Forefront Communications

Forefront Week in Review: September 23, 2018

Forefront

Sam Belden

Sam Belden

Welcome to the Forefront Week in Review, where we take another look at top recent stories from the action-packed world of trading and market structure.

This week saw the regulation of the crypto space take another turn in the spotlight. On Tuesday, the New York Attorney General’s office published the “Virtual Markets Integrity Report,” a 32-page document that asserted that cryptocurrency exchanges are vulnerable to market manipulation and often fail to protect consumers. The report also claimed that nearly 20 percent of Coinbase transactions are attributable to the company itself, prompting the firm to deny its involvement in proprietary trading in a Wednesday blog post. Meanwhile, the SEC once again postponed its ruling on CBOE’s application to trade shares of a bitcoin ETF, forcing bitcoin bulls to wait even longer for the much-anticipated decision.

Other top stories included pioneering overseas day trader Simon Librati’s banishment from the US brokerage industry and Visible Alpha’s hire of Mark Hale, the former COO of FactSet.

This week’s Week in Review features stories by Dave Michaels of the Wall Street Journal, John McCrank of Reuters and Hayley McDowell of The TRADE, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Trading Digest if you’re not on our list already.

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Broker News

Tourmaline Enhances Buy-Side Commission Spend Web Reporting
Traders Magazine | John D’Antona

Tourmaline Partners, one of the world’s leading outsourced trading solutions firms, today announced the addition of an “execution dashboard” to its client website to provide its buy-side clients with greater transparency into their total broker research spend. Now, in addition to providing comprehensive trade detail and aggregated CSA (commission sharing arrangement) administration, Tourmaline tracks and reports each client’s total broker spend, combining all broker CSA payments and attributed trading.

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Exchange, ATS and Clearing News

Cboe Exchange Turns to Machines to Police Its ‘Fear Gauge’
Reuters News | John McCrank & Saqib Iqbal Ahmed

Hard pressed to quash allegations that its popular “fear gauge” is being manipulated, Cboe Global Markets is turning to AI to help put those concerns to rest. The exchange, which owns the lucrative volatility index the VIX, has taken several steps to confront manipulation claims that have helped drive the Cboe’s stock down about 15 percent this year, putting it on pace for its worst year ever. In its latest effort to police trading tied to the index, the Cboe is working with FINRA to develop machine learning techniques to tell whether market conditions surrounding the VIX settlement are potentially anomalous, the exchange told Reuters.

[minti_button link=”https://www.reuters.com/article/us-cboe-vix/cboe-exchange-turns-to-machines-to-police-its-fear-gauge-idUSKCN1M00HX” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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Vendor News

Visible Alpha Hires FactSet’s Former Operating Chief
The TRADE News | Hayley McDowell

Investment research specialist Visible Alpha has hired the former chief operating officer at FactSet in the same role for a newly-created position. Mark Hale had been with FactSet for more than 22 years in various senior roles, most recently as chief operating officer and executive vice president. He led the firm’s global teams focused on product management, technology and infrastructure, and IT. At Visible Alpha, Hale will be responsible for overseeing the company’s engineering, product, content management, operations and technology teams, which altogether consist of 450 professionals.

[minti_button link=”https://www.thetradenews.com/visible-alpha-hires-factsets-former-operating-chief/” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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Buy Side News

“They Tend to Be a Little Psychopathic in That Way.”
Institutional Investor | Christopher Haire

Poker requires some of the same skills as playing the stock market — the ability to quickly calculate probability, extrapolate known data to predict future events, and not sweat losing money in the short term — but offers enough differences that many investors over the years have been so lured by the game that they either left Wall Street to turn pro or have competed so regularly in marquee events that they could be termed quasi-professionals.  That’s why each summer, dozens of current and former investors flock to Las Vegas to compete in the World Series of Poker, a month-and-a-half-long series of tournaments at the Rio All-Suite Hotel and Casino.

[minti_button link=”https://www.institutionalinvestor.com/article/b19zw18sb506j3/They-Tend-to-Be-a-LittlePsychopathic-in-That-Way” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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M&A/Investment News

The CME/NEX Merger: Efficiency or Chaos?
TABB Forum | George Bollenbacher

The Treasury market in undergoing a complex transformation that has seen the rise of HFTs as liquidity providers and the growth of electronic trading, among other changes. Amid this upheaval, the CME/NEX merger could be a game changer, reports George Bollenbacher, who looks at some of the possible impacts of the deal.

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Regulatory & Legal News

A Czar of Overseas Day Trading Is Banned From U.S. Brokerage Industry
Wall Street Journal | Dave Michaels

A pioneer in the lucrative business of overseas day trading was banned from the U.S. brokerage industry Monday, the latest target of a government campaign to root out alleged manipulation in American markets stemming from foreign trading floors. The trader, Simon Librati, agreed to a five-year suspension from 10 U.S. stock exchanges and a $400,000 fine, according to disciplinary settlements with U.S. regulators resolving a nearly five-year investigation of his firms’ trading. The outcome ends Mr. Librati’s ability to control or work for a U.S. brokerage firm, although it doesn’t bar him from trading personally.

[minti_button link=”https://www.wsj.com/articles/a-czar-of-overseas-day-trading-is-banned-from-u-s-brokerage-industry-1537208394″ size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More ($)[/minti_button]

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Blockchain & Crypto News

Coinbase Denies Trading Cryptocurrencies for Its Own Benefit
CNBC | Arjun Kharpal

Cryptocurrency firm Coinbase has denied engaging in proprietary trading after the New York Attorney General said that almost 20 percent of transactions on its platform were attributable to the company. The denial comes after the New York Attorney General released the “Virtual Markets Integrity Report,” which highlighted concerns over the current cryptocurrency trading situation. The report raised issues over platforms’ ability to stop abusive trading activity and protect customers’ funds.

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That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.