April 18 2016

elb2Wildly frantic day today, as I rush to pixel and zoom around London. Lots happening, catch the pith… BATS IPO goes off well. Oslo dumping a CSD systems vendor is pretty seismic while something is happening at FTIL et al.

See many of you tomorrow at ICDA Blockchain, I have a few keynote remarks at the start of the day and a panel at around 1600… (To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUNG320” to claim your discount here).

Meanwhile, at Fidessa Old Jewry tonight, it’s Dave Setters’ soiree for Motor Neurone Disease – drop by to say hi to Dave and support a great cause.

Public Markets

BATS Shares Climb In IPO, Marking Year’s Biggest Deal

Leslie Picker – NY Times

BATS’s stock gained 21%, to $23 at the close of trading in NY. The shares are listed on BATS’s own BZX Exchange, the first to do so since the company was founded 11 years ago as an alternative trading site to NYSE & Nasdaq.

QV Premium: Bats IPO Brief.

PLY: They made it – phew! Bet there was a very very rigorous watch for errant algos on day one… Welcome to the public parish, BATS: a great IPO shows how investors value the exchange model.

 

DB1 Says Brexit Is A Risk For Any US Suitors For LSE

Reuters

A British vote to leave the EU could be a threat to any rival bidder from the US for LSE but would not undermine the planned $30 billion merger between DB1 & LSE, DB1 finance chief Gregor Pottmeyer  said in “Euro am Sonntag”.

PLY: Plenty of other things however do undermine the merger of equal desperation rather definitively. The fact that Jeff Sprecher now defines the debate while saying nothing is in and of itself the factor undermining the deal – DB1-LSE management are just pawns on Jeff’s board goes the perception.

Brexit Vote Could Not See Merged LSEG’s HQ Moved To Germany

William Turvill – CITY A.M.

Sources close to the LSE-DB1 deal have dismissed the prospect of the merged company having its headquarters outside of the UK in the event of a Brexit.

QV Premium: DB1-LSE Merger Brief.

PLY: #ScaremongeringDrivel. If DB1-LSE is to be based in Europe’s industrial heartlands and rather parochial financial centre of Frankfurt then the deal is utterly pointless.

 

SEC Faces Opposition To Planned Share Trading Rules Change (subscription)

Nicole Bullock – Financial Times

PLY: Usual status quo impetus which robs markets of leadership while we live in hope the SEC can ‘grow a pair’ as I believe is the vernacular for the old Shakespearian Lady Macbeth maxim on courage and sticking places…

SEC Seen Likely To Approve New IEX Stock Exchange (subscription)

Dave Michaels – Wall Street Journal

Richard Ketchum, Chairman & CEO of FINRA, said Friday that IEX has probably satisfied most of the SEC’s concerns about how the market would operate, including its use of a “speed bump” intended to slow down the fastest traders.

PLY: We live in hope.

 

FCA: Are High-Frequency Traders Anticipating The Order Flow? Cross-Venue Evidence From The UK Market

MondoVisione

`Flash Boys’ Don’t Prey On UK Investors

Silla Brush – Bloomberg

Economists at the FCA said there was no proof that speed traders use their technology to jump milliseconds ahead of competitors’ orders, according to a research paper.

PLY: Backed up on reading right now…interesting conclusions but not necessarily contradictory to US outlook either.

 

All Options On The Table After SEC Rejection

Katrina Mennen A. Valdez – Manila Times

Philippine SE is considering its options, which could include opening its own fixed-income exchange, and will decide in H2 of the year what action to take after its application to acquire PDEx was denied by SEC.

QV Premium: PSE – PDEx Merger Brief.

Private Markets

Tadawul To Hire Investment Bank For Flotation

Reuters

Saudi SE (Tadawul) is in the process of hiring an investment bank to advise on its flotation, planned for 2018.

 

XTB Looks To raise $56m In IPO On Warsaw SE As Revenues Top $72m

LeapRate

Leveraged retail forex products broker/platform XTB is planning on raising $56 million in its IPO, which would value XTB at about $400 million.

 

PMEX Proposes Imposition Of 5% Tax On Capital Gains

Business Recorder

Pakistan Mercantile Exchange (PMEX) has proposed Federal Board of Revenue (FBR) to impose 5% tax on capital gains instead of the current tax of 0.05% on margins and deposits, reduce tax on import of gold and amend tax laws to enable the exchange to develop an Islamic money market, providing a platform for the Islamic Financial Institutions (IFIs) in budget (2016-17).

 

The Founder Of Robinhood Wants You To Trade Stocks For Free

Matthew Philips – Bloomberg

In 2011, Baiju Bhatt and Vladimir Tenev, both Stanford physics graduates, were living in New York, building trading systems for the buy side. After Occupy Wall Street, they decided to apply their expertise to improve access to the financial-services industry for young people. In 2013 they founded Robinhood, a commission-free trading app. Robinhood is now the fastest-growing brokerage, with more than $3 billion in trading volumes. Its almost 1 million customers have saved some $70 million in trading commissions.

PLY: Er…platform charges you nothing, gets paid for order flow and this means the crusties really stick it to the 1%? I hate to sound negative but I sense a flaw in this USP.

Special Section: FTI, NSEL, India at the Crossroads

PLY: What’s up at FTIL? Up nearly 14%… MCX flat. Funny how FTIL stock always seems to front run any news in the stock.

Sebi Begins Audit Of NSEL Brokers

Jayshree P. Upadhyay – Livemint

Sebi has started an audit of the brokers that sold products of NSEL.

Technology

Oslo Børs: VPS Ends Its Agreement With Percival CSD Partners AS (Estonia)

MondoVisione

In Q4 2014 VPS initiated a project to modernise its IT platform and service platform. The BoD of VPS has decided to end the agreement with Percival CSD Partners to deliver a CSD core system.

PLY: Pretty seismic loss for Percival to be shunted out of a signed deal during implementation. Suggests a breakdown of relations not in keeping with the normally reserved Scandinavian culture – to put it mildly.

Products

LSE To Launch Trading In Chinese Depositary Receipts

Michelle Price & Engen Tham – Reuters

The move would serve as an alternative to a cross-continent, direct equity trading link being studied by the LSE and Shanghai SE (SSE) but which is unlikely to be pursued due to the technical challenges involved.

PLY: AKA the LSE-Shanghai through train was typically vacuous UK FinMIn puff / LSE Agitprop when they gave George Osborne an away day, as I said at the time.

 

Nasdaq Clearing Completes First Round Of OTC Portfolio Compression Service

Nasdaq

Nasdaq announced that a compression session in collaboration with TriOptima (announcement here) and several Nordic banks has been carried out for the majority of the Nordic banks. Five clearing members eliminated 288 billion SEK in the first compression cycle for SEK IRS at Nasdaq Clearing.

PLY: Hooray!

 

SGX Focuses On Derivatives In Fight To Survive

Yui Nakamura & Mayuko Tani – Nikkei

Amid consolidation among major global bourses, SGX has decided to pursue an altogether different strategy from many of its peers. It focuses on offering new derivatives products in the hope of tapping potential investor demand.

PLY: Pursuing the last decade’s derivatives strategy may yet have a lot of legs in Asia – we shall see…

 

SEC Adopts Business Conduct Standards for Security-Based Swap Dealers & Major Security-Based Swap Participants

SEC

 

Korea To Extend FX Market Hours By 30 Mins

Korea Times

Currently, the local fx market runs from 9 am to 3 pm on weekdays. If extended, it will open till 3:30 pm.

 

Dalian Commodity Exchange Develops Agricultural Derivatives Market & Serves Modern Agriculture Accurately

MondoVisione

Career Paths

NLX Restructures Team, CEO Crosswell To Join Board (subscription)

Alice Attwood – FOW

Nasdaq has restructured the leadership team of NLX, with CEO Charlotte Crosswell to take on a new board member role as CTO Carl Slesser steps up as President. QV Premium: NLX Brief.

PLY: Ceteris paribus anvils at altitude generally can’t defy gravity while similarly perceptions of protection from above ultimately couldn’t prevent the gravity of failure being applied to what was a disruptive presence in derivatives insofar as disrupting reputations without actually ever making any coherent impact beyond a disturbing, brand destructive hype and a lot of very expensive inaccurate agitprop. Good luck to Charlotte in the future. It will be interesting to see how Hans-Ole Jochumsen brings his focus to what NLX does next. Exploiting the licence is a good idea. Dead horse flogging has not yielded tangible results on any platform so far as I can recall.

During its annual General Assembly on 13th April 2016, the 20 members of the European Association of CCP Clearing Houses (EACH) elected the following Board members for a two-year mandate:

Chairman – Simon Turek, Senior Director, Government Relations CME, CME Clearing Europe

Vice-Chairman – Tim Grange, Director of Regulatory Policy, ICE Clear Europe

Vice-Chairman – Oliver Haderup, CCO, Eurex Clearing

Vice-Chairman – Corentine Poilvet-Clediere, Head of Regulatory Strategy & Post Trade Policy, Europe, LSEG, LCH Group

Member – Xavier Aguila, MD Operations, BME Clearing

Member – Erica Brown, Head of International Affairs, Nasdaq Clearing

Member – Arnoud Siegmann, CRO, EuroCCP

Member – Marcin Truchanowicz, MD, CRO, KDPW_CCP

PLY: Good to see Simon Turek stepping up to Chair EACH (and it was good to see you all last week). A very interesting board with a super strong triumvirate of Vice Chairmen and a good board for the long tail of CCP operations which the body represents under the indefatigable day to day management of Rafael Plata. With both IRGiT and KDPW active, it is good to see Marcin Truchanowicz on board, to remind us all that CEE Clearing is not just about the good offices of KELER.

Contango, the specialist derivatives consultancy, announced that Paul Constantinou will be working with its sales & business development team, with a specific emphasis on Technology. Paul was most recently responsible for sales & new market development at Trayport, a leading provider of energy, commodity and financial trading solutions to exchanges, brokers and traders worldwide.

PLY: There was us all thinking he was talking a while off but then again as I said at the time, it is unsurprising he would be a man in demand!

ASX Heads Into Uncharted Waters As New CEO Search Kicks Off

Michael Smith – AFR

ASX Chairman, Rick Holliday-Smith, who usually avoids the limelight, has been doing the rounds of the exchange’s staff, senior executives, shareholders and regulators, following the sudden resignation of EFK.

PLY: I love a good old fashioned introverted exchange. I am still trying to discern a single client reference in this article. Oops.

LeapRate reports that Eddie Astanin, Chairman of the Executive Board of Russia’s National Settlement Depository, has been re-elected to the BoD of the self-regulated non-commercial organization “National Securities Market Association” (NSMA).

Who Is The Real Outsider In The HKEx Director Election? (subscription)

Enoch Yiu – SCMP

As Metdist head Apurv Bagri and HK-based hedge fund manager Edward Chin Chi-kin square off for the seat in the coming AGM due April 28, Bagri seems the obvious outsider as it would be the first time someone based outside HK and from the metal trade would make it to the board if he gets past the post. But the board thinks otherwise, having just issued a circular urging shareholders to vote for him.

PLY: The insider outsider… Hmmm.

Financial Calendar

19 – 20.04 – ICDA Blockchain Conference, PLY speaks & chairs a panel amongst a glittering line up…

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  

17-19.04 – IOMA: WFE’s Clearing & Derivatives Conference 2016 in Kuala Lumpur – programme

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

Other stories

Argentina Readies First IPOs Since 2010

Jorge Otaola & Walter Bianchi – Reuters

A bank and a business group are likely to launch Argentina’s first IPOs in over five years.

 

Remarks From The Brookings Institution, Richard G. Ketchum, FINRA Chairman & CEO, Washington, DC, April 15, 2016

MondoVisione

 

WFE Releases 2015 Derivatives IOMA Market Survey

MondoVisione

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