August 02 2016

elb2The new ASX CEO leads the parish news today. A man headhunted for a hefty fee from the ASX board to the, er, ASX executive – nice work if you are Korn Ferry. Pretty staggeringly bad news for ASX shareholders. Former banker Dominic Stevens faces the same challenges as his predecessor along with justifying a hefty investment in Digital Asset Holdings to go with it.

In the UK ructions continue as it seems hairdressers and stylists to the former Prime Minister’s entourage are being given awards but the biggest wealth creator and most successful entrepreneur in their midst, Michael Spencer, is apparently somewhat logjammed by the sad and the superannuated.

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 the link HERE to sign up.

Meanwhile in BigWorld, for those who like raw stories of competitive capitalism working for all parties, Ambrose Evans-Pritchard at the London Daily Telegraph is on a roll. His story on how the dynamic folks of Texas Shale Oil exploration are innovating through a huge oil bear market makes for fascinating reading.

Public Markets

Tullett Prebon H1 2016 Results

Tullett Prebon

Underlying, before exceptional and acquisition related items  (vs H1 2015): revenue £430.3m ($568m), 4%, operating profit £67.0m ($88.4m), up 11%, profit before tax £60.3m ($79.6m), up 14%.


New ASX CEO Dominic Stevens Took A Circuitous Route Back To The Exchange

James Eyers – AFR

Change Of Rules, Boss At ASX

John Dagge – Herald Sun

PLY: it is difficult to square the huge fee (think of it in terms of ASX’s most monopolistic fees and it is still a lot) paid to Korn Ferry for suggesting ASX move an existing board member onto their top executive position. The no outside board posts is just a reversal back to the previous form before this permission was given to Elmer to remain a TABCorp director. EFK meanwhile is complaining in the media because his career is in limbo as investigations continue but he has not yet been charged or cleared from his previous Cambodian problems.

Same Challenges Face ASX’s New Boss Dominic Stevens (subscription)

Glenda Korporaal -The Australian

ASX’s new CEO, Dominic Stevens (appointed yesterday), brings a different personal style to the job than his more high-profile predecessor, Elmer Funke Kupper, but the challenges remain the same.

How to grow the ASX’s revenues at a time when it is facing increasing competition at home and is hamstrung by political constraints when it comes to potential international tie-ups?

PLY: I note the market cap of NASDAQ Nordics is above that of ASX – that doesn’t strike me as a great advertisement for the Australian monopoly model but I applaud NASDAQ’s achievement. Moreover, isn’t the thing leaving ASX hamstrung the fact it is determined to be a monopolist and not a free markets provider of, er, free markets? Unbundle the monopoly and revolutionise the ASX blob must be a better approach than the stasis which is not serving Australia or the region.

Why ASX’s New CEO Dominic Stevens Needs To Crank Up Blockchain

Tony Boyd – AFR

It was surprising to see the amount of risk aversion shown by Dominic Stevens on the same day he parachuted from a board seat into the ASX CEO’s chair. Instead of embracing the blockchain evangelism of his predecessor, Elmer Funke Kupper, Stevens told the media on Monday he had to be “cautious” about the distributed technology.

QV Premium: ASX Monopoly – Brief – Part 3.

PLY: The one thing both Dominic Stevens and Elmer appear to have in common is not understanding the Blockchain beyond seeing it as a kind of mystical panacea to what was sold in mining villages by travelling salesmen. At least Dominic Stevens appears to appreciate he does not understand the logic for Blockchain / the DAH deal so far. Meanwhile a wandering academic from America has touched down in OZ and is talking Blockchain across the country. Expect headlines later in the week as a conference touches on Blockchain in Sydney with Professor Mike Aitken a leading figure in pushing the anti-thesis to Blockchain nirvana.


HKEX – Monday’s Trading in After-Hours Futures Trading Session Terminated Due To Issuance of Typhoon Signal No. 8


Current HKEX trading status: No Trading Today in Securities and Derivatives Markets due to Issuance of Typhoon Signal No. 8 – announcement here.


Bourse Split Over Listing Row

The Standard

HK Government Official Backs Regulator In Market Listing Reform Debate (subscription)

Enoch Yiu – SCMP

Concerns that the stock exchange is becoming a “factory for shell companies” is an issue that must be addressed because at stake is Hong Kong’s reputation as a financial center.

…Hong Kong Government has for the first time joined the heated debate over controversial market listing reforms by voicing support for proposals that would give the SFC more influence in the listing process. Secretary for Financial Services and the Treasury Chan Ka-keung said on Monday that the opposition “may be a result of misunderstanding about the content of the proposals”.


HK’s Relaunched Closing Auction Session Avoids Chaos, But Will It Help Boost Turnover? (subscription)

Enoch Yiu – SCMP

The revamped closing auction session for Hong Kong’s stock market has survived its first week without a repeat of the mess seen when it was first introduced in 2008, but the question is whether it has delivered much benefit to the local bourse.

PLY: Frustrating to see the capable Enoch Yiu doubling down on the media’s failed ‘auctions won’t work’ stories of last week.


Ex-CFTC Regulator Opposes Agency’s Demand for Flash Boys’ Code

Benjamin Bain – Bloomberg

CFTC shouldn’t force traders to hand over records of their algorithmic trading procedures until after a new administration is chosen, said Bart Chilton, the former commissioner. Instead, regulators should finalize less disputed parts of a sweeping proposal to register and boost oversight of automated traders, according to Chilton. That will prevent a legal fight that’s likely to extend past November, he said.

PLY: Given that the US agencies already have more data than they can cope with, I do not see what they can capably do with algo data other than become fodder for lawsuits as a result of conflicts of interest. Certainly the quants required to analyse are unlikely to last long on government salaries – thus creating all manner of headaches for what is a piece of highly subjective, intrusive and overly prescriptive piece of Obama era regulation.


BVB: The Quest For Liquidity

Stefanie Linhardt – The Banker

Bucharest SE (BVB) lacks only liquidity to move from ‘frontier’ to ’emerging’ market status. And a partnership with the pan-south-eastern European trading platform SEE Link could help the Romanian bourse get there.

QV Premium: SEE Link Project Brief.

PLY: SEE Link may help but the fetid reputation of Romania needs an upgrade too – and there is a lot of work to be done there, especially as BvB wastes time on ‘acquiring’ SIBEX which is just another dismal manipulation to salve the past inadequacies of some investors. Lacking “only” liquidity is rather a facile concept but the Banker doesn’t really understand the parish these days and just laps up whatever BvB tells it.


Sebi To Finalise Stricter Warehouse Regulations This Month

Rajesh Bhayani – Business Standard

Sebi will hold a meeting with Commodity Derivative Advisory Committee to discuss new regulations for warehouses any time during the current month.

Private Markets

TASE Privatization Bill Postponed To Knesset’s Winter Session


Legislation enabling the Tel Aviv SE (TASE) to become a for-profit company got pushed off until the Knesset’s winter session.

PLY: At this rate some dodgy local leveraged retail platforms will have binaries on the TASE privatization long before anything happens… Then again it might be best to have internal management and directional clarity in Tel Aviv before the market is slated for privatization?

Dividend News

Tullett Prebon – A 5.6p interim dividend will be paid on 14 November 2016, record date 2 September 2016.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat to small off, FTIL up 1.5%, Jignesh appeal against detention ongoing…

HC Allows FTIL To Disburse Salary & Other Expenses

Dilip Kumar Jha – Business Standard

In a separate case, Jignesh Shah’s judicial custody extended till August 12.

NSEL Case: Jignesh Shah’s Arrest & Detention Illegal, Lawyer Tells Court

Varun Chirumamilla – Bloomberg Quint

QV Premium: NSEL Scandal Brief – Main File.


Euronext Tech Issue Halts Derivatives Trading (subscription)


A technical problem forced Euronext to halt trading on its derivatives market for more than three hours on Monday.

PLY: #Embarrassing.


NSE Implements ITRS Geneos For Pattern-Based Analysis & ‘Early Warnings’ Across Global IT Estate


ITRS has announced the successful implementation of its real-time monitoring software, Geneos, across the National SE (NSE) global IT operations as part of a wider project to ensure it remains at the technological forefront of the region’s securities industry.


Shaping The Future Of Finance: Startupbootcamp Reveals Its Top 9 FinTech Startups To Watch In London


PLY: The heartening sign is several B2B apps in particular. I wish SBC FinTech a great programme and hope to drop in on progress at some stage.


Bats To Launch “BAM” Options Auctions, Offering Competitive Price Improvement Opportunity


Bats announced plans to launch the Bats Auction Mechanism (BAM), new functionality that provides price improvement opportunities for orders sent to its EDGX Options Exchange. Bats plans to launch BAM in November, pending SEC approval.

PLY: Outside of internalised functions such as Bats exchange, the experts in auctions incidentally, are the good folks of Perfect Channel whose sponsorship of Exchange Invest can be seen left. Fascinating systematic approaches to making auctions better…


US Federal Agencies Finalize Rule Exempting Certain Commercial & Financial End Users From Initial & Variation Margin Requirements



Ethereum: A Digital Currency Split in Two (subscription)

Wall Street Journal

The new digital currency ethereum is only about three years old, but after a contentious software upgrade, it already has split in two.

PLY: The Popular front for ethereum and front for poplar ethereum may be coming soon.

Career Paths

PLY: I am sorry to report that Piotr Borowski has left Warsaw Stock Exchange after 9 years. Piotr was one of the first 100 licensed brokers in Poland in 1991 and has been active on the FESE Management committee as well as with the European Issuers /FESE SME awards where Warsaw SE remains the most nominated enterprise with a victory in each of the year’s awards. I sincerely wish Piotr every success and am sure he will be a huge asset to his next employer.


SLT reports that Clearstream’s Global Head of Securities Financing Sales, Pascal Morosini, has resigned from his position on 29 July. Morosini has worked at Clearstream for more than 20 years.


DTCC added Lisa A. Pollina, former Vice Chairman for RBC Capital Markets to its BoD. Ms. Pollina has joined the Board’s Audit Committee, Finance/Capital Committee & Risk Committee.


FM reports that GAIN Capital’s institutional trading focused GTX unit has hired industry veteran Thomas Reichel as Director of Institutional Sales. Reichel joins the company after serving at Hotspot FX for over 10 years. He will continue to be based in Chicago and will be reporting to John Miesner, effectively restoring a long serving due at Hotspot FX.

John Miesner served at Hotspot FX for 14 years before joining Gain Capital’s GTX as MD & Global Head of Sales last year.


ASIC appointed Mr Simon Gray as the new Chairman of the Markets Disciplinary Panel, to serve a two-year term from 1 August 2016.


AlphaPoint announced that Rob Bender has joined its BoD. Most recently Rob served as EVP & CFO of Axioma.


Who is Michael Spencer?

Christopher Hope – Daily Telegraph

Michael Spencer is a close personal friend of David Cameron and has raised millions of pounds from City donors for the party. Mr Cameron has previously made three attempts to win a peerage for Mr Spencer, who was his first Conservative party treasurer when he became leader in 2006. Once dubbed the City’s richest man, he served until 2010 and helped to put the party onto a sound financial position- moving the party from a deficit of £8m into credit of £75m.

PLY: The ludicrous concept that is being applied here is the precautionary principle gone mad, demonstrating why the British government urgently needs a bonfire of the many anti-business figures amongst its civil servants who are neither ‘civil’ in any human sense nor ‘serving’ the best interests of the country. The UK blob is sending out a dangerous message – it’s better to be a dodgy drugged up celeb or a hairdresser to politicians than to do the hard graft of building the economy.

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.

Other stories

An EU Negotiator’s Tips For The City On Brexit Talks (subscription)

Lucy McNulty – Financial News

As one of very few EU trade specialists to be based in London and the wife of former deputy Prime Minister Nick Clegg, Miriam Gonzalez is well aware of the effort required to get opposing factions to reach an agreement. QV Premium: Brexit – Main File.

PLY: Mrs Gonzalez famously helped the Brexit cause by, correctly, noting the incapacity of the EU to appreciate its own faults during the referendum campaign. I admired her honesty amongst a Europhile cadre who were suddenly blinded to anything but perfection from Brussels – a daft trope which helped lose the historic vote for the fundamentally misguided Project Fear.


Remarks Before The Quadrilateral Meeting Of The FMLC/FMLG/FLB/EFMLG, SEC Commissioner Michael S. Piwowar, London, England, July 20, 2016


PLY: It seems more like a meeting of “AA” – Acronyms Anonymous in this case.


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