EXCHANGE NEWSWIRE, 7 September 2012
NDAQ will set up its interest rate derivatives NLX trading platform in London with six products including the German bund and Euribor. Bloomberg also reported that NLX will start with futures based on short sterling, medium-term German government debt known as Bobl, short-term German debt known as Schatz, and a UK government bond. NLX CEO Charlotte Crosswell said that “we are focused on creating competition with incumbent large exchanges,” and “we are going live with lookalike contracts.”
CME and NYSE Liffe signed up to a service with a “kill switch” to limit damage from errant trading by algorithms, the Financial Times reported. This service will allow futures commissions merchants (FCMs) to halt or limit trading activity at high speed if a computer starts to malfunction or a customer breaches risk limits.
Nomura is “placing priority on a strategy to compete” and will implement a $1b cost-cutting exercise, which will concentrate on shrinking the European equities business and focus its business on Asia. The Financial Times also reported that approximately 45% of this round of costs cuts will come from Europe, with Americas comprising 21%, Asia excluding Japan 18%, and Japan 16%.
Newedge group general counsel Gary DeWaal is to retire at end-2012, after 26 years with the group. The Financial Times also reported that DeWaal will move into a special advisor role with immediate effect but will continue to advise on issues in the likes of the implementation of the Dodd-Frank act in the US, and Newedge’s joint venture in China with Citic.
TOCOM open interest for its Gold contract recovered to Pre-Lehman levels of around 150,000 contracts.
Asian regulators, including the central banks of Singapore, Hong Kong and Australia, jointly wrote a letter to CFTC Chairman Gensler warning that CFTC’s proposal to apply Dodd-Frank to cross-border dealing in OTC derivatives may lead to “unintended consequences” for Asian markets. The letter highlighted that market participants outside the US may have to abide by both Dodd-Frank as well as domestic rule, causing “market fragmentation, and potentially, systematic risk”.
CFTC’s proposal for traders to keep audio records that could be used in enforcement cases is being strongly opposed by swap traders, Bloomberg reported. According to Commodity Markets Council President Sanjeev Joshipura, CFTC is still trying to reach a consensus because “it is contentious and may have serious impacts on industry that were not thought through”.