset management and investment research.
  • CME Group will increase the daily price limits for nonfat dry milk futures to 4¢ per pound, with an expandable limit of 8¢. The price limits for dry whey futures have also increased, to 6¢ per pound for daily price limits and 12¢ for expandable limits.

Technology

  • NYSE Technologies expanded its secure financial transaction infrastructure to the Singapore Exchange’s colocation facility. The move is designed to allow collocated customers to trade in multiple Asian markets through a single access point.
  • Progress Software Corp. and Caplin Systems Ltd. are partnering to integrate the former’s Apama Capital Markets Platform with the latter’s single-dealer platform network. The partnership is designed to provide an end-to-end e-commerce platform across multiple asset classes, which will be accessible from a variety of mobile platforms.

Options

  • Intercontinental Exchange Inc. licensed Markit’s North American and European corporate credit default swap indexes, with the aim of developing futures and options contracts based on Markit’s CDX and iTraxx index families.
  • The Options Industry Council (OIC) and the Shanghai Association for International Exchange of Personnel signed a memorandum of understanding to strengthen cooperation on options research and education.
  • The CBOE Futures Exchange (CFE) plans to launch its S&P 500 Variance futures later this quarter. Similar to over-the-counter (OTC) variance swaps, the contract will allow users to trade the difference between the implied and realized variance of the S&P 500 Index. The CFE also plans to introduce a Lead Market Maker Program for the futures.

Financials

  • NYSE Euronext and Brazil’s Americas Trading Group (ATG) will launch ATS Brasil, a new over-the-counter trading platform for Brazilian stocks. ATG will own 80% of the new venue, and NYX will own the other 20% and provide the technology.
  • Eurex Clearing announced that it will launch Europe’s first central counterparty (CCP) service for the bilateral securities lending market on Nov. 22. Both exchange-traded funds and German and Swiss blue chip equities will be available for pilot customers.
  • E*Trade Financial Corp. announced plans to offer $1,305 million in aggregate principal amount of senior notes in two tranches due in 2017 and 2019. The company will use the net proceeds from the sale to redeem its outstanding 7.875% senior notes (due in 2015) and its 12.500% springing lien notes (due in 2017).

Forex

  • CME Group is expected to offer 30 forex futures products, including currency pairs involving the USD, EUR and CNY when it launches its European bourse next year.
  • Berkeley Futures Limited has been approved as a broker clearing member of the Dubai Gold and Commodities Exchange, adding to the exchange’s international membership base.
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