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January 25, 2013

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House proposal calls for annual taxes on derivatives gains
House Ways and Means Committee Chairman Dave Camp, R-Mich., says he wants to streamline the complex system for taxing derivatives, including a proposal to require annual fair-value assessments of investors' derivatives contracts, with income taxes due on any gains. Camp's proposals brought criticism from the financial industry. Bloomberg (1/25), Reuters (1/24), The Wall Street Journal/Washington Wire blog (1/24), The Hill/On The Money blog (1/24)

Sommers resigns abruptly from CFTC
Jill Sommers, a Republican member of the Commodity Futures Trading Commission, says she will resign at the end of this quarter. Sommers, a commissioner since 2007, led the CFTC's investigation of MF Global Holdings. "I think for me personally it is the right time to leave," she wrote in an e-mail. The Wall Street Journal (1/24), Bloomberg (1/25)

Former prosecutor is picked to lead SEC
President Barack Obama has nominated former federal prosecutor Mary Jo White to lead the Securities and Exchange Commission. White, who is in private practice, was the first woman to serve as U.S. attorney for the Southern District of New York and also has been on the board of Nasdaq OMX Group. The New York Times (tiered subscription model)/DealBook blog (1/24), Pensions & Investments (free registration) (1/24), The Economist (tiered subscription model)/Schumpeter blog (1/24), The Wall Street Journal (1/25)

Margin Savings up to 90% for Cleared OTC IRS vs. Futures
90% is no small number - especially when it comes to margin savings. Market participants have been actively utilizing portfolio margining of Cleared OTC IRS and Eurodollar and Treasury futures, and total risk reductions now account for over $1 billion in initial margin savings - figures that remain unparalleled in the industry. Click here to learn more.

Regulatory Roundup

European clearinghouse rules might face delay
The European Securities and Markets Authority's plan to strengthen derivatives regulation could be postponed by a European Parliament vote next month on whether to reject proposed technical standards. Financial Times (tiered subscription model) (1/24)

Survey: Firms aren't ready for OTC regulations
The bulk of the financial-services industry is unprepared for coming regulations for over-the-counter derivatives, a survey by IPC Systems indicates. Thirty-six percent of companies said they don't have a plan for dealing with new regulations, and 62% said what they have in place is inadequate. Wall Street & Technology (1/24)

Energy swaps tapped futures amid regulations
An effort to rein in swaps has been undercut because energy swaps have migrated to futures exchanges to avoid regulatory uncertainty, Matthew Philips writes. "All these people left the swaps market due to regulatory uncertainty and confusion. That is fundamentally a big problem with the swaps rules," says Scott O'Malia, a member of the Commodity Futures Trading Commission. Bloomberg Businessweek (1/24)

Commentary: Investors need better protections
A consolidated audit trail is among six reforms that could help the financial industry earn back investors' confidence, ITG CEO Bob Gasser writes. Financial Times (tiered subscription model) (1/24)

Other News

Gorman: The big regulatory challenges have been "dealt with"
CNBC (1/23)

Industry Developments

Faber: Euronext could get a "cautious" look from Deutsche Boerse
Deutsche Boerse would cautiously consider acquiring Euronext if it is offered for sale, Chairman Joachim Faber says. "Everybody will have a look at it, but we will appreciate whether this makes sense for the organization and particularly also for our shareholders," Faber said. Bloomberg Businessweek (1/24)

Adequacy of protections for FCM customers is questioned
Alexander Osipovich examines the steps to protect customers of futures commission merchants after the collapses of firms such as MF Global and PFGBest. Risk.net (subscription required) (1/24)

CME trader Barry Lind dies after being hit by car
Barry Lind, a trader who helped transform the Chicago Mercantile Exchange from an open-outcry market to a modern electronic exchange, has died from injuries suffered when he was hit by a car in Rancho Mirage, Calif. The Futures Industry Association named him to its Hall of Fame in 2005. Chicago Sun-Times (free registration) (1/25), Bloomberg (1/24)

Other News

China reportedly picks foreign investors for futures
Bloomberg (1/24)

WFE data: 2012 saw a 20.4% decrease in volume for listed derivatives
The Trade News (U.K.) (1/24)

Electronic Trading News

New technical problems deepen worries about U.S. share trading
Concerns about whether all investors are being treated equally on U.S. exchanges are deepening with each new report of a technical glitch. Three market operators recently reported problems. Financial Times (tiered subscription model) (1/24)

Other News

OZ Minerals chief Terry Burgess says HFT is hurting company's share price
Brisbane Times (Australia) (1/25)

Commodities and Managed Futures

Analysis: Stimulus extends commodities' run
Commodities' decadelong bull run seems to be intact, Ansuya Harjani writes. Eugen Weinberg of Commerzbank says that with "the combination of the economic recovery ... and continuing support from central banks ... it's going to be a good year for commodities." CNBC (1/25)

Other News

Steel derivatives in Asia see weak demand
FinancialCAD (Canada) (1/24)

High sugar output brings lower prices, largest stockpiles since 2000
Bloomberg Businessweek (1/24)

SmartQuote

In youth we learn; in age we understand."

--Marie von Ebner-Eschenbach,
Austrian writer

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