April 07 2016

elb2My InBox & phone lines have resounded with unanimous opinions of disdain for the rather petulant behaviour of some major exchange group ‘managers’ in recent days. Certainly the pedantic posturing of one Frenchman who appears furious at the prospect of his Maginot line being broken (by an outbreak of free market activity – quelle horreur!), has raised the hackles of many who find the conduct unbecoming of a figure in a senior position not without its self-regulatory and industry leading status. That stature is also broadly seen as being diminished by XavRol’s counterpart in a country sufficiently removed from Britain as to probably negate the prospect of margin offsets in the proposed ‘merger of equal desperation.’ In the case of Mr CarCrash, (as the bondsters call him), being new to the job perhaps provides a minuscule sliver of mitigation. Then again, if I had been investigated for LIBOR, I suppose I would have tried diplomacy and humility as opposed to bombast and over hyped bluster. Then again he probably listened to the DB1 communications (sic) managers (sic). That process is about as useful as me asking my plumber what he thinks of MIFID II.

Markets and their management must set examples for all business. As such, my cause for concern is that some leading enterprises in the market structure parish are behaving in a fashion perhaps permissible behind the Chinese walls of some investment banks but which delivers a level of behaviour unbecoming of this parish. I am pleased to have heard from so many practitioners who view various recent outbursts, inept syllogisms and downright misleading statements, as simply unacceptable.

Hopefully management can restrain themselves in future and create a professional image. It might even make sense for them to attempt a reset in relations with the, appreciably distressed, parish.

At least today there is a hopeful silence, albeit with a few dismal dog whistle articles but who can blame the media? Collectively the entire parish scribbler contingent get paid less than some bourse CEOs. If you pay peanuts you get monkeys – how come the quality of exchange management… Anyway you get the gist, a reset will be welcome.

Now let’s all relax, take a deep breath and enjoy a Twix moment.

…Looking to the bright future, under 2 weeks to go to the ICDA Blockchain conference: To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUNG320” to claim your discount here.

Public Markets

BM&F Bovespa Acquires 4.1% Stake Of Mexico Bourse

Rogerio Jelmayer – MarketWatch

BM&F Bovespa SA has acquired 4.1% of BMV, (bargain circa 136 million reais ($37 million)). CEO Edemir Pinto had clearly signalled his intent to purchase minority stakes in Argentina, Mexico, Colombia, Chile and Peru. Last year, BM&F Bovespa acquired a 8% stake in Chile’s exchange.

In another deal attempt, in March, Cetip SA rejected–for the second time–an offer made by BM&FBovespa…

QV Premium: Exchange Deals Brief 2.

PLY: BM&F Bovespa implementing a programme BME ought to have done a decade ago.


Hong Kong’s Lee Kee Sees Potential For Possible Spot HKEx Metals Market

Polly Yam – Reuters

Clara Chan, CEO of Lee Kee Group , which is a member of LME and which owns a brokerage firm, said factories could use the platform as they look to diversify supply channels for raw materials.


How Obama’s Inversion Crackdown ‘Could Help The Germans Win LSE

Christopher Williams  &  Ashley Armstrong  – Daily Telegraph

PLY: In their desperation to make a story, we get the most remarkable fluff. Then again in their desperation to make a deal the bosses of DB1 and LSE have both uttered the most astoundingly ridiculous things too. Hmmm management and financial media on a par – gosh that strikes me as deeply perturbing on so many levels.

Anyway the inversion argument makes no sense to an ICE bid so far as I can see and IHS Markit appear to have skirted the issue too by the way.

LSE Deal Seen Sparking Industry Buyout Frenzy

John Detrixhe, Matthew Monks & Edith Fishta – Bloomberg

Shrinking market share may pressure firms to seek deals.

PLY: Interesting rapid romp through many possibles in the rollout mania I have been discussing with clients for some time. Not exactly ordered by priority but a useful primer to some names feasibly on the block (even though, actually the likes of BME remain an ugly sister firmly in the British pantomime tradition). QV Premium: DB1-LSE Merger Brief. Then again this raises the fascinating question of how the big and the mega-big will be able to find future pray once this phase of merger mania ends…


LME Starts Talks Over Warehouse Rent Rates

Eddie Van Der Walt – Bloomberg

LME issued a discussion paper about rate reforms at its listed warehouses, saying a cap on charges may be one way to reduce fees.

Private Markets

Bats Global Markets Said to Plan IPO for End of Next Week

Annie Massa & Alex Barinka – Bloomberg

Bats Global Markets is planning to complete its IPO at the end of next week.

The IPO is likely to price on April 14, with the shares beginning to trade the next day.


London’s $5 Trillion Gold Hub Getting Ready For A Major Overhaul

Eddie Van Der Walt – Bloomberg

London Bullion Market Association, is evaluating bids to create a trading and reporting platform. At the same time, a different plan is being developed by the World Gold Council, a mining industry group that is working with LME to come up with new futures contracts.

LBMA said in February that 5 made the cut in the RFP, they are widely believed to be CME, LME, ICE, Autilla/Cinnober & Markit/ABS.

PLY: Interesting and the most tangible story yet seen about WGC, suggesting they have a direct bilateral discussion with LME.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL flat. In other Indian news, I see former OMX supremo and NASDAQ President Magnus Bocker is advising the Maharashtra government on building a financial centre.


JPX: Commencement Of Proof Of Concept Testing For Blockchain Technology



Barclays, U.K. Regulators Endorse Bitcoin in Deal With Startup

Edward Robinson – Bloomberg

Barclays & the U.K.’s Financial Conduct Authority opened the British market to Circle Internet Financial, a startup that uses bitcoin to allow users to send each other payments, in a sign that global banks and regulators are overcoming their reservations about the cryptocurrency.

PLY: In reality Britain’s more pragmatic and ostensibly business friendly business regulatory complex have been moving towards Bitcoin from the start – albeit with the proviso that somehow they stopped the banks accepting Bitcoin-related businesses which rather throttled development for some months!


Rwanda Stock Market To Start Automated Trading

Stephen Nuwagira, Appolonia Uwanziga & Anitha Kirezi – New Times

What is the state of the local capital markets? At five years, is the Rwanda SE ready to be the platform of choice for firms and governments to raise development capital? And what became of the much-talked about municipal bonds and alternative market segment at the local bourse? Business Times’ caught up with Robert Mathu, the CMA chief, on April 2 to discuss these and other issues concerning the local and regional stock market sectors.


Wall Street Is Edging Toward Win on Derivatives Capital Rule

Silla Brush – Bloomberg

The Basel Committee on Banking Supervision on Wednesday proposed a new method for banks to assess their exposure to derivatives, which could wind up lowering the amount of capital lenders need to meet restrictions on leverage. The committee, which includes the Federal Reserve and European Central Bank, also took steps toward alleviating banks’ concerns that they’re taking a capital hit on the billions of dollars in collateral they receive from customers for handling derivatives.


European Parliament – Benchmarks: Restoring Confidence In The Financial Markets


Career Paths

Direct Match, an electronic U.S. Treasury Platform, appointed William O’Brien as Executive Chairman of its BoD, effective immediately.

Direct Match is currently in beta and poised to launch its platform later this year.

William O’Brien was most recently CEO of Direct Edge from 2007 to 2014, latterly serving as President of the combined BATS Direct Edge. Prior to that O’Brien served in leadership positions at NASDAQ and Brut, LLC.

PLY: Good to see William O’Brien back in the industry after his famous interview with Brad Katsuyama of IEX led to a slightly longer than 350 microseconds hiatus in Bill’s career.

PRWeek reports that Nasdaq has hired Bloomberg’s Allan Schoenberg as its VP of global communications. He is reporting directly to Jeremy Skule, CMO & SVP at the company. Schoenberg joined the company midway through last month.

PLY: Welcome back to the exchange end of the parish for Allan who was previously with CME. He is replacing Linda Recupero who left NASDAQ a month or so back.

Financial Calendar

11 – 17.04 – Coinsilium’s Blockchain Tech Lab at Runway East at Finsbury Square, London  

19 – 20.04 – ICDA Blockchain Conference

20.04 – SGX Q3 Results FY2016  

21.04 – I-Cham Breakfast, in Dublin, Ireland, Guest Speaker Patrick L Young discussing investment in CEE & SEE markets  

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

Share Notes

Oslo Børs VPS Holding has allotted 1709 shares to employees in the group at NOK 84,-. New holding is 4298 shares.


Marketplace Lenders Establish Trade Body (subscription)

Financial Times

Funding Circle, Lending Club and Prosper form united front against closer regulation.

Other stories

LSEG’s ELITE Launched By Casablanca SE In Morocco



FIA Pledges To Continue Working With Basel Committee On Impact Of Capital Requirements



Electronification Of Trading – Speech By Edwin Schooling Latter, Head Of Markets Policy, FCA, Delivered At The FIX 2016 EMEA Trading Conference



ESMA Updates Its Q&A Document On Prospectus Related Issues



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