April 15 2015


Eris makes interesting cooperation with JSE as DTCC shores up capital position. Citi to sell retail fx arm, HK (self) regulatory issue raised again as investors wonder if ‘through train’ might even loop to Singapore?

Early to pixel this am as I have a busy day including chairing a session for the FDI Agency Invest Northern Ireland. Lots to scroll here…

Meanwhile, our Premium Briefs keeping you abreast of various industry issues are updated daily when news arises. All topics covered can be found on our dedicated Briefs page via Exchange Invest Premium.

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Vietnam Exchanges Merger Brief NEW!
CVC Betfair Bid Brief 
India – NSE Sales Brief
EU CMU Brief
EU FTT Brief Part 1Part 2 
NSEL Scandal Brief – Main File
NSEL scandal – FTIL Group – Board and Management Changes Brief – Part 1 and Part 2
FXCM Sales Brief
BGC / GFI: Post Merger Disposals
Rise of Africa – Part 1Part 2Part 3Part 4Part 5
The Bond Platforms Rush – Part 1Part 2
ICE – NYSE Euronext Deal – Part 1Part 2Part 3

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Public Markets

DTCC Finalises $400m Equity Capital Raising (subscription)
Philip Stafford – Financial Times

DTCC is finalising a $400m equity capital raising from its user-shareholders so it can meet tougher new regulations for market risk managers.

Citi Seeking To Sell Retail FX Arm
Patrick Graham – Reuters

Citigroup is seeking a buyer for its retail forex brokerage CitiFX Pro.

Reforms Fuel Concerns Over Regulator Role For HKEx (subscription)
Enoch Yiu – South China Morning Post

“There is a clearly a conflict of interest for HKEx to continue to act as a front-line regulator for other listed companies while at the same time it is a listed company chasing maximum profit for shareholders,” Democratic Party lawmaker Sin Chung-kai said.

“The Securities and Futures Commission should take a bigger regulatory role in terms of listing approval and to make sure the exchange system can cope with the current market rally.”

Investors Stoke Speculation About A Singapore-China Stock Connect (subscription)
Jake Maxwell Watts – Wall Street Journal

SGX shares have surged to their highest level in four years as investors bet the city state could be gearing up to join the ‘through train.’

See also our Premium briefs: HKEx – SSE – Stock Connect Part 1,Part 2,Part 3.

Oslo Bors Invites Large Equity Orders To North Sea Dark Pool

Oslo Bors invites large equity orders to return to a regulated stock exchange environment. This will be made possible by the North Sea dark pool.

“We want to provide a service to those who currently submit orders to fragmented and unregulated dark pools”, comments Bente A. Landsnes, President & CEO of Oslo Børs.

Oslo Børs will offer new dark pool functionality via its trading system from 20 April 2015.

Earlier this month Oslo Bors announced it will close down the trading in Swedish, Danish and Finnish securities via the Burgundy market.

Block-Hunting Algorithm May Portend European Dark Pools’ Future
John Detrixhe – Bloomberg

European policy makers want to make dark pools revert to their original purpose as places for trading blocks of stocks, rather than venues that break orders into tiny slivers. Algorithms may help turn that goal into reality.

With those regulations in mind, ITG has revamped its program for finding the best prices for large trades, it said in a statement Tuesday. The broker, which also operates its own venue, probably won’t be the last firm to roll out block-friendly features.

PLY: More blocks mean lower costs for investors and that is great for savers and pensions everywhere.

ICE Benchmark Administration Launches Consultation For LBMA Gold Price

ICE announced that ICE Benchmark Administration (IBA) launched a market consultation on three aspects of the LBMA Gold Price auction process which will close on May 1, 2015.

IBA launched LBMA Gold Price last month.

Previous comment here and here.

ITG Launches ITG Analytics Incubator

ITG announced the launch of ITG Analytics Incubator, a digital community for the sharing of ideas and collaboration in trading and portfolio analytics. ITG Analytics Incubator is home to several mobile and prototype analytic applications, data sets for upstream applications, and a library of educational content ranging from short video clips to journal-published white papers.

SEBI Allows Stock Exchange Route For M&A Deals
The Hindu Business Line

Come July 1, buybacks and share acquisitions through M&A deals can be conducted through a separate window on the stock exchanges, said a SEBI notification. Currently, exchanges offer a separate window for promoters or large investors to dilute their stakes through the offer-for-sale mechanism. Of late, the Centre has been using this route for divesting its stakes in PSU majors.

The use of the stock exchange mechanism for buyback or M&A would be in addition to the already existing tender offer method.

Private Markets

IEX Strategist Says Europe Is ‘Next Logical Step’ (subscription)
Tim Cave – Financial News

PLY: …But note no immediate plans…

SEBI Allows Pune SE To Exit Bourse Business
The Hindu Business Line

FAO: Recently SEBI allowed OTC Exchange of India (OTCEI) (reported here), Jaipur (reported here), Cochin, Bangalore and Ludhiana bourses (reported here) to exit the exchange business.

Nigeria – SEC Releases Final Rules On Demutualisation Of Exchanges
This Day Live

SEC has released final rules on demutualisation of securities exchanges in Nigeria. The rules, according to SEC, are not specific to the Nigerian SE (NSE) alone but are aimed at operations of any registered exchange in Nigeria.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX & FTIL largely flat.

Jignesh Shah Not Involved, Claims NSEL MD Post Sting
The Economic Times

Jignesh Shah is not involved in any matter related to NSEL and all recovery efforts of the bourse are managed by its revamped BoDs, said Prakash Chaturvedi, joint MD, NSEL, at a press conference on Tuesday.

PLY: A virtual show of hands: how many readers believe this?

NSEL Refutes Claims Of Influencing Trading Clients
Business Standard

The tainted NSEL on Tuesday dismissed the claim of a small trading client that NSEL was trying to influence him to support a proposed settlement plan.

The client, Kirit V Sheth, with his payment receivables of less than Rs 1 crore had alleged that NSEL Joint MD Prakash Chaturvedi tried influence him to support the plan in which FTIL had proposed to pay at least 50% to all trading clients in three-four weeks.

Vested Interests Trying To Scuttle Proposed Settlement: NSEL
The Economic Times

Read our Premium NSEL-FTIL Merger Brief and NSEL Scandal Brief – Main File.


Betfair Suffers Major Connectivity Problems
Matthew Pitt – PokerNews

Betfair’s sportsbook, betting exchange and websites were unavailable for much of April 13 after the firm’s servers came under attack from a Distributed Denial-of-Service (DDoS) attack.

PLY: DDOS attacks often linked to extortion are a sad fact of life for sports exchanges and betting entities and have been for well over and decade.

Italy Antitrust Body Investigates Bourse For Unfair Practices

Italy’s Antitrust authority said on Tuesday it had opened an investigation into whether Italy bourse operator Borsa Italiana had given preferential access to its data to financial information company Blt Market Services.

A statement said the investigation was opened after a complaint by a rival financial information provider, eClass. Blt Market Services is a part of LSEG Italia.

The investigation is expected to be concluded by the end of May.

CLTX Launches Single Sign On Portal For Integrated Access To All Exchange Services

Colt Launches Capital Markets Extranet

Colt announced the launch of its financial services extranet Colt PrizmNet, which will connect providers of financial content – including market data, research and other services – to Capital Markets firms.


JSE & Eris Exchange Announce Swap Futures Licensing Partnership
Eris Exchange

Johannesburg SE (JSE) announced that it signed a multi-year licensing agreement with Eris Exchange (Eris) to list swap futures on the South African Exchange. The license agreement enables JSE to launch multiple swap futures products based on the Eris Methodology, Eris’ product design for constructing capital-efficient futures that replicate the economics of OTC swaps, which incorporates intellectual property, expertise and patent-pending innovations.

This is the third international licensing partnership of Eris in the past 8 months. MX, ICE (reported here) and now JSE. ICE plans to launch Eris Credit futures in the US at the end of April and Eris iTraxx futures before the end of the quarter.

PLY: Eris continue to blaze a trail in the new world of swap trading.

BSE Creating Platform To Attract More Retail Investors To Govt Bonds
Ashish Rukhaiyar – Livemint

BSE is creating a platform to attract more retail investors to trade in government bonds and is planning to add a separate segment for trading in commodities, even as it struggles to maintain its share in its mainstay equities business.

PLY: “Although BSE has made a quantum leap from where it stood five years ago, it has little choice other than adopt a scaled up “department store” exchange model, according to Patrick L. Young, executive director at DV Advisors”…whoever he is!


CBOE MSCI Index Options To Debut April 21

CBOE will launch options on the MSCI Emerging Markets and MSCI EAFE Indexes on Tuesday, April 21. The CBOE ticker symbols are MXEF for options on the MSCI Emerging Markets Index and MXEA for options on the MSCI EAFE Index.

Career Paths

Automated Trader reports that BOX Options, the all-electronic equity options market, has appointed Ed Boyle as CEO and Lisa Fall as President.

R.J. O’Brien & Associates (RJO) announced that veteran institutional grains broker Richard Mayhew has joined its affiliate R.J. O’Brien (UK) as SVP, Head of Grains & Oilseeds, EMEA.

LeapRate reports that Sigma Trading has appointed David Russell as Head of Risk, based in London. Mr. Russell joins Sigma Trading from IG Group, where he served as Treasurer for eight years after joining the British CFD and spread betting giant from Global Trader Europe in 2007.

India – The Appointment Committee of the Cabinet (ACC) has extended (reported by DNA) the term of FMC Chairman Ramesh Abhishek fourth time for another three months or until the regulator gets merged with Sebi, whichever is earlier.

Financial Calendar

Nasdaq Q1 2015 Financial Results – April 23, 2015 – press release here.
BGC Partners’ & GFI Group’s Q1 2015 Financial Results – April 29, 2015 – press release here.
TMX Q1 Financial Results – Monday, May 11, 2015 – press release here.
Lending Club Q1 Financial Results – Tuesday, May 5, 2015.

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

Analyst Notes

ICAP “Hold” Rating Reiterated By Shore Capital

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

All Analysts, Banks and Brokers are welcome to contribute to this section.


Lending Club Strikes $150m Deal With Citigroup (subscription)
Ben McLannahan – Financial Times

Lending Club has entered a $150m tie-up with Citigroup, the number three US bank by assets, marking a key step in the attempt by the biggest P2P lender to “transform” the banking system.

According to Renaud Laplanche, Lending Club’s founder and CEO, Citi will use the firm’s platform to supply up to $150m to “underserved” borrowers that its branch network is unable to reach.

China P2P Lender Yirendai Said To Plan $300 Million IPO
Lulu Yilun Chen, Joyce Koh & Jonathan Browning – Bloomberg

Yirendai.com, a Chinese P2P lending platform, plans to raise about $300 million in a U.S. IPO, people with knowledge of the matter said.

The Beijing-based company, whose name means “convenient lending and borrowing” in Chinese, aims to list this year, according to the people. It could be valued at about $2 billion in the share sale, two of the people said, asking not to be identified as the information is private.

Other stories

SEC Investigating Sale Of Complex Securities To Mom-And-Pop Investors
Sarah N. Lynch – Reuters

A top regulator on Tuesday said SEC will bring more enforcement actions against companies selling complex securities and risky structured products to retail investors.

Testimony Of CFTC Commissioner Sharon Y. Bowen Before The U.S. House Committee On Agriculture, Subcommittee On Commodity Exchanges, Energy, And Credit
Testimony Of CFTC Commissioner Mark Wetjen Before The U.S. House Committee On Agriculture Subcommittee On Commodity Exchanges, Energy, And Credit Subcommittee
Testimony Of CFTC Commissioner J. Christopher Giancarlo Before The U.S. House Committee On Agriculture, Subcommittee On Commodity Exchanges, Energy, And Credit

Regulators Working Together To Serve Investors, SEC Commissioner Luis A. Aguilar, North American Securities Administrators Association Annual NASAA/SEC 19(d) Conference, Washington, D.C. April 14, 2015
The Importance Of Smart Regulation, Rick A. Fleming, Investor Advocate, U.S. Securities And Exchange Commission, NASAA Public Policy Conference, Mayflower Renaissance Hotel, Keynote Luncheon, Washington, D.C. , April 14, 2015

The Dominance Of Data And The Need For New Tools: Remarks At The SIFMA Operations Conference, SEC Commissioner Kara M. Stein, April 14, 2015

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