April 05 2016

elb2As Exchange Invest races to pixel, I am unable to confirm that management at LSE are hearing the voice of the late Erik Bauersfeld (RIP) echoing through the corridors of Paternoster Square… Bauersfeld voiced Admiral Ackbar including the memorable line “It’s A Trap!” from that great film “Return of the Jed-ICE.”

Short term, LSE will be celebrating a move towards speeding up open access – the process which will make execution platforms a zero cost business and see all fees concentrate on the CCP. The ultimate pyrrhic victory.

BATS IPO is on while the SEC is highlighted in the pinko for seeking to kill overseas interest in US equity options through their clumsiness.

There’s still time to sign up for the ICDA Blockchain extravaganza. To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUNG320” to claim your discount. More Info here, I look forward to seeing you there

Finally, April 21st, I have a flying visit to speak at a breakfast organised by I-Cham the International Chamber of Commerce, in Dublin, Ireland, all about investing in CEE and SEE markets, including the new SEE link from EBRD. All welcome, if you are in Dublin, you can book here.

Public Markets

US Predator Seals Funds For £10bn LSE Bid

Mark Kleinman – SKY News

ICE has reached agreement with Morgan Stanley, Wells Fargo and Japan’s Mitsubishi UFJ to provide part of the debt that will be required to finance an offer for LSE.

PLY: Other lenders expected: which rather makes one wonder quite what all that street sweep achieved, other than making DB1 and LSE look less like mature role models for public quotation which ought to be permitted any element of self-regulation.

I still do not see how either DB1 or ICE can secure the golden assets of LCH.Clearnet albeit the excitement of an outbreak of proper integration amongst LSE assets would be a joy to behold after the duct tape haste of recent times.

QV Premium: DB1-LSE Merger Brief.


MiFID II – ESMA: No Need To Temporarily Exclude ETDs From Open Access To Trading Venues & CCPs


EU Watchdog Backs More Competition In Derivatives Clearing

Huw Jones – Reuters

…marks a victory for LSE and LCH.Clearnet, along with ICAP and Nasdaq, who wrote to ESMA in March last year asking it to back open access for ETDs.

QV Premium: Homer Simpson & The Supermodel Buffet – aka a Guide to Clearing in the New Era, Sometimes You Need A Plumber, Open Clearing: A Paradismal Shift By LCH, LCH Opens Swingers Club.

PLY: Entirely pyrrhic, all execution platforms will tend to zero in the silos, to account for greater competition and thus only value additive solutions may work – that means ICAP may have a ghost of a chance here but the cheap copycats will be out of luck, again.




Request to supplement the agenda of the EGM scheduled for 26 / 27.04.2016… (Same request was sent by the same shareholder, SIF Transilvania, to SIBEX too, to supplement the agenda of the EGM scheduled for 28 / 29.04.2016).

SIF Transilvania owns 8.57% of BVB and 5.12% of SIBEX. QV Premium: BVB – SIBEX Merger Discussions.

PLY: Thus BvB is gifted SIBEX (a rather empty vessel) after various incarnations of dubious and outright incompetent management. As the world moves to compete, Romania steps backwards.  Apart from board member Otto Naegeli, BvB is broadly bereft of derivatives understanding so probably will struggle to redevelop that part of the market which was dealt a death blow by the Sima scandal. A great shame, there is a dynamic economy in Romania trying to escape the straitjacket of the blob.


European Banks Face US Capital Hit Unless Rules Converge (subscription)

Philip Stafford – Financial Times

European banks may be forced to hold another $5bn of regulatory capital to trade equity options in the US unless transatlantic regulators can strike a deal to close a gap in markets rules.

PLY: #Moronic. Just shows that it is not only the EU which is blithely incapable of delivering common sense regulation, this is a moment of great potential shame for the SEC.


ESMA Updates Its EMIR Q&A



Eurex Clearing Adds Further Platform To Its Lending CCP – EquiLend Launches Connectivity Services



EPEX SPOT SE: Clearing For UK, Dutch & Belgian Power Spot Markets Successfully Migrated To ECC


Private Markets

BATS Global Markets  Announces The Launch Of Its IPO


BATS Global Markets Plans To Price Shares At $17 To $19

Leslie Picker & Chad Bray – NY Times

The company on Monday began its so-called roadshow to test investor demand for its shares at various price levels. BATS’ shareholders, including Bank of America and the Knight Capital, plan to sell 11.2 million shares at $17 to $19 each, according to a securities filing on Monday.

At the midpoint, the IPO would be about $202 million, twice the size of the attempted deal in 2012. The company is seeking a valuation of about $1.7 billion. Like last time, BATS is listing its shares on its own exchange.

Bats Listing Offers Up A Test (subscription)

Maureen Farrell & Austen Hufford – Wall Street Journal

Bats launched its long-awaited IPO after the abrupt cancellation of a prior attempt, in what will serve as a test of both its own exchange and the broader new-issue market.

PLY: I think it is both good and to some degree a delightful irony that the IPO drought is being partly broken by the public launch of a rival market structure business, on its own platform… I wish BATS every success although it remains to be seen how the company copes with the move from bank control to being fully public.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX small off, FTIL off 1%.


Don’t Let a Wine Week Be Data-Weak

Max Bowie – Waters Technology

With wine, this can actually be quite enjoyable—testing your palettes and trying to guess which is which. But with data, the same dilemma can cause major issues. Imagine if prices arrive in your systems out of sequence: first, you might accidentally trade on a stale price, and second, you may not be able to immediately tell which way the price is moving.


BIST Readies Equities Analytics (subscription)

Max Bowie – Waters Technology

Borsa Istanbul (BIST) will roll out a suite of equity market data analytics from June 1, to provide investors, market makers, algorithmic and high-frequency traders, and risk managers with “vital” information on market conditions based on real-time order book data.


NZX Poised To Announce Milk Futures Contract Aimed At Farmers

Jamie Gray – NZ Herald

NZX is expected to announce plans for a new milk futures contract tomorrow, which will be aimed at picking up where Fonterra’s controversial guaranteed milk price scheme left off. The contract, which will allow farmers to lock in farmgate milk prices, is expected to be up and running by June.


Sebi Plans Trading In Weather Derivatives

Shrimi Choudhary – Business Standard

Sebi panel is analysing pricing models on such derivatives and working on the infrastructure needed. Unlike other financial derivatives, those on the weather do not have a definite pricing model.

PLY: Excellent news – a challenge for modelling & risk management but very much required in the subcontinent.


CHX Announces May 13 Start For SNAP Auctions



Irish SE: Global Exchange Market Expands To Include Listing Of Investment Funds


PLY: Good move by the Irish SE building on GEM success in single names.


CFTC Approves Proposed Guidance Relating to the Appropriate Treatment of Certain Electric Power & Natural Gas Contracts


Statement Of CFTC Chairman Timothy Massad On Proposed Guidance On Certain Natural Gas & Electric Power Contracts


Career Paths

CME appointed Paul Houston as Executive Director, Global Head of FX. Reporting to Sean Tully, Senior MD, Financial & OTC Products, CME, Houston will be based in London.

Euronext appointed three new members of its Executive Committee to strengthen its leadership team:

Amaury Houdart joins as Chief Talent Officer. Amaury will lead both HR and strategic initiatives related to talent development & organisational changes. Houdart was previously Group HR Director at Steria, a leading European IT services company.

Nicolas Rivard joins as Chief Innovation Officer. He was formerly a Principal at The Boston Consulting Group.

Pauline Bucaille joins as Chief Communication Officer later in April from Assystem, a global engineering and technology company, where she was VP for Communication.

PLY: Proof Pudding Eating risk factors pertinent. Concern always arises when the titles sound glamorous – that usually means an organisation lurching towards reaction. I hope Euronext can kill this concern rapidly and deliver, well, innovation through innovation and communicate communicatively – presumably the latter replaces Caroline Nico who left last month. As to talent management – generically, I still struggle to retain a straight face.

SCMP reports that fund manager Edward Chin Chi-kin and head of a London metal trading firm, Apurv Bagri, will vie for shareholders’ vote to win a seat on the board of HKEx at its AGM on April 28.

The seat has been left vacant following the “retirement” of director Oscar Wong Sai-hung, who cannot run again because of a new 12 year maximum term rule introduced in September.

PLY: Apurv Bagri is the son of former LME Chairman “Lord” Raj Bagri.

Interfax reports that in the April 1st AGM the PFTS stock exchange (Kyiv) shareholders have reshuffled the supervisory board and replaced nine of 15 its members, in the wake of the MOEX sale of its 50.02% stake in PFTS Stock Exchange completed in February .

Olena Amitan, Anatoliy Amelin, Yuriy Boiko, Serhiy Bordovich, Volodymyr Voloshka and Andriy Potapov are old members of the board.

Hanna Biletska (Boline Ltd), Serhiy Biriuk (Megabank), Yevhen Venichuk (Pravana Ltd), Volodymyr Halai (Boline Ltd), Maryan Zablotsky (Parvana Ltd), Oleh Kobzev (Eurobank), Oleh Mozgovy (Pravana Ltd), Yuriy Alekseyenko (Crookston Limited) and Andriy Kholodian (Pravana Ltd) were elected new members of the board.

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

11-17.04 – Coinsilium will be hosting its inaugural Blockchain Tech Lab, a week-long event taking place at Runway East at Finsbury Square in London

PLY: Don’t forget ICDA Blockchain 19/20 April…including my only public Blockchain appearance scheduled this month.

21.04 I-Cham Breakfast, in Dublin, Ireland, Guest Speaker one Patrick L Young discussing investment in CEE and SEE markets.

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

CFTC Announces Whistleblower Award of More Than $10 Million



Five Ex-Barclays Traders Plead Not Guilty to Libor Manipulation

Jeremy Hodges – Bloomberg

Jonathan Mathew, Stylianos Contogoulas, Ryan Reich, Alex Pabon and Jay Merchant denied the charges on Monday morning. The jury is being chosen for a trial scheduled to start this week and to last for four months.


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