High frequency trading probe

Exchange Shorts

The Commodity Futures Trading Commission set deadlines starting May 16 for when package transactions including multiple swaps must occur on the swap-execution facilities (SEFs) operating by firms including ICAP, GFI Group and Cie. Finaciere Tradition SA. According to Bloomberg, CFTC stated that transactions that include swaps and U.S. Treasury securities must meet the requirement on June 16, while other types of deals were given until mid-November.

High Frequency Trading probe: New York’s attorney general Eric Schneiderman aims to subpoena exchanges within days and has requested information from private alternative trading platforms, including dark pools.

FTT: the United Kingdom’s continued objection to the financial transactions tax could restrict the range of instruments to be taxed, but not the extraterritorial effect, according to Kevin Cummings, financial services partner at consultant BDO, Risk.net reported.

ICE expects to launch its new global cotton futures contract in 4Q14, Reuters reported. The contract will include cotton grown in the United States, Australia, Brazil, India, Benin, Burkina Faso, Cameroon, Ivory Coast and Mali, with delivery points in Australia and Malaysia.

ICE: NYSE, NYSE Arca and NYSE MKT were fined a total of $4.5m by SEC for its failure to meet with its own exchange rules designed to protect investors. Forbes reported. According to SEC, violations occurred between 2008 and 2012, and that NYSE and its affiliated exchanges “repeated engaged in business practices that either violated exchange rules or required a rule when the exchanges had none in effect.”

Chicago Mercantile Exchange halted trading in 5-year Treasury futures contracts on Friday for 10 seconds, immediately after the U.S. jobs report data for April was released, Reuters reported.

CME Executive Chairman and President Terrence Duffy stated that HFT reforms should not hurt CME’s futures market as its market structure is different from that of equity markets. Duffy also said that “I think we do a very good job at, is educating the differences in our model versus the equity models. And we didn't do that when Michael Lewis' book came out. We've been doing it for 10, 12 years now."

 

 

About the Author

Bernardo Mariano brings to ERDesk his experience structuring private deals for the acquisition of mutual exchanges. Prior to joining ERDesk Bernardo worked as a Director for Instinet and later, CEO of Reuters' Bondex. He holds an MS in Economics from University of Illinois and an MIA in Finance from Columbia University. He can be reaced at be reached at mariano@erdesk.com. 

Equity Research Desk (www.erdesk.com) provides fundamental analysis of global capital markets related entities to support the investment process of buy-side analysts at hedge funds and traditional money managers. The company focuses its coverage on securities exchanges, discount brokers, trading platforms, asset managers, financial-related technology companies and intellectual property assets in the US, Europe, Asia, and Latin America.

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