April 06 2016

elb2The wrath of Xavier is upon all those who dare to question the perfection of the DB1-LSE deal. Given that is a horrible deal awaiting death by anti trust, it’s difficult to add much more except that the XavRol reputation is now heading for the cabinet in options pricing terms.

Public Markets

Thomson Reuters Acquires WM/Reuters FX Benchmarks From State Street Corporation


Thomson Reuters acquired WM/Reuters FX benchmark rate calculation business of The World Markets Company (WM) from State Street Corporation. The acquisition will be effective immediately.  

PLY: Very good deal for TMR, adds neatly to their forex portfolio.


Tullett Prebon 2015 Annual Report

Tullett Prebon

ICAP Publication of Supplementary Prospectus By Tullett Prebon


QV Premium: Exchange Deals Brief.


Xavier Rolet Fires Warning Shot Towards US Rivals As Merger Battle Heats Up

William Turvill & Julian Harris – CITY A.M.

In an explosive interview with City A.M., Xavier Rolet savages the record of US giants that have bought into the continent in recent years, and insists he does “not want to make the same mistake” as European exchanges that have succumbed to transatlantic takeovers.

His comments come just a day after it emerged that ICE has lined up funding for a £10bn takeover bid of the LSE.

“I know Euronext is going around, and the French government, and some regulators [saying]: ‘Side with ICE, this way we can break up the LSE, so Euronext can buy back Borsa Italiana, can buy back Clearnet, and recreate [something].’ Look, they’ve missed [the boat] – they’ve sold out to the Americans, they have nothing left. We don’t want to make the same mistake.

“What are we going to tell the next generation of entrepreneurs? ‘The only way to fund a high growth business is to go to Nasdaq, or go to San Francisco’?”

PLY: XavRol has clearly lost it. This is very sad to see. If the quotations are in any way accurate, he now qualifies for his own version of the infamous Hitler bunker meme. Moreover, the rants unearth the apparently standard Rolet tendency for disingenuity. His carpetbombing of NYSE is interesting because let’s face it, Duncan’s NYSE Euronext was such a perfect partner for DB1, they have been fighting a rearguard action against EU anti trust pretty much ever since. See also Monday’s comments.

Short of a cheap estate agent provocation to encourage a bidding war, these remarks have no substance and the Rolet legacy is quite badly damaged – the portrait is of a good dealmaker who failed to integrate his purchases properly despite an alleged micromanagement fixation and in the end gambled all to maximise his own sell-out as opposed to the long-term value for LSE or London.

P.S Who regulates LCH.Clearnet? Oh, a committee of the Banque de France. That Xav statement about Euronext? #DealSuicide. Or as they say in Paris “Oh, yes, we know we’re getting Clearnet but you think that’s all?”

Xavier Rolet Denies DB1 Deal Would Increase Financial Risks (subscription)

David Wighton – Wall Street Journal

PLY: The more he speaks, the less informed XavRol looks. Standard pinch of salt applies – binary equity dudes don’t get derivatives. End of.

Rule Change Raises Stakes In LSE-DB1 Merger

Marion Dakers – Daily Telegraph

Analysts said the decision by ESMA to bring forward rules on open access puts further pressure on DB1 to seal a deal.

PLY: Except it doesn’t, when you actually think about the situation and look at German law. Cue another influx of email suggesting LSE are pushing all the buttons to pressurise DB1 – the equality in the DB1-LSE proposal is that it is 100% a merger of equal desperation.

Derivative Investors Doubt Benefits Of LSE-DB1 Tie-Up (subscription)

Philip Stafford – Financial Times

Reduced margin and collateral costs could be offset by higher fees. QV Premium: DB1-LSE Merger Brief.

PLY: Cost fears are one thing, the actual collateral margin offset shangri la debate is something where optimism is dizzying – and rather misplaced in DB1-LSE (may even be misplaced anywhere…certainly anywhere with cross border CCP methinks).


IHS, Markit Do Not Expect Inversion Curbs To Halt Deal


IHS & Markit have said they do not expect their $13bn stock deal to be affected by planned new US rules designed to rein in transactions that allow American companies to switch their tax residence.


No Date Yet For Shenzhen Link

Dominique Nguy – The Standard


ESMA Issues Amended Rules For Access, Aggregation & Comparison Of Data Across Trade Repositories



EMIR: ESMA Proposes One-Day Margin Period Of Risk For CCP Client Accounts



Europe Retreats In US Derivatives Battle (subscription)

James Rundle – Financial News

Europe’s markets regulator has issued its final report on how much margin is required to be posted at clearing houses for derivatives trades – and has come down in favour of a US approach that was heavily contested for years.

PLY: In the end a weak Europe under pressure and awaiting its likely defenestration by the resumption of the Eurocrisis re-exploding had no choice. Not only have we endured a waste of time and money all round but ESMA entered the process without a decent budget to do their job in the first place but the pride of their political masters was at stake – so they had to wait for the next generation to get a deal. Therein a perfect surmise of why the current EU won’t survive in the long term.

Private Markets

BSE Looking To List Next Year

Sumeet Chatterjee – Reuters

Bombay SE (BSE) aims to list next year, its CEO, Ashishkumar Chauhan said, in a deal that will raise the profile of Asia’s oldest bourse at a time of industry consolidation, as investors such as DB1 get the opportunity to cash out.

The exchange expects to file a prospectus for its IPO and get regulatory approval within six to nine months.


Online Broker XTB Valued at $618m Ahead of IPO

Rosemary Barnes – Finance Magnates

X-Trade Brokers (XTB) has announced its intention to hold a public offering of shares in Q2 2016 and an introduction to trading on the Warsaw SE.

Bookrunners have valued XTB at 1.8-2.3 billion zlotys ($484-$618.4 million), pegging its pending IPO in Warsaw at up to 330m zlotys ($88m). The valuation marks it as the biggest IPO in Warsaw since May last year.

PLY: That is a good sized IPO for Warsaw of a Polish built brokerage success.


trueEX Expands To Support London Business Hours


Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL slightly up.


Warsaw SE: First Client Starts Using Colocation Service Offered By GPW



State Of Delaware Unveils Blockchain Initiative To Leverage Potential Of Smart Contracts



ICE Launches New US Coal Futures Contract For Illinois Basin Coal


ICE launched a new US coal futures contract for Illinois Basin coal, the first coal futures contract for the US market since October 2014.


NYSE Launches New Suite Of Services For Small- to Mid-Cap Growth Companies


NYSE introduced an enhanced range of services for issuers on NYSE MKT, which exclusively serves small- to mid-cap growth companies.


NSE Seeks Sebi Nod For Commodity Futures Trade

The Economic Times

NSE has recently written to Sebi seeking regulatory approval to launch a commodity futures trading segment. BSE had made a similar request some months ago.


EEX To Extend Its Offering In Freight And Iron Ore And Introduce Strip Clearing For Coal Futures On 28 April 2016



NZX To Launch NZ Milk Price Futures & Options Contracts


As discussed yesterday.


SEE Stock Trading Platform Launches First Two Blue-Chip Indices


The indices, SEE LinX and SEE LinX EWI, aim to enhance the visibility of regional markets.

QV Premium: SEE Link Project Brief.


FESE Response To The ESMA Discussion Paper On Benchmarks Regulation


Career Paths

Chi-X Australia & J.C. Flowers announced that one of Australia’s most eminent and experienced financial services leaders Dr. David Morgan, AO, has become Chairman of Chi-X Australia, following the completion of J.C. Flowers & Co.’s acquisition of Chi-X Australia, Chi-X Japan & Chi-Tech last month.

PLY: David Morgan met the Australian PM just before his appointment – all of a sudden that old vapid EFK rhetoric about ASX being the entity with proximity to government looks more empty than ever.

TMX named Shaun McIver as its new Chief Client Officer for Equity Capital Markets. Mr. McIver, who will report to Nicholas Thadaney, President & CEO, Global Equity Capital Markets, will join TMX on April 18, 2016.

BGC Partners named Steve McMurray as CFO, effective April 4, 2016.  He replaces Graham Sadler, whose intention to retire from BGC was announced on February 11, 2015.

Finance Magnates reports that the latest key hire by ICAP’s EBS division is Mark Bucaj, who leaves FXCM to join the EBS BrokerTec US office.

TheCityUK advises that Chris Cummings is standing down as CEO to take up the role of CEO of The Investment Association (IA). TheCityUK Board has put in place a process to select a suitable replacement at the earliest opportunity.

At IA, Chris will succeed Guy Sears, who has served for the past five months as Interim CEO during the search process. Chris is expected to join by the end of Q3 2016.

PLY: I am disappointed for Guy Sears and indeed don’t quite know why the IA have chosen Chris as their new CEO but at least getting him away from the levers of influence at the City UK is welcome, as he had appeared increasingly somewhat of a dull demagogue with a parochial mindset. Hopefully the UK financial centres body will now choose somebody who is from financial markets proper.

OCC announced that Susan E. Lester, a long-time banking executive, has joined the BoD as a Public Director, replacing Matthew B. Gelber of Bitterroot Asset Management, and William T. Yates of TD Ameritrade has joined the BoD as a Member Director, replacing Judith M. Kula of Wolverine Execution Services. Lester and Yates were elected to three-year terms.

Additionally, Raymond J. Di Sanza of Charles Schwab and Jonathan B. Werts of BAML, were re-elected as Member Directors, with Mr. Werts continuing to serve as Member Vice Chairman. Robert R. Litterman with Kepos Capital LP was re-elected as a Public Director.

Paddy Power Betfair To Cut 300 Jobs Following Merger

Irish Independent

Following the €10bn merger of the gambling giants completed in February, the group will now aim to cut 650 jobs from its workforce of 7,200. (expected cuts approx 300 in Ireland, 350 in UK).

Financial Calendar

New! – 19.04 – Interactive Brokers Q1 2016 Results – press release

New! – 26.04 – CFTC’s Market Risk Advisory Committeepress release

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

Other stories

Fidessa Explores Challenges Of Counterparty Exposure – New Paper Examines How Buy-Sides Can Ease The Burden Of Evolving Landscape



UK’s FCA Publishes 2016/17 Business Plan



ESMA Publishes Updated UCITS Q&A



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