April 27 2016

elb2It’s clearance & a likely change of direction but I don’t think it’s closure per se, at NLX, while NASDAQ announces a fascinating new product, Validator, designed to support exchanges, clearing houses and CSDs and accelerate time to market.

Meanwhile, entirely unremarkably, after all that lipstick and proclamation of being a modern thing, SWIFT looks as leaden footed in its denial of responsibility for its network as it looks behind the porcine lipstick, like being a modern payments solution. A Warnstorming is the current result as they blamestorm anybody who is not Swift. I think this can run and run – provided the broad media get the gist and haven’t succumbed to the Kool Aid of Swift largesse.  QV Satswana (banner on lhs), might be worth a chat for folks in Brussels & elsewhere…

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.

Public Markets

LSEG – IMS For The Period To 26 April 2016, Including Revenues & KPIs For Q1


Q1 total income from continuing operations up 9% to £387.6m (USD 566m).


Thomson Reuters Q1 2016 Results


vs Q1 2015: revenues: USD 2.79 bln, down 1%, operating profit USD 310m, down 14%.


BVB Shareholders Rejected The Urging Of Sibex-BVB Merger (Romanian)


In the AGM yesterday, BVB shareholders rejected SIF3’s proposal to urge the merger by setting a 120 days term. The shareholders approved though the start of negotiations with Sibex regarding a possible merger.

QV Premium: BVB – SIBEX Merger Discussions.


No PSE-PDS Unification For Now

Doris Dumlao-Abadilla – Inquirer

It’s officially dead.

QV Premium: PSE – PDEx Merger Brief.


German Bosses Behind LSE Takeover Insist It Must Be Based In Frankfurt If Britain Leaves The EU

Daily Mail

Now, the Goethe University survey of 400 top companies suggests business leaders feel the same.

QV Premium: DB1-LSE Merger Brief.

PLY: The DB1-LSE merger of equal desperation remains a happening deal, at least in the minds of a few dozen or so managers in London and Frankfurt but everybody else seems to be discounting it. Now we have Frankfurt going all 70’s rock star with crazy demands for the green room. Besides, the truth is clearly any merged entity would be run from Germany, it just happens to be London for now as it suits CarKen’s school run from Wimbledon. At the same time, Germany’s protectionist instincts are showing through as this deal progresses (some may say, regresses).


NYSE Joins Nasdaq Assailing Plan to Overhaul Trading Fees

Annie Massa – Bloomberg

NYSE Head Challenges Stock Trading Fee Reform Plans (subscription)

Nicole Bullock – Financial Times

The head of NYSE on Tuesday criticised a plan to test potential changes to stock trading fees, one of the most controversial elements of the US equity market.

“Simply stated, this access fee pilot will not only ensure that there will be more dark trading, but also that there will be worse prices on exchanges and off exchange,” Tom Farley, NYSE’s President said at a meeting of the SEC’s Equity Market Structure Advisory Committee.

PLY: The system is broken so we must change but when anything is changed lots of people protest. Thus a great lesson in regulatory failure is writ large. US equity structure feels a bit like 1970’s British industry – and so far not a strand of Thatcher-esque leadership from the SEC to rescue the bickering parties away from the dismal status quo to a better place.

Opening Remarks At The Equity Market Structure Advisory Committee Meeting, SEC Chairman Mary Jo White, April 26, 2016


Remarks By SEC Commissioner Michael S. Piwowar At The Spring 2016 Equity Market Structure Advisory Committee Meeting



New LME Warehouse Reform Backfires In Short-Term, Extending Queue

Eric Onstad – Reuters

New rules taking effect in May to slash delivery backlogs at LME network of warehouses have inadvertently lengthened queues to get metal out of storage.

The wait to take delivery of aluminum at a key Dutch warehouse has more than doubled to some eight months since the end of February, as metal owners rushed to take advantage of a quirk in the rules.

PLY: Given the multitude of warehouses available (650 in 15 countries), it is unfair to suggest the world will end due to a hiccough in Vlissingen….(Oh and that photo depicts the old LME building, they moved out a few months back – maybe there’s a queue at Reuters’ photo library for stock pics).


HKEx To Establish Metal Trading In Qianhai, Its First Mainland China Entry (subscription)

Enoch Yiu – SCMP

HKEx plans a metals trading platform and warehouse in the special economic zone. An announcement is likely to come on Wednesday.

PLY: Exciting news just as internal metals trading in China is turning a touch molten in volume terms.


Mifid II: A Cheat Sheet On HFT, Market Data & More (subscription)

Tim Cave – Financial News

The army of regulatory, legal and government affairs specialists in Europe’s financial industry is once again earning its keep – buried under a fresh mountain of text from Brussels.

Private Markets

Bitstamp Could Face ‘Bumpy’ Road in Europe Despite New License

Pete Rizzo – Coindesk

The news, reported yesterday, received varying reactions from market observers, with remarks divided between those who saw Bitstamp’s license as a boon for an industry still trying to shake its association with crime, and those who felt that Bitstamp may face more hurdles in its attempt to offer services throughout the European Union.

PLY: As I noted, a payments licence is a great thing but an exchange licence it isn’t…

Dividend News

Thomson Reuters quarterly dividend of $0.34 payable on June 15, 2016, record date May 19, 2016.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up nearly 2%, FTIL nearly 1% higher.


Nasdaq Launches Validator Testing, Quality Platform

John Brazier – Waters Technology

Nasdaq has launched a new testing and quality assurance platform, Validator, designed to support exchanges, clearing houses and CSDs and accelerate time to market.

PLY: Very interesting move as NASDAQ launches into territory which was first explored as an industry initiative FiQA by Cinnober and others while Imandra by Aesthetic Integration was a first mover in contiguous ground for testing algorithms. This is a good idea from NASDAQ and bound to gain traction given their strong reputation and broad existing exchange user base.


TMX Backs New Effort To Boost Canada’s Fintech Ecosystem


Decentral, Canada’s foremost hub for disruptive technology, announced an open call for financial professionals to join Accelerate Finance, an organization working to transform Canada into a global force for finance and fintech innovation. A founding sponsor of Accelerate Finance is TMX.


Diamonds Set To Dazzle Investors On MOEX

Anna Kuchma – RBTH

MOEX is set to start trading in diamonds through futures contracts.

PLY: Russian market gets bling derivatives. Interesting move.

MOEX FX Market Enhancements



JPX: Calculation & Publication Of JPX/S&P CAPEX & Human Capital Index


Career Paths

NLX Puts Three Seniors On Redundancy Risk (subscription)

Alice Attwood – FOW

Nasdaq has put three key senior employees of NLX at risk of redundancy, less than a week after the firm said CEO Charlotte Crosswell will step down next month.

Stuart Deel-Smith, senior MD for market structure & product development, Darren Butler, director of business development and Toby Bryans, director of onboarding, have been put at risk of redundancy.

PLY: I don’t think this is the end of the road for the NLX licence but I suspect a repurposing is in the works as NASDAQ management opt for a pragmatic reshuffling of those who had been closely identified with the previous management approaches. I take no pleasure in seeing anybody made redundant but NASDAQ is right to clean house before a new strategy is delivered to this MTF. QV Premium: NLX Brief.

TMX announced the retirement of John McCoach, President of TSX Venture Exchange (TSXV), effective December 31, 2016. Mr. McCoach has been President of TSXV for six years. He will remain in his capacity as President of TSXV until his retirement date at the end of 2016. TMX has not yet appointed a successor to Mr. McCoach.

Axioma launched Tokyo office and hired Kiichi Takai, formerly of MSCI as Senior Consultant – Multi Asset Class Risk to support growth in the region. Takai will report to Olivier d’Assier, Asia Pacific MD.

Axioma also appointed Sunay Shah as Head of Multi-Asset Class Solutions for EMEA. Shah was most recently Head of Financial Services, North America at cloud-collaboration firm HighQ. Prior to that he was VP Strategic Sales at S&P Capital IQ and CEO & Co-Founder at start-up CDO Software.

Neil Richards was appointed as a member of Axioma’s European sales team. Richards joins from S&P Capital IQ.

Financial Calendar

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

New! – 09.05 – LendingClub Q1 2016 Results

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

Analyst Notes

Exane BNP Paribas Set ‘Outperform’ Rating On LSE – Price Target 3000

Breaking The Exchange Oligopoly Without (Too Much) Pain

Kurt Dew – Seeking Alpha

The exchanges have become the protected darlings of our government. They are the most unpopular protected darlings since Marie Antoinette. The French got along OK without Marie Antoinette, but we cannot get along without the exchanges.

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


LendingClub Looks at New Deal to Crack Tough Market (subscription)

Peter Rudegeair & Telis Demos – Wall Street Journal

LendingClub is planning its first sales of bonds backed by its unsecured loans and has been working with Goldman Sachs and Jefferies on the offerings, which are slated to be discussed with potential investors as early as this week.

Other stories

ESMA Publishes Response To Commission Green Paper On Retail Financial Services



Barclays Traders Were Anxious About Libor Submissions in 2007

Patrick Gower – Bloomberg

Barclays Plc employees were voicing concerns to senior executives about the accuracy of their Libor submissions as early as 2007, according to e-mails released Tuesday during a London trial of five traders accused of fixing the benchmark rates.


Statement Of CFTC Chairman Timothy Massad Before The CFTC’s Market Risk Advisory Committee


Statement Of CFTC Commissioner J. Christopher Giancarlo Before The Market Risk Advisory Committee Meeting


Statement Of CFTC Commissioner Sharon Bowen Before The Market Risk Advisory Committee


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