August 01 2016

elb2It has been a long 3 years since the NSEL scandal hit India. Still things are unresolved. For all the talk of GIFT city, free markets, added excitement for foreign investors being able to hold up to 15% of the equity of exchange operators etc, the reality is that India’s patchy parish brilliance is overshadowed by this exchange scandal which while outside the regulated remit has so far seen a failure in legal process. Hopefully it can be resolved soon and India emerge the stronger for it. We continue to monitor the situation in Premium: NSEL Scandal Brief – Main File.

Today, ASX appoints former banker as CEO while CBOE ended last week with encouraging results. ICE sells Creditex bodies to TNT in an interesting little structural shuffle – clearly if you find any brokers in a cupboard or cowering by the coffee machine, ring John Phizackerley’s team and they will come and take them away while providing a modest consideration.

Elsewhere it’s good to see the major newswires producing some more mature comment on Brexit with the realisation dawning that shuffling clearing is a huge challenge. (You can now access my Brexit files in Premium through this contents directory: Brexit – Main File).

The CEE CMU Capital Markets awards are coming up mid-September (see banner to the left). The first summit for CMU in CEE takes place on the same day, chaired by me – can you afford not to be there? Rates are very attractive: from €295 for the summit, to €595 for the Gala & Summit together. Email me or follow this link HERE to sign up.

Finally, if you want some added reading, the FESE European Exchange Report 2015 is out, the new African Exchanges Magazine is here and the July World Federation of Exchanges magazine includes an interview with Michel Prada amongst others.

Public Markets

ASX Appoints Dominic Stevens As MD & CEO


He takes up his new role today.

Mr Stevens’ remuneration mix will be 40% fixed ($2 million (inclusive of superannuation) per annum. This will be subject to annual review), 40% short-term incentive and 20% long-term incentive. More details in the release.

FAO: As rumoured earlier this year. EFK resigned in March (QV Premium: A Tribute to ASX CEO EFK).

PLY: I am genuinely surprised and disappointed for Peter Hiom who remains Deputy CEO and the man who has held the wheels on for many years. For all the foibles of the top guy, Peter has been the person who made the ASX function and I genuinely believe he deserved the top job. Good move by ASX to be remarkably transparent about remuneration incidentally – other parish entities could learn from this.


CBOE Q2 2016 Results


vs 2015: GAAP operating revenue $163.3 Million, up 10%, GAAP net income allocated to common stockholders to $50.7 Million, up 14%.


ICE Announces Agreement for the Sale of the Voice Brokerage Operations of Creditex to Tullett Prebon


ICE will retain the electronically traded markets and systems, post-trade connectivity platforms and intellectual property of Creditex, which serves the global CDS market. The terms of the transaction were not disclosed and the transaction is subject to FINRA approval.

PLY: TNT continues the ‘buy bodies’ approach and ICE relieves Creditex of some headcount. Someday, somewhere, somehow, we will prise the QE lunatics out of the central banking asylum and that mythical beast of old economics textbooks, the yield curve, will rise again. How many human brokers will live to see that day is still not clear – whether within the TNT reservation or elsewhere.


DB1 Says Acceptance Of LSE Deal Reaches 63.7%


After Winning Shareholder Support, LSE & DB1 Prepare For The Real Challenge

William Turvill – CITY A.M.

Statement By Gregor Pottmeyer, CFO Of DB1, On Results Of The Initial Tender Period


QV Premium: DB1-LSE Merger Brief.

PLY: 191 Days to the antitrust danger zone for DB1. We can tell it’s not been plain sailing as they send out the CFO to bat…


UK & China Regulators Discuss Framework For Financial Projects

Michelle Price – Reuters

FCA and CSRC are cooperating on a regulatory framework for a scheme for distributing fund products in each other’s jurisdiction and a proposed London-Shanghai link for trading shares.

PLY: Sounds like enough happening to justify the expense claims for a few meetings.


Ex-Goldman Owned Warehouse Pays LME $10m Settlement (subscription)

Henry Sanderson – Financial Times

LME has reached a $10 million settlement with Metro International Trade Services over transactions involving aluminium stored in Detroit when the warehouse operator was owned by Goldman Sachs.


LME’s Essex Stay Extended By “Two To Three Weeks” (subscription)


PLY: I am sure some hardy souls are just loving that reverse commute from Fenchurch Street while others must be enjoying the drive to work from around Essex.


JSE Faces Watchdog Probe Over R134bn (USD 9.6bn) Foreign Trading Error


The Financial Services Board (FSB) will investigate a programming error that caused the JSE to publish incorrect data about the trading of equities by nonresidents.


Turf War Between HK Regulators Escalates As HKEX Director Opposes Listing Reform (subscription)

Enoch Yiu – SCMP

Vincent Lee, a director of HKEX, said the exchange board has not approved or endorsed the proposed reform jointly announced on June 17 by the HKEX head of listings David Graham and the SFC executive director Brian Ho.


BVB Opens Up For Short Selling Operations

Romania Insider

Short selling Romanian stocks and other instruments traded on the Bucharest SE (BVB) will be available starting August 2.

PLY: Welcome to the world of Romanian stock borrowing – one could say that is already a common practice to get the right vote for your AGM.


Sebi Audit Flags Discrepancies At Warehouses

Jayshree P. Upadhyay – Livemint

Sebi audit of warehouses accredited by commodity exchanges has found discrepancies in both the quantity and quality of stock they hold.

Private Markets

Scottish Government “Welcomes” New Scottish SE

Nathanael Williams – Common Space

The Scottish Government has said it would “welcome” plans to launch an independent Scottish stock exchange. The comments were made in response to news that a group of former Nasdaq traders have submitted an application for approval to create Scotland’s first exchange since 1973.

The mysterious group has so far remained anonymous, saying only that more details about who is involved will be forthcoming if ‘Scotex’ receives approval.

PLY: Still no idea who this is – feel free to identify yourselves in confidence! Good to see regional exchanges back on the agenda, the UK (and other nations) can benefit from them.


Amman SE: The Launch Of The OTC Market


From 4th August.


Commodity Exchange To Begin In September

Daily News

Tanzania Mercantile Exchange (TCX) is expected to begin trading operations in September this year when cashewnut seasons begin.

PLY: Welcome to the parish, and good luck to TCX.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Both MCX and FTIL off about a half percent on the 3rd anniversary of the unresolved NSEL scandal which has gripped the newspapers once more:

NSEL Settlement Scandal Is Back In Spotlight

Ashish Rukhaiyar – The Hindu

FTIL Claims Rs21 Cr (USD 3.15m) As Immediate Expenses In Bombay HC

Jayshree P. Upadhyay – Livemint

… to meet immediate operational and routine expenses.

Where Are The Key Figures In The NSEL Saga Now?

Jayshree P. Upadhyay – Livemint

We take a look at the key people in the NSEL drama and what they are doing now.

What Has Changed In Commodity Market Norms After NSEL

Anirudh Laskar – Livemint

QV Premium: NSEL Scandal Brief – Main File.


Trading Commenced On PSX Friday After Technical Glitch Resolved

The Express Tribune


Fintech Startup Brings Institutional Corporate Bond Market To The Masses (subscription)

Anna Irrera – Financial News

PLY: You may discern a quotation herein from yours truly. It is a great example of regulatory dysfunction when fintech entrepreneurs are adding intermediation and cost to enable retail investors to get access to bonds which they are restricted from investing in due to the excessive regulatory fiat of Bond offering. This is madness. There needs to be an easy way to list debt so it can be transparently traded, not the ludicrous 100K tick size restrictive practice which is merely fuelling intermediaries.


CBOE To Broaden Distribution Of MSCI Index Data


Career Paths

ASX Board appointed Mr Dominic Stevens as its MD & CEO. He takes up his new role today. Mr Stevens joined ASX as an independent NED in December 2013. He has served on the Audit and Risk Committee, and on a number of ASX’s clearing and settlement boards.

ASX Board appointed Ms Melinda Conrad as a NED effective from 1 August 2016. Ms Conrad will stand for election at ASX’s AGM on 28 September 2016. Her appointment continues ASX’s Board renewal program. Ms Conrad is currently a NED of OzForex Group and the Reject Shop, and has previously been on the boards of David Jones  and APN News & Media.

PLY: Mrs Conrad is a NED of the Reject Shop… I could not possibly comment.


IEX finalized appointments to the Investors Exchange board of directors.

IEX has added William H. Donaldson, the 27th Chairman of the SEC and previously CEO of NYSE, Jeff Charney, CMO of Progressive Insurance, and Jonathan Mariner, former EVP and CFO of Major League Baseball, to its Exchange board of directors.

Other Independent Directors, previously disclosed, include Wade Massad, Co-Founder and Co-Managing Member of Cleveland Capital Management, Joseph Scafidi, Director of Trading of Brandes Investment Partners, Helen Scott, Professor of Law and Co-Director of the Jacobson Leadership Program in Law and Business at New York University School of Law, and Jeffrey Sonnenfeld, the Senior Associate Dean for Leadership Programs and the Lester Crown Professor in the Practice of Management at Yale School of Management.

PLY: Again I cannot emphasise enough how impressed I am to see the great William Donaldson as Chairman of IEX, this is an inspired appointment.


ICAP’s EBS BrokerTec hired Nicole Shumpert as Head of BrokerTec Direct, Americas on 1 August and will report to Serge Marston, Global Head of BrokerTec Direct. Nicole was previously Director & Head of US Treasuries Market Development at Tradeweb.


The Securities and Futures Commission (SFC) welcomes the appointment by the Financial Secretary of Ms Christina Choi as Executive Director of Investment Products for a three-year term effective from 1 August 2016.


ESMA Extends Call For Economic Advisors To Join Industry Panel


Financial Calendar

03.08 – ICE Q2 Results

03.08 – TMX Q2 2016 Results

04.08 – Bats Q2 2016 Results

04.08 – WSE 2015 PLN 2.36 dividend payment

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

Share Notes

JPX: Status Of Acquisition Of Own Shares


Other stories

UK Presses Ahead With Applying EU Securities Reform


UK’s FCA Publishes Second Consultation Paper On The MIFID II Implementation



FESE Publishes The European Exchange Report 2015


PLY: Fascinating reading it makes too…



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