Chicago based FCM and its officers fined: Supervision & Risk Issues
Jerry Leterman
CFTC Press Release PR7449-16 CFTC Orders Chicago-based Advantage Futures LLC, its CEO Joseph Guinan, and Former Chief Risk Officer William Steele Jointly to Pay a $1.5 Million Civil Monetary Penalty for Supervision, Risk Management Failures, and Making Inaccurate Statements in Required Filings with the CFTC Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Advantage Futures LLC (Advantage), a Chicago-based Futures Commission Merchant (FCM), for failing to diligently supervise
Read More
COMEX Rule 413.A: Summary Access Denial Actions
Neurensic
413.A. Authority to Deny Access The Chief Regulatory Officer or his delegate, upon a good faith determination that there are substantial reasons to believe that such immediate action is necessary to protect the best interests of the Exchange, may order that: 1) any party be denied access to any or all CME Group markets; 2) any party be denied access to the Globex platform; 3) any party be denied access to any other electronic trading or clearing platform owned or
Read More
Neurensic Partners with Vine Street Trading to Provide Compliance and Surveillance Capabilities
Neurensic
CHICAGO, September 16, 2016 -- Neurensic, a fintech artificial intelligence (AI) startup, today announced that its CORE™ product has been selected by Vine Street Trading for its market surveillance and compliance capabilities. Vine Street Trading is a Chicago-based, principal trading group that has focused primarily on electronic futures markets throughout its 10 year existence. “We are proud to partner with an established market maker with complex futures trading strategies in Vine Street Trading,” said David Widerhorn, founder and CEO of
Read More
Quote Stuffing Disrupting Markets
Neurensic
Is the price you are seeing on your investment screen the current price? How do you really know? What if you are an algorithmic trader? Is that price and size really there? Quote stuffing is a messaging pattern designed to disrupt normal market operations by introducing latency and increasing bids and asks into an exchange. This method of market manipulation is intended to give other market participants a deceptive view of the market depth, liquidity, and range. Quote stuffing may
Read More
https://www.flickr.com/photos/franciscojgonzalez/8085342806/in/photolist-JqZLJR-9Zndzg-3UkZ7L-3UgFvn-3UkZno-6ZfBuw-5vSbQh-djtuJb-fcAfdv-4fDFt5-KuRpv-73SzbZ-ovq3LT-eZvhdh-pxQaD6-4pMEhB-aNjSYn-9atiAk-5xBt9k-6BKt1p-5xFRAb-5xFRib-5xBtmR-5xBtfV-5xFRpE-9h2eWD-5xBt4r-68gTtx-5xBsLF-5xFRmW-mNaicK-5xBsPD-5xFRGs-bU4PSX-5xFRNA-KDcev-5ndqLV-C3wMud-rwt2oc-ChBc7D-rwnx79-rf28pc-rd9HS6-rwny8Y-CVqaXU
Wash Trading isn’t Victimless
Neurensic
  Wash trading is defined by the Chicago Mercantile Exchange in rule 534 as trading where the trader knows that no change in beneficial ownership occurs. In wash trading there is no market risk, and no price discovery for the beneficial owner.  The Intercontinental Exchange (ICE) definition is very similar in their rule Exchange Rule 4.02(c). In 2014 CFTC Director of Enforcement Aitan Goelman stated: “Illegal wash trades may seem innocuous. They are not.  They provide misleading signals to the
Read More
FIX Trading Community develops standards for MiFID II transaction and trade reporting 
Neurensic
MiFID II Transaction Reports to Approved Reporting Mechanisms (ARMs).Under MiFID II, all investment firms (including certain buy-side institutions) executing transactions in financial instruments are required to report details of their transactions to the national regulator as quickly as possible, and no later than the close of the following working day.  At the recently held FIX EMEA Trading Conference, nearly 70% of respondents stated that use of the FIX Protocol would be their preferred standard for these reporting requirements to ARMs
Read More
New CFTC trading rule is ‘extreme overkill’
Neurensic
The former CFTC commissioner Bart Chilton went on record with CNBC saying that the Source Code requirements in Regulation Algorithmic Trading (REG-AT) is extreme overkill and a very slippery slope. Many in the listed derivatives trading industry strongly believe that ideas and methods that are expressed in our Source Code is critically important and extremely sensitive. It is our proprietary information. As such it should be provided with the utmost the highest level of legal (and governmental) protection. Requiring the
Read More
Who Needs Regulators when you have Fair Market Champions?
Neurensic
Erik Hunsader, the founder of Nanex, has been a frequent watcher of the markets. His twitter feed often has screenshots of suspected spoofing and market manipulation. Reuters declares him as “an outspoken critic of high-frequency traders.” Yet if you follow him on twitter you will see that he isn’t really outspoken. Rather he seems to be more of a fair market champion. Trading Industry Compliance Structure Countries have regulators to oversee their country markets. Exchanges, working as Self Regulatory Organizations,
Read More
Industry Help Needed: Data Scientists
Neurensic
In looking at compliance officers (from the buy side, sell side, exchanges, and regulators) I saw only one person with a background in data science, machine learning, decision science, statistics or other data analysis discipline. Granted, my search was wholly unscientific. My college professors in Decision Science at Indiana University would give me poor grades. I simply looked through the background of three dozen LinkedIn compliance officers in my own personal network. Backgrounds observed in my research showed people who
Read More
Global Regulators Looking Past the CCO
Neurensic
1) Canadian Regulator: you “ought to have known” your traders where spoofing. 2) NY: Broker Dealer removes 2 from their supervisory role. 3) CFTC: Adds new Regulation Algorithmic Trading with new role of “AT Person” 4) FCA: Adds new new watch on senior managers 5) FINRA: Supervisor barred from supervising after case of market manipulation   Globally, my peers in the industry seem to all agree that the liability of managers is greatly increasing. Consider the following news: The Canadian regulator’s
Read More