Week InReview | TYOP, TOL, LDL... telltale trader acronyms hint at illegal activity | NYSE parent's income stream sets up clash with clients | IOSCO: U.S. alone in completing money market reforms | Three Fed indices show tightest financial conditions since 2012 | Death Crosses, Flash Boys, and Hallucinating Robots in Binge Reading Disorder
Friday, September 4, 2015
TYOP... TOL... LDL...
Telltale trader acronyms hint at illegal activity
(Sep 3) Prosecutors combing through the e-mail transcripts of Wall Street traders suspected of illegal activity are looking for telltale acronyms that hint at suspicious activity. TYOP (tell you on phone), TOL (talk offline) and LDL (let's discuss live) are red flags according to defense attorneys and current and former prosecutors who agreed to speak on condition of anonymity. Phrases such as "call my cell" and "let's go off e-mail" remain popular among the people who plot insider trades or the rigging of some of the world's biggest markets. New expressions and acronyms pop up all the time, and authorities say they build lists of favored terms. Investigators for the Securities and Exchange Commission and Justice Department get so many e-mails they can't possibly review them all without using their Control-F search function, said the attorney who prosecuted Raj Rajaratnam - the fund manager convicted in 2011 of insider trading - when he was with the U.S. Southern District. Homing in on a suggestion to go off e-mail is usually only the start. Authorities then have to go through hours of records to gather evidence that a crime was committed.
NYSE parent faces opposition to licensing & fee plans
(Aug 28) New York Stock Exchange parent and owner of some of the world's biggest derivatives markets, Intercontinental Exchange, is facing opposition to a plan to generate income by licensing tech patents and raising fees for market data. The company has asked its biggest customers what they're willing to pay for licenses to trading-technology patents it bought a year ago. The patent effort marks the latest time ICE has attempted to increase profits from something other than the traditional business of an exchange: helping buyers meet sellers. ICE has also stirred up controversy by raising fees for market data. The SEC's Equity Market Structure Advisory Committee has begun discussing whether the agency should regulate how much exchanges can charge for market data. Officials at IEX Group Inc., which has billed itself an alternative to the complex way modern stock markets operate, are among those who have protested the fact that stock exchanges oversee and set prices for market-data offerings.
U.S. alone in completing money market reforms
IOSCO report finds
(Sep 2) Of the five top jurisdictions in the world for money market fund activity, only the U.S. has adopted final measures in all eight areas of reform that were recommended three years ago by the International Organization of Securities Commissions, IOSCO said in a report.  The report's findings could prompt other key MMF jurisdictions to follow suit and adopt IOSCO's recommendations. The group said it would update its report in 2016. The four other largest markets for MMFs - Ireland, China, France and Luxembourg - reported they were 'still in the process' of developing and finalizing reforms. France is just behind the U.S., with rules adopted in all areas of recommended reform except liquidity management, although draft measures have been published. China has the most work to do of the five, with no drafts published in two areas of recommended reform. Meanwhile, four smaller MMF jurisdictions - Brazil, India, Italy and Thailand - also reported having final rules implemented in all key reform areas, like the U.S.
Tightest financial conditions since 2012
Three Fed indices show
(Sep 2) The boost the economy is getting from easy access to finance is beginning to fade. That's a headwind for Fed officials to consider when they meet Sept. 16-17 to debate the timing of the first interest rate increase since 2006. A number of measures of U.S. financial conditions and financial stress compiled by regional Federal Reserve banks are signaling the tightest readings in three years. Data released by the Chicago Fed after the recent sell-off in stock and bond markets, showed a rise in risk premiums coupled with a deterioration in leverage and credit conditions in the week through Aug. 28, all of which propelled the bank's National Financial Conditions Index to its highest level since November 2012. When Fed officials last submitted updated quarterly forecasts at their meeting in mid-June, 15 of the 17 members of the policy-setting Federal Open Market Committee projected it would be appropriate to begin raising rates in 2015. The financial conditions indexes suggest there may now be less urgency at the Fed to start tightening via increases in their benchmark federal funds rate.
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