What The Top BrokerDealer CEO’s Are Making Now

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BrokerDealer.com blog up courtesy of extract from InvestmentNews.com.

Data on executive compensation at major Wall Street banks and broker/dealers was released this week by SNL Financial. The data looks at top compensated chief executive officers at firms that are publicly traded. We’ve excerpted the chief executives running firms that manage platforms used by retail financial advisers, from the Charles Schwab Corp. to Wells Fargo & Co.

Total compensation includes salaries, bonuses, perks, incentive plans, stock and option awards, pensions and other deferred compensation, according to SNL, a research firm.
(See also: 10 best-paying indie B-Ds)

Here’s who made the most money in 2013, ranked by total compensation in their industry category as defined by SNL, and how it compares to the year before.

For the full story, please visit InvestmentNews.com

BrokerDealer: Saudi Arabia Outlines Plans to Open Tadawul Exchange to Foreign Investors

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BrokerDealer.com blog update courtesy of extract from 12 Sept article from Zawya, a Reuters service

Plans for new regulations on direct foreign investment in the Saudi Arabian stock market have been outlined, setting out requirements and limits for oversees buyers seeking to buy into the region’s biggest exchange.

On August 21 the Capital Market Authority (CMA) released detailed information on opening up the Saudi Stock Exchange (Tadawul) to foreign investors, following on from the Saudi cabinet’s approval for the initial proposal in late July.

Although this marks a further liberalisation of the market, a series of caps on trading will restrict the ownership levels within individual companies and overall foreign participation on the exchange.

Emerging market status

The combined market valuation of the Tadawul is around $530bn at present, representing about 45% of the total capitalisation in the MENA region. Jadwa Investment forecasts a $40-50bn injection from total foreign inflows beyond the short term.

The initial response to the reform was positive. The Tadawul rose some 10% up to the end of August, hitting a six-year high on August 26 with a surge in the value of shares bought by foreign investors via equity swaps. Since the release of the detailed draft regulations the market has eased off its highs of late August, possibly as investors digest the operational limits the CMA plans to put in place.

Even with the caps, investors will see the opening of the Tadawul to foreign buyers as a significant opportunity. Over the past decade, and despite the downturn in the wake of the global financial crisis, the exchange has shown a return of 120%, according to an HSBC report, issued in mid-August. Investors will also be lured by the strong fundamentals of the Saudi economy and outperformers such as the world’s biggest petrochemical firm, Saudi Basic Industries Corp (SABIC).

“The opportunity set for foreign investors is too significant to pass up given the quality of the corporations and market breadth relative to other frontier markets in the Middle East that come with a higher risk premium attached,” Neil Azous, founder of research firm Rareview Macro LLC, told Bloomberg.

For the full story, please click on this link.

BrokerDealer BATS Seeks New Prez

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BrokerDealer.com blog post courtesy of extract from WSJ

BATS Global Markets Inc. the brokerdealer that operates the BATS electronic exchange platform, has begun searching for a new president just over a month after it forced William O’Brien out of the position, according to people familiar with the matter.

After Mr. O’Brien abruptly departed BATS in July, BATS Chief Executive Joe Ratterman assumed the title of president effective immediately, according to a statement at the time. Mr. Ratterman is based in Lenexa, Kan., while Mr. O’Brien worked out of the firm’s Jersey City, N.J., office.

Since then, the BATS board has decided to look for a new president. The position would likely be based in Jersey City and play a role in acting as a liaison with the company’s owners, many of which are large Wall Street firms based in New York City, and be a public face for the company.

It wasn’t previously known whether the company would seek to replace Mr. O’Brien or leave Mr. Ratterman as both chief executive and president. A spokesman for BATS declined to comment.

One reason for Mr. O’Brien’s departure was a decision by BATS to settle allegations that one of its units gave unfair advantages to high-speed traders, The Wall Street Journal reported last month. Mr. O’Brien declined to comment.

BrokerDealer WhistleBlowers Beware: Arbitration is a Double-Edged Sword

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BrokerDealer.com blog update re the Finra arbitration process is courtesy of extract from 31 Aug New York Times story by Gretchen Morgenson

nytimes logoFive years ago, Sean Martin, a registered representative at Deutsche Bank Securities in New York, saw something troubling on his trading desk.

A few of his colleagues, he said, were letting preferred hedge fund clients listen in on confidential market commentary by the firm’s analysts before their views were made public. He alerted his superiors and was almost immediately given a negative review, a first in more than 10 years at the firm, he said. His bosses also removed him from the group he’d been working with and cut his compensation.

Mr. Martin, who continues to work at Deutsche Bank, said he believed that he was being punished for reporting misconduct and took the one avenue of redress that was open to him. In August 2012, he brought an arbitration case against the firm, contending retaliation and asking to recover his lost earnings. As is typical in the financial industry, his employment contract required that any dispute between him and his employer go through private arbitration, not the courts. Mr. Martin’s matter is being heard by three arbitrators associated with the Financial Industry Regulatory Authority, a self-regulatory organization that operates the largest dispute resolution forum in the securities industry.

But Mr. Martin’s experience with arbitration, both he and his lawyer say, has raised questions of fairness in the process. The three-member panel hearing his case has barred him from testifying about certain crucial aspects of what he saw at Deutsche Bank and disallowed the introduction of documents that bolster his claims. This led his lawyer to conclude that the panel was not interested in specifics of the behavior at the heart of his accusations — and to ask a state court to step in.

“When I filed this arbitration, I expected that Finra would resolve the dispute between Deutsche Bank and me in a fair way,” Mr. Martin, 41, said in a statement provided by his lawyer. “I was surprised and disappointed when the arbitrators refused to listen to important parts of what I wanted to say and rejected or redacted my exhibits. I can’t see how a dispute can be fairly resolved if one party is not even allowed to tell their side.”

To continue reading the entirety of the NY Times article, click on this link

BrokerDealers and Bankers Using James Bond Strategies

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Brokerdealer.com blog update courtesy of extract from today’s WSJ story profiling James Bond style schemes used by bankers and brokers in effort to wrap pending deals and transactions under a cone of silence.

wsj logo“Project Swift” sounds like the name of a military invasion or an Olympic marathoner’s training plan. But it is actually the code name for a corporate buyout, inspired by a private-equity associate’s fondness for singer Taylor Swift.

Labels like Project Token, the name Apollo Global Management APO +0.41% LLC used to mask its purchase of children’s restaurant favorite Chuck E. Cheese, or Project Fusion, the code for Kinder Morgan Inc. KMI +1.23% ‘s consolidation of its oil-and-gas holdings into a single company, are designed to keep reporters, traders and even rival companies from sniffing out deal news before formal announcements are made.

For the young bankers who get to choose them, code names are an amusing diversion from the financial modeling and PowerPoint presentations that fill their days.

But one deal-making powerhouse is putting an end to the name game, opting instead to automate the process to avoid the pitfalls that go with the territory.

Goldman Sachs Group Inc. GS +0.82% now requires bankers to use name-generating software that offers 10 random options like Project Calculator or Project Daniel. The new system has been phased in across the bank over the past two years, according to people familiar with it.

Though bankers can refresh the options as often as they like, some say the new naming process has taken some fun out of the game. And they say people involved in their deals often forget the random names generated by the software.

For the full story from the WSJ, please click here.