April 04 2016

elb2Barely a fortnight to go before ICDA’s Blockchain extravaganza. To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUNG320” to claim your discount. Here is a link to More Info. I look forward to seeing you there!

The LSE is under siege and it is showing. In an interview with the Daily Telegraph, XavRol makes a series of pronouncements which suggest either the air has got a bit stale in the bunker or he has been spending too much time sniffing the coffee grinds on his tea trolley. Now that his title is, in effect, little more than EVP of ‘Handshaking for Antitrust, General ShowPony & Would you like milk in that?”  It is worrying to consider that Mr Rolet has perhaps mixed “burning” with “burnishing” on the reputation stakes.

BATS is preparing to list once again, I hope it goes better this time around. Interesting discussion around the topic of LBMA and its future, from Platts. Meanwhile last Friday I liked MondoVisione’s concept of slow clearing with a lazy Blockchain but William Mitting produced the best parish April Fool coherently spoofing that MIFID III May arrive before MiFiD II. Makes sense to me.

Okay scroll onwards and to pith, have a great week:

Public Markets

Xavier Rolet: Tie-Up Between LSE & DB1 Is Best Deal On The Table

James Quinn – Daily Telegraph

LSE CEO Dismisses American Suitor As Slash And Burn Interloper’

James Quinn – Daily Telegraph

LSE’s CEO, Xavier Rolet, has dismissed the owner of NYSE as a “slash and burn” organisation which would throw parts of the British bourse “in the bin”.

PLY: Why is XavRol so eager to push the DB1 acquisition of LSE “merger of equal desperation?” Admittedly his political line describing it correctly as “the best deal on the table” is as elegant as his deft investor call avoidance of the stringent witterings of CarKen quoted in my AntiTrust Twix video.

Moroever, why the GUBU rant against ICE? Perhaps it exemplifies the classic shoulder chip of the salaryman when confronted with a true entrepreneurial great? Yes, Xavier has done many deals but he still looks like an ‘also ran’ compared to the Sprecher machine which increasingly defines our parish. Is it a vestige of pent up frustration that in the end, XavRol now begins to realise he was just a highly remunerated pawn in the LSE’s long history?

Let’s face it, ICE acquire lots of things and then integrate them sensibly, bedding down as they strategize the next deal. They also did Europe’s equity markets a huge favour by pre-empting antitrust aggravation (a lesson XavRol will painfully learn soon to his – for want of a better English word – chagrin) and selling off Euronext. Where was the value destruction in giving the new entity a cornucopia of derivatives and related products? Moreover in expelling Euronext from Dunc’s European frat house, the message was clear: grow up and fend for yourselves! The utterly dysfunctional Euronext rose to the challenge and made a coherent business from what was previously a political pig’s ear.

Despite his impetuous micromanagement, I did think Xavier Rolet was good for LSE but on balance, these sorts of rantings leave a huge question mark over his legacy and indeed only encourage those who enjoy such quests, to take the balance sheet apart. I know many are worried that beneath the headlines the actual financial state may not look as impressive as is often claimed. Listening to these rather odd statements won’t kill those rumours. Moreover, he who throws stones in glass houses about poor integration may yet find a lamp post in his eye as the good book says. Last week it was clear DB1 can’t cope with the mess they have unleashed in the media. Now, LSE is clearly showing how much it is under pressure.

LSE ‘Merger Of Equals’ Takes A Battering As Those Involved Begin To Realise The Flaws

Alex Brummer – Daily Mail

Stop Germans Taking Over LSE, Urges Tory Grandee

James Burton – Daily Mail

QV Premium: DB1-LSE Merger Brief.

 

Call For A Delisting Mechanism For HK’s Third Board (subscription)

Enoch Yiu – SCMP

 

MEPs Demand Better Co-Ordination Of Financial Supervision (subscription)

James Rundle – Financial News

The way financial rules have been made and enforced since the credit crunch is too fragmented, according to a committee of the European Parliament.

 

MOU Introduces A New Twist To The Story Of London’s Gold Market

Platts

London, the traditional home/hub of the world’s gold trade, could be slowly losing its grip on power as more and more of the world’s physical gold moves from London’s vaults to Asia, chiefly China. This part of the story isn’t really anything new. But recent news about a memorandum of understanding provides a new option for the story to develop.

PLY: A cynic might remark that the gold is heading increasingly to Asia but the trading paper seems to be staying in London. Interesting background as LBMA faces a classic Innovators’ Dilemma and various pleasantly monopolistic practices are looking tricky to maintain.

Private Markets

IDBI Bank Pares Stake In NSE

VC Circle

DBI Bank sold 900K shares March 30th, a 2% stake in NSE  to India’s largest insurer LIC. Terms were not disclosed. IDBI retains a 3% stake in NSE.

QV Premium: India – NSE Sales Brief.

 

Bats Global Markets Set To Test Water Over Second Listing Attempt (subscription)

Nicole Bullock – Financial Times

Bats Global Markets could launch a marketing blitz as early as next week in its second attempt to list as the exchanges operator pushes forward with going public.

 

SIX Gains Long-Awaited Clearing House Approval (subscription)

James Rundle – Financial News

Swiss clearing house SIX x-clear, owned by SIX Securities Services, has finally gained approval to offer clearing services throughout the EU after a two-and-a-half-year wait.

PLY: And how credible does such a delay make EU regulators look?

 

Sebi Spotlight On BSE, NSE ‘Dark Fibre’

N Sundaresha Subramanian – Business Standard

The Union finance ministry has asked Sebi to probe the alleged “dark fibre links” between BSE and NSE, and has been informed, in turn, that a “preliminary fact finding” exercise is already underway.

PLY: Looks like some skullduggery has broken out amongst Indian brokers and the HFT opportunity…

 

Thai Bourse & Listed Companies Support Government Policy To Strengthen SMEs

MondoVisione

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL slightly off as government makes a coherent move:

Govt Seeks To Restrain FTIL From Selling Assets

Business Standard

To protect the interest of investors in the scam at NSEL, the government has moved the Supreme Court seeking a restraint on parent firm FTIL to prevent possible “asset stripping”.

PLY: I still disagree with the forcible merger but given past statements by FTIL management that payments would be sorted for NSEL by, oh let me see now, is it really two years ago? …Government is right to stop FTIL spiriting any assets or money away.

NSEL Case: HC Panel Calls For Audit Of Investor Claims

Jayshree P. Upadhyay – Livemint

QV Premium: NSEL Scandal Brief – Part 16, NSEL-FTIL Merger Brief and FTIL Stakes Sales Brief.

Technology

Trading In Eight Stocks Suspended Friday: NYSE ARCA

Reuters

 

Miami International Holdings – Data Center Migrations/Disaster Recovery Relocation/Latency Equalization Plans For 2016

MondoVisione

Products

Investors Shun ICE’s World Futures Contracts (subscription)

Gregory Meyer – Financial Times

The cotton market may be global, but international commodity merchants are showing a preference for cotton futures contracts that are local. Volume in ICE’s world cotton futures, backed by bales from nine countries, has evaporated since their debut five months ago. Four in five trading sessions saw no transactions in February and March.

PLY: Very interesting. That raises a whole host of design questions which have piqued my attention. Nor by any stretch do I believe this is the end of the story.

 

The Buy Side Has Never Had It So Good

John Brazier – Waters Technology

The buy side has plenty of options for bond trading, it’s a matter of making the right decisions.

 

Banks, Investors Push EU to Fix Flaws in ABS Market Revival Plan

Rebecca Christie – Bloomberg

EU efforts to revive the asset-backed securities market and boost financing for small businesses could falter if repairs aren’t made to its plan for a new class of “simple, transparent and standardized” products, some of the biggest financial firms in the 28-nation bloc said.

 

IOSCO Updates Information Repository For Central Clearing Requirements For OTC Derivatives

MondoVisione

Career Paths

Bloomberg reports that Stephen Schuler, a co-founder of speed-trading firm Getco, has resigned from the BoD of KCG Holdings, the company created when Getco combined with a struggling brokerage. His departure comes after Daniel Tierney, the other co-founder, left the company’s BoD in December.

Financial Calendar

Toronto SE (TSX) & TSX Venture Exchange (TSXV) will launch this year’s TSX Ignite live event series in Toronto on Wednesday, April 6 – press release

New! – 27.04 – BGC Partners Q1 2016 Results

New! – 12.05 – Euronext AGM – press release

All forthcoming exchange / investment related events are now listed in our Events page.

Other stories

Ex-Barclays Five Face Libor-Rigging Charges

Marion Dakers – Daily Telegraph

The criminal trial of five former Barclays bankers accused of conspiring to manipulate Libor starts this week, in the latest case in the lengthy global probe into benchmark-rigging to reach the courts.

PLY: The reputation of the UK’s high spending, low achieving Serious Fraud Squad is on the line.

 

ESMA Publishes Updated Q&A On The Market Abuse Directive “MAD”

MondoVisione

 

ISDA Announces Annual Determinations Committees Outcome

MondoVisione

 

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