1 – 7 AUGUST 2013
The rise in hedge fund AuM – along with inflows from credit, fixed income, equities and multi-asset products – helped contribute to net new assets for the second quarter of CHF1.5bn ($1.6bn). The bank reports AuM of CHF1.3trn ($1.4trn) at the end of the first half. The results come after JP Morgan reported net revenues of more than $1bn for its securities services during Q2, while Citi saw a rise in its net income for the division housing Citi Prime Finance. EXCHANGES & ATSs
CBOE expands QCCs, cuts e-DPM program
The Chicago Board Options Exchange has plans to expand the application of the qualified
contingent cross orders type it offers to include more legs, the exchange stated in a notice to members. CBOE said it has traditionally allowed only single-leg QCC orders to be entered on its system but, starting August 1, it will allow multi-legged QCC orders. The change will be applicable across all multiply-listed classes, as well as ETF, ETN and HOLDRS option classes, the notice states. With the modification, the exchange said it will allow penny increments for the multiple-leg QCC orders. Single-leg orders must still be entered using standard increments for pricing. Separately, the exchange told the Securities and Exchange Commission it plans to eliminate its Electronic Designated Primary MarketMaker Program. Market makers in this category had the option to function as designated primary mar-
ket makers remotely and share in the participation rights for allocated classes with responsibilities similar to DPMs. But CBOE told the SEC the category isn’t necessary from a competitive standpoint. “[T]he growing prevalence of preferred market-maker routing has rendered the initially unique tenets of the program less relevant to the e-DPMs (all e-DPMs are also PMMs, and PMMs have many similar characteristics and obligations to DPMs),” it said. The program will be decommissioned systematically, it said, and a notice will be issued at least two weeks prior to the defined end date. The planned delay will give firms time to determine how to proceed, CBOE said. “The exchange anticipates that most, if not all, e-DPMs will remain TPHs on the exchange in a PMM or regular market-maker capacity.”
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POST-TRADE
BNP Paribas Securities Services plans to educate on AIFMD
NP Paribas Securities Services is gearing up to help educate asset managers in the US about the Alternative Investment Fund Managers Directive (AIFMD) now that the directive has taken effect, according to comments from Andrew Dougherty, managing director and head of alternative and institutional solutions. The unit has traditionally provided the services that are needed under AIFMD, such as depositary bank oversight and an independent risk management function that it enhanced for additional complexity. Dougherty noted the focus for the servicing unit now is to provide information to US managers that may have wanted to expand but don’t understand how to become compliant or the benefits of the rules. “Alternative asset management companies have looked at Europe as having strong distribution potential for future
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growth and I think that all of this talk about AIFMD and changing regulation has made a lot of managers put their growth plans on hold, and maybe purely because of that lack of understanding,” he said in an interview. BNPSS has already held events in New York to discuss AIFMD compliance and certification, and more are scheduled for later this year, according to his comments. “Now that the gauntlet has dropped, if you will, and we are in a different regime than before AIFMD, you will begin to see a lot more of these things happen in terms of educational seminars and webinars because everything is in the process of being
adopted and put into law at the individual member states level,” he said. “You no longer have a choice of waiting to see what happens – it is happening as we speak.” The firm will also “engage with fund managers across the US to help them develop a better understanding of AIFMD,” he said.