August 05 2014

elb2

Another mid-summer’s day replete with interesting tidbits which are all free via Exchange Invest Daily. A 9360 page Chargesheet has been filed against Jignesh Shah (he’s still in jail but there is another bail hearing). – with 270 recommended prosecution witnesses! The Sino-HK through train is close to a test while frantic engineering goes on towards completion, UK House of Lords irritated by HFT, CME Europe CCP authorised under EMIR, SEBI giving FTIL more time to exit remains of MCX stake. FESE and WFE latest reports out too…

Meanwhile, a friendly reminder: if you like the free stuff and want to support us building out the industry platform for markets, please join our top tier, it’s only $120 per annum and keeps this daily newsletter free (You can subscribe here). Recent stories include:

New: Has CME Europe Chosen the Right Man?

CME GFI & the New IDB Paradigm

NLX: Measuring Up the Coffin?

FTIL: The Divestment of MCX

The Democratisation of Swaps aka The Citadel Inverse Repo Breakthrough

…more interesting insights will be following soon…

Public Markets

CME Europe Gains EMIR Authorisation (subscription)
Joe Parsons – FOW

CME Clearing Europe has received official authorisation from Esma to clear derivatives under Emir following a three month wait since rival key Eurex Clearing was approved.

PLY: Don’t forget amongst the various free resources we provide, is a list of CCPs authorised for EMIR which you can reach here.

Sebi May Give FTIL More Time To Exit MCX-SX: Deadline Ends Tomorrow
The Financial Express

Senior Sebi officials confirmed that FTIL would be given a grace period. So far, FTIL has raised R1,990 crore (USD 331 mln) from the sale of various ventures, but investor response to the loss-making MCX-SX, the country’s third stock exchange, is understood to be tepid.

Rakesh Jhunjhunwala bought 2% of MCX from FTIL on July 9th, and, on July 16th, bought another 490k (0.96%) shares of MCX. On 20 July, Kotak Mahindra Bank bought a 15% stake in MCX from FTIL for Rs.459 crore ($76.1 million),

PLY: A pragmatic approach. Simply killing MCX-SX is unwise. Giving MCX some more scope to manoeuvre is worthwhile, this market has huge potential albeit with the Damoclean sword of SEBi’s persistent regulatory micromanagement hanging over it.

Lords Pushes FCA To Tackle HFT (subscription)
Tim Cave – Financial News

The Economic Affairs Committee of the UK’s upper house last week wrote to Martin Wheatley, the FCAs’ chief executive, asking him if he believed “predatory trading was an issue in the UK equity markets”. The letter, signed by Lord Hollick, chairman of the committee, continued: “…if so, how does the FCA think the issue should be best tackled?”

PLY: Is a political chamber worth having if it can’t make up its mind?

`Through Train’ Plans Trial Run
The Standard

HKEx will conduct a trial of the Shanghai-Hong Kong Stock Connect program from the end of August until mid-September, the Shanghai Security Journal reported yesterday. The first batch of Financial institutions taking part in the scheme is required to confirm they are in the system between August 23 and 24.

Hong Kong Races To Complete Gateway To Mainland Stock Market
Michelle Price – Reuters

Hong Kong is working night and day to launch an initiative that will let global investors trade Chinese stocks from the city for the first time and secure the former British colony’s position among the world’s pre-eminent share markets.

The Hong Kong and Chinese governments agreed in April to allow international investors to trade Shanghai ‘A’ shares via the HKEx while mainland investors will be able to trade Hong Kong ‘H’ shares via the SE, subject to quotas both ways.

DB1 & PSE Sign MoU To Explore Market Data
Mondo Visione

Deutsche Börse Market Data + Services and Philippine SE (PSE) have signed a MoU to establish a market data cooperation between the two exchanges.

See also our Premium posts: Deutsche Boerse’s Asian Experiment and The Direction of Deutsche Boerse

PLY: Rumours that DB1 got chatting to PSE over a beer when lamenting their mutual inability to consummate well-planned mergers could not be confirmed as we raced to pixel…

Private Markets

Malta Stock Exchange: The Struggle For Liquidity
FTSE Global Markets

The Malta Stock Exchange is replete with new business ideas and initiatives, backed by a robust regulatory structure. Even so, business volumes remain thin. What can be done?

PLY: This article begins: “Pity the discrete stock exchanges of the world, struggling despite valiant efforts, to find their place in the growing pantheon of trading venues.” – Nope, sorry can’t agree, if you don’t know what to do, give us a call, this is a world of opportunity, as I have never ceased to remark for over 15 years now…

The article continues: “There is a lot of guff written about these exchanges…”

Now that was such a tempting remark but actually despite this being an apt description of much of the, well, “guff,” which passes for editorial in vanity publications like FTSE Global Markets, this is actually not a bad article, discussing the Valletta bourse and its operations. Although there is one slight canard – many such bourses are never headed for major liquidity, it’s the nature of the beast…regular fixes, fewer hours, better markets could be an ideal maxim here.

Oslo Børs: Delta – Millennium Exchange: T+2 – The Last Market Wide Test For The New Settlement Cycle – Test Plan And Participation
Mondo Visione

In regards to Oslo Børs VPS migrating from a T+3 to a T+2 settlement cycle for the Norwegian market 6 October 2014, the last market wide test will be held Monday 18 August 2014. The market wide test is not mandatory, but Oslo Børs VPS encourages all members, market data vendors and third party providers to participate.

About 700 Listed Firms Vanish From Regional Exchanges
Sachin P Mampatta – Business Standard

A few skeletons are likely to tumble out of the cupboard with the end of the country’s regional stock exchanges – among other things, in the form of what could be the largest-ever case of corporate disappearances in India.

A Business Standard analysis of corporate affairs ministry records and data from eleven regional exchanges reveals around 700 listed companies have likely vanished, without a trace of these entities at their registered addresses – many times more than the 87 currently identified as ‘vanishing companies’ in official records. The exchanges, too, have received no correspondence from these companies for a long time. According to investor association estimates, the total value of the ‘vanishing companies’ could be in excess of Rs 29,000 crore (USD 4.8 bln).

PLY: The ghosts of these companies retaining an exchange presence brings a whole new meaning to a “listed shell.”

Special Section: FTI, NSEL, India at the Crossroads’

PLY: MCX and FTIL bounce 5% as the market digests the wise decision to give some leeway to the sale of remaining shares held by FTIL.

NSEL Crisis: EOW Files Chargesheet Against FTIL Chairman Jignesh Shah
Khushboo Narayan & Ashish Rukhaiyar – Livemint

EOW of the Mumbai police on Monday charged Jignesh Shah, chairman of FTIL, with criminal misappropriation, forgery, criminal conspiracy, inducement for cheating and forgery of documents among others in connection with the fraud at NSEL.

PLY: 9360 pages of filing suggests those reading the MIFID III review have had it remarkably easy! Some 270 prosecution witnesses are suggested. If (and this is a big “if” – habeas corpus, assuage your Shahdenfreude, please, dear reader!) Jignesh were to be found guilty, he can face up to five years in jail plus possible appropriation of assets.

Technology

Thomson Reuters Launches Elektron Direct Feed – New Hardware Accelerated, Software Optimized Direct Feed Helps Firms Access Cost-Effective And Reliable Market Data
Mondo Visione

Elektron Direct Feed provides customers with high-performance access to real-time market data sourced directly from individual trading venues in a standardized, reliable and flexible format.

Adaptive Consulting & Software AG Announce Strategic Partnership Combining Adaptive’s Market Tech Expertise With Software AG’s Products
Mondo Visione

NSE Chief Calls For White Paper On Relevance Of High Tech Tools
The Hindu Business Line

Chitra Ramkrishna, MD & CEO of NSE has called for white papers on the relevance of automation, algorithmic trading and HFT, among others, in the securities market for a broad-based audience.

Inaugurating the second NSE-New York University Indian Financial Markets Conference in Mumbai on Monday, Ramkrishna, said, “There is very little research on Indian data. This event gives us the opportunity to interact with the Indian academia on market microstructure and how to influence/ impact policy and test policy intervention.”

PLY: A valid suggestion from Mrs Ramkrishna to assess more Indian data.

Career Paths

Eurex Clearing: The Supervisory Board of Eurex Clearing AG appointed Matthias Graulich (40) as member of the Executive Board of the company, effective 1 August 2014. As board member, he continues to be CCO, managing the department Clients & Markets; prior to his appointment he had already held this role as Head of Department since April 2013.

The Executive Board of Eurex Clearing AG now consists of Thomas Book (CEO), Heike Eckert, Matthias Graulich, Thomas Laux & Eric Tim Müller.

DB1 press release here.

TVNZ reports that former NZX chief Mark Weldon has been appointed to the top job at free-to-air broadcaster MediaWorks, replacing Sussan Turner.

Weldon will take up the group CEO position on Aug. 11 after Turner announced her resignation last month, MediaWorks said in a statement.

Financial Calendar

This week

ICE Q2 2014 financial results
TMX Q2 Financial Results
HKEx Financial Results
MarketAxess $0.16 quarterly cash dividend payment

New announcement

Markit Q2 Financial Results – Wednesday August 13th 2014
MCX India Q1 Financial Results – Wednesday August 13th 2014

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

Share Notes

Charles Schwab Corp EVP Jay L. Allen sold 19,693 shares Friday, August 1st at an average price of $27.51 (bargain $541,754.43).

Crowdfunding

RateSetter Claims “Largest P2P Lender In UK”; Raising £25 Million In July
JD Alois – Crowdfund Insider

In a statement UK based P2P lending platform RateSetter said they have strengthened their position as the largest P2P lender in the UK, handling a “market-leading” £71m in loans over the last three months. This past July (2014), the company became the first to pass £25m lent in a single month. The company has “matched” over £296 mln.

The RateSetter formula is built on a customer-first approach, not just the value that the company offers, according to the company. RateSetter’s customer service has ensured that it is recommended by 99% of customers*.

Other Stories

FESE Publishes The European Exchange Report 2013
Mondo Visione

The European Exchange Report represents a valuable source of integrated information on Europe’s exchange industry. The report includes key figures of each operator of Regulated Markets which are summarised on a one page statement allowing for easy and transparent comparison of their key financial figures.

WFE: Strong Rebound Of Equity Trading Volumes (+10%) In H1 2014
Mondo Visione

WFE published its H1 Statistics Market Highlights report.

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