April 26 2016

elb2A remarkable ‘clarification’ from LSEG on recent Xaverian remarks while many wonder if Prince Jeff will soon lay siege to London’s ancient bastion of capital…

Meanwhile in American stock markets I think barks per millisecond may become the hot new benchmark.

Elsewhere, Malaysian results inch up as we begin a frantic week of A&E-GMs and auction specialists Perfect Channel powers new Global Dairy Trade platform.

Save the date: September 15th, InterContinental Hotel, Warsaw. First CEE CMU Capital Markets Summit, chaired by me, Patrick L Young. Confirmed CEO speakers includes Ivana Gazic of Zagreb and Ivan Takev of Sofia. More names to follow.

Finally, a word of warning: cybersecurity is here and a clear and apparent danger…what are you doing to ward it off? They got SWIFT this week (perhaps not surprising as it is the dinosaur of the tech world despite a lot of marketing lipstick): SWIFT Hack Spreads Panic.

Public Markets

Bursa Malaysia Q1 2016 Results

MondoVisione

vs Q1 2015: Operating revenue at RM126.1m (USD 32.3m), up 5.3%, PATAMI at RM49.9m (USD 12.8m), up 6.1%.

 

LSE: Clarification Statement

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LSE CEO Says Hasn’t Held Talks About ICE’s Strategy

Rory Gallivan – Dow Jones Business News

LSEG Monday said its CEO Xavier Rolet hasn’t held discussions with ICE about ICE’s strategy.

LSE said it was making the comment for clarification after the Sunday Telegraph newspaper published on April 3 an interview with him, in which he made comments about ICE’s track record in Europe.

QV Premium: DB1-LSE Merger Brief.

PLY: A remarkable statement from the LSE in the wake of considerable discomfort in the parish about some recent statements, particularly those addressed, at least in part, above. Read the “Clarification Statement” it is somewhat excruciating – and given the ongoing rumours of micromanagerial tendencies, it arguably raises questions about industry comprehension amongst the C-suite.

 

Gatecrashing The LSE

Chris Hughes – Bloomberg

The pressure is building on ICE to try to break up LSE’s merger with DB1. Investors don’t see it that way.

LSE shares have underperformed the market since Feb. 29, the day before ICE said it was considering an offer. If investors believed ICE was going to make a generous offer to wrest LSE from its German rival, the stock would have outperformed.

PLY: The message seems to be that the “merger arb” folks see no future in the deal so they are sitting on their hands.

 

Shanghai London Link `For September Start’

The Standard

The Shanghai-London stock link will be rolled out in September, with GDRs (previously discussed earlier this month) initially, to gauge market reaction.

PLY: So essentially just a GDR market listing for big stocks with a streaming dongle. Not quite the remarkable unification of Anglo-Sino flow which might have been hoped for.

 

IEX Asks For SEC Exchange Approval On Merits Of Its Application (subscription)

Financial Times

Upstart trading venue seeks green light over and above broader debate over stock trading rules.

PLY: It’s well beyond time but “decision” and “bureaucrat” make uncomfortable bedfellows.

SEC Draws NYSE’s Fury With Idea a Millisecond Doesn’t Matter

Annie Massa – Bloomberg

Does a millisecond matter?

Maybe not, SEC is saying. If a stock exchange intentionally delays orders by just one-thousandth of a second, it would be acceptable under an SEC proposal. NYSE and others oppose the change, saying a millisecond is anything but trivial.

The fight over a tiny fraction of a second is tangled up in IEX’s attempt to convert its private market into a full-fledged public stock exchange.

PLY: After much pondering, all with significantly more than a millisecond of latency, I fear the only logical lowest common denominator answer to this remarkable debate is “Woof!”

(If you would prefer added perspective from the world far beyond the madding crowd of binary cash equity markets’ folk, I could stretch my analysis to “Woof! Woof!”).

 

Citadel Tops List Of Private U.S. Trading Venues

John McCrank – Reuters

Citadel executed just over 1.1 billion shares in its brokerage the week of April 4, according to FINRA.

 

European Commission – CMU: Taking Stock Of The Progress Made So Far, Brussels, 25 April 2016

MondoVisione

QV Premium: EU CMU Brief.

 

TSX NAVex Prepares for Launch

TMX

New centralized mutual fund solution, TSX NAVex, has entered the client testing phase.

 

Garry Jones: LME Looking To Tap Asian Demand

Natsuki Kaneko – Nikkei

LME aims to attract more market players in China, India and other parts of Asia amid intensified competition from rivals around the world.

 

PSE: SEC Should Enter Into Deals With Asean Peers On Stock Trading

VG Cabuag – Business Mirror

Philippine SE (PSE) said the government should enter into mutual recognition agreements with its regional peers in Southeast Asia, mainly on buying and selling stocks.

QV Premium: ASEAN Exchanges Project Brief.

 

SGX Partners China Construction Bank To Promote Singapore’s Capital Markets

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Private Markets

NSE To Challenge Sebi Panel’s Findings

Jayshree P. Upadhyay – Livemint

Sebi has sought an explanation from National SE (NSE) on a report by a Sebi constituted expert panel which had recommended action against the bourse for violating norms of fair access.

NSE To Challenge Claims Of Unfair Access At Its Venue

Santanu Chakraborty – Business Standard

National SE will in the coming weeks submit a detailed report to its regulator to challenge claims that high-frequency traders gained unfair access at its venue, according to people with knowledge of the matter.

 

Boursa Kuwait Officially Assumes Responsibility For Kuwait SE Operations

Zawya

Boursa Kuwait announced that it has officially assumed responsibility for the management of the Kuwait SE (KSE)’s operations. The hand-over follows the implementation of a detailed operational plan and strategic roadmap to ensure the smooth transition of stock market operations. The process has been developed in close collaboration with CMA. Transition scheduled for completion by 30 September 2016, when Boursa Kuwait will obtain its official license to replace KSE, and at a later stage, prepare for an IPO.

 

Bitstamp Licensed

Laura Shin – Forbes

On Monday, Bitstamp announced that Luxembourg has granted it a payment institution license, making the company the first nationally licensed Bitcoin exchange in the world.

Under the EU’s “passport” program, which allows financial services providers legally established in one member state to operate in others, Bitstamp will also be licensed across all 28 EU countries. The license goes into effect July 1, when Bitstamp will be operational in Luxembourg.

PLY: Deft syllogism, not sure it is quite accurate and indeed a Payment Institution is many things but not an exchange. Then again in other news, granny SWIFT has been hacked – not surprising but rather terrifying.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat to small off, FTIL up 1%.

Technology

MOEX- Derivatives Trading Interruption

Maria Nikolova – LeapRate

On Monday, April 25th, trading in derivatives was halted at 11.20 and resumed at 12.15 (Moscow Time). The causes for the problems are still investigated. FX, stock and precious metals markets have been operating normally.

 

GDT Market Launch

Perfect Channel

PLY: Fonterra delivering supply guarantees a lot of liquidity (in all senses) for the new Global Dairy Trade auction platform to be powered by Perfect Channel. Interesting move in a time of EU dairy deregulation.

 

EU Regulators Agree On Definition Of HFT (subscription)

Tim Cave – Financial News

European regulators have settled on a definition of HFT as part of efforts to rewrite the rulebook for trading in the region.

 

Troise Looks To Boost ITG’s Fintech Credentials (subscription)

Tim Cave – Financial News

Frank Troise believes ITG was a fintech company long before the term came into vogue.

 

Distributed Ledger Technology – Panacea Or Flash In The Pan?, Speech By Yves Mersch, Member Of The Executive Board Of The ECB, At Deutsche Bank Transaction Bankers’ Forum 2016, Frankfurt am Main, 25 April 2016

MondoVisione

Products

HKEX Rolls Out Risk Management System For Its Derivatives Market

MondoVisione

HKEx launched its Pre-Trade Risk Management (PTRM) system, a system that offers tools to help Participants in its derivatives market meet their needs for pre-trade controls while complimenting their in-house risk controls.

 

Sebi Tightens Prop Trading Norms In Commodity Derivatives

Business Standard

Commodity exchanges ordered to amend provisions and bye-laws to launch proprietary trading in alignment with equity exchanges.

 

Nairobi SE: Launch Of Derivatives Market To Delay Further

Constant Munda – The Star

The planned trade in financial derivatives on Nairobi Securities Exchange will delay further than June as stakeholders bid to deepen knowledge among participants and create public awareness.

 

New Data On OTC Equity Trading Now Available, FINRA Announces – Additional Transparency Covers About 20% Of All Trading In National Market System Equities

MondoVisione

Indexes

CES Shanghai-Hong Kong Stock Connect 300 Index To Be Revamped & Renamed

MondoVisione

Responding to the market’s strong demand for a comprehensive cross-border index related to the Stock Connect programme, China Exchanges Services Company Limited (CESC) announced a revamp of its CES Shanghai-Hong Kong Stock Connect 300 Index (CES SHSC300) to include Shenzhen stocks, with the new name CES Stock Connect 300 Index (CES 300) from 23 May 2016.

 

KRX & S&P To Develop Smart Beta Index

Korea Bizwire

Korea Exchange (KRX) will develop its own smart beta indices in partnership with S&P.

Career Paths

LME appointed Gonzalo Cuadra as Chairman of the LME User Committee, replacing John Smillie. Mr Cuadra is CEO of Chile Copper Limited and MD of Codelco Services Limited.

Stefan Boel, an executive board member at Aurubis, has resigned from the LME User Committee and has been replaced by Christophe Koenig, a SVP at Aurubis.

LCH announced two senior executive appointments. Effective 1 May 2016, Daniel Maguire will assume the role of Global Head of Rates & FX Derivatives. Paddy Boyle has been appointed as Head of FX Product.

CSat Funds (CSAT) appointed Phil Bak as CEO. Prior to joining CSAT, Mr. Bak served as MD of ETFs at NYSE.

Following the hand-over of Kuwait SE (KSE)’s management to Boursa Kuwait, the BoD of Boursa Kuwait has replaced KSE’s committee, whose duties have ceased. In addition, Boursa Kuwait’s CEO, Khaled Abdulrazzaq AlKhaled, has been officially assigned as the Director of the Market.

SimCorp appointed Thorvaldur Flemming Jensen head of its Application Service Provider (ASP) Division and member of the company’s executive management team, reporting directly to the CEO.

Financial Calendar

26.04 – CFTC’s Market Risk Advisory Committee – agenda

26.04 – BVB AGM

27.04 – BGC Partners Q1 2016 Results 

27.04 – LSEG AGM 

27.04 – MOEX AGM 

27.04 – Nasdaq Q1 2016 Results

28.04 – CME Q1 2016 Results

28.04 – HKEX AGM

28.04 – SIBEX EGM & AGM 

29.04 – CBOE Q1 2016 Results 

29.04 – WSE Q1 2016 Report – announcement

Warsaw SE & WOOD & Company – conference call followed by a Q&A session to discuss Q1 2016 results 10:00 EST / 14:00 GMT / 15:00 CET Speakers: Paweł Dziekoński & Grzegorz Zawada – VPs of the GPW Management Board.

New! – 05.05 – Bats Q1 2016 Results

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

Share Notes

In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has sold a total of 2018 shares. New holding is 2280 shares. Employees paid a share price of NOK 86,98 per share, but were allowed a discount of 20% on purchases up to NOK 625.

Crowdfunding

RBI To Bring P2P Lending Under Regulation Soon

The Indian Express

Other stories

CFTC Spoofing Witness Says He’s Oystacher Whistle-Blower

Janan Hanna – Bloomberg

Matthew Wasko, who said he worked for CGTA Analytics before it closed last year, said Monday in Chicago federal court that his firm lost money trading against a spoofer, whom he has since learned was Oystacher. Wasko said CGTA partnered with HTG Capital Partners.

 

European Commission: Keynote Speech By Commissioner Jonathan Hill At ECB-European Commission Conference, Frankfurt, 25 April 2016

MondoVisione

 

Europex Response To ACER Consultation On The Functioning & Usefulness Of The Centralised European Register Of Energy Market Participants (CEREMP)

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FIA Releases SEF Tracker For March 2016

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