August 12 2015


LME profits soar to such a degree it will likely annoy some folks – but not HKEx CEO Li nor his shareholders… Oslo Bors numbers encouraging. Hackers indicted as Dark Pools increasingly become the secret cash cow powering America’s regulatory system. At least it makes a change from raiding banks like Barclays over isolated instances of juvenile trader boasts, I suppose. CME reduces headcount, another forex takeover and lots of interesting nuggets to behold, happy scrolling…

Public Markets

HKEx 2015 Interim Results


LME Q2 Profit Doubles As Trading Fee Hike Pays Out


H1 2015 vs H1 2014: Revenue and other income HK$ 6,853 mln (USD 884 mln), up 48%, EBITDA HK$ 5,273 mln (USD 680 mln), up 65%, profit HK$ 4,095 mln (USD 528 mln), up 73%, basic EPS HK$ 3.49 (USD 0.49), up 71%.

Oslo Børs Q2 2015 Results


vs Q2 2014: operating revenues NOK 234 mln (USD 28 mln), up 6%, EBITDA NOK 123 mln (USD 15 mln), up 4%, earnings NOK 82 mln (USD 10 mln), up 22%

SEC Charges 32 Defendants In Scheme To Trade On Hacked News Releases


U.S. Identifies Insider Trading Ring With Ukraine Hackers

Keri Geiger – Bloomberg

Hackers’ $100 Million Insider Shop Sold Data On Demand

Keri Geiger – Bloomberg

Traders Busted After Enlisting Hackers To Play Stock Market To Net $100 Million

Priya Anand – MarketWatch

Remarks At A Press Conference Announcing Major Enforcement Charges Involving A Massive Hacking Trading Scheme, SEC Chair Mary Jo White, Newark, New Jersey


As rumoured yesterday, U.S. authorities charged 32 defendants on Tuesday with stealing non-public information about corporate earnings.

PLY: As I noted yesterday, this is just the same old same old crime as the analogue era, albeit amply demonstrating the scale the digital world enables: $100 million profits, 100,000 stolen press releases . Admittedly that data is according to the SEC complaint but as we know American Prosecutors never inflate anything or use hyperbole so clearly it is precisely accurate.

Readers who have recently bought IT systems will not how much tends to be outsourced to Ukraine nowadays. Clearly the forces of darkness remain active in the country too…

When it comes to any hackers currently imprisoned by the US, I fully support their providing free support for some reduction in sentence by showing the government how to undertake their dark arts. They could start by unravelling Hillary Clinton’s email server for instance. That would be a good public service delivered at low cost to the taxpayer.

Dark Pools Back In The Dock As Regulators Scrutinise ITG (subscription)

Philip Stafford – Financial Times

US markets regulators are set to impose a record fine of roughly $20m. The scale of the pending fine propels ITG to the top of a growing list of alternative trading venues that have been punished for infractions.

Read our Premium post: “ITG, Dark Fines & A Coalition for Change.

Credit Suisse, Barclays In Talks To Settle ‘Dark Pool’ Allegations (subscription)

Bradley Hope, Emily Glazer & Christopher M. Matthews – Wall Street Journal

Credit Suisse and Barclays have entered settlement negotiations with NY AG & SEC over allegations of wrongdoing in the private trading venues. CS could pay a new record fine in the sector…

Last month EI reported that NY AG Eric Schneiderman’s office was preparing a civil case against Credit Suisse, the operator of the Crossfinder dark pool.

Read our Premium NY AG – Barclays Dark Pool Brief and A Taste Of HFT Scandal Brief – Part 6.

PLY: Hmmm, American regulators find remarkable inconsistencies within more foreign owned venues.

Euronext Looking Inward, Upward (subscription)

Waters Technology

It’s no secret that exchanges worldwide are looking for that killer edge. Some are spending large sums on technology platforms to diversify into new markets, while others are seeking to open new venues. Euronext, however, is taking a more internally-minded approach.

Don’t Ban HFT Strategies, But Put Safeguards In Place Instead

John D’Antona – Traders

PLY: Highly pertinent note addressing the futile fixation of Indian regulators who clearly believe in contra-Canutism. As always the folly of the regulators’ incapacity to understand technology is writ large in such outmoded canards as minimum resting times for orders…

Private Markets

Palamon & Corsair Capital Acquire FX Firm Currencies Direct


Private equity firms Palamon Capital Partners and Corsair Capital have jointly acquired Currencies Direct, a provider of fx and international payment services to over 150,000 registered retail clients as well as corporate fx services to SMEs. The deal value exceeds 200 million pounds ($310 million), and the transaction is expected to close by year-end subject.

Read our Premium Exchange Deals Brief.

NSE Partial Stake Sale In Three Months

R. Srivats – The Hindu Business Line

IFCI is hopeful of offloading a portion of its holding in the National SE (NSE) in next three months, its MD & CEO Malay Mukherjee has said. This optimism stems from the fact that this Government company had recently roped in a new merchant banker – IDFC Securities – to find a buyer for partial stake sale in NSE, which is the country’s largest bourse by profits.

“We are looking to offload 2.5% stake – the same as in the process tried last year. We are now ready to part even 2 % stake if we get a good price”

Read our Premium India – NSE Sales Brief

Fintech Startup Fights Trademark Claims From Firm Tied To Rival

Tanaya Macheel – American Banker

Eris Exchange is trying to stop Eris Industries, a London tech startup with an office in Essex, Conn., from using the name Eris in markets where both companies operate. (Fittingly, the word is Greek for “strife.”)

PLY: Hmmmm. I see a point but at the same time, startups need to concentrate on their product and a working solution is to offer a reasonably clear opt-out on home pages and documentation that they are not related.

Coinsetter Submits BitLicense Application, Accepting Customers In New York Legally

Mike Dautner – Payment Week

PLY: Coinsetter perhaps envisages they can run against the trend and hoover up business as others leave the NY field fearful of the overly prescriptive BitLicence.

Huobi CEO Pushes For Bitcoin Regulation In China


Leon Li, The CEO of Huobi, one of the biggest Chinese Bitcoin exchanges, has penned a journal seeking regulations for the digital currency sector.

PLY: Statistic of interest here: China hosts more than 80% of the world’s digital currency transactions.

Dividend News

HKEx Board declared an interim dividend of HK$ 3.08 per share (2014: HK$1.83 per share) for the year ending 31 December 2015,  payable in cash with a scrip dividend alternative. Record date of August 28.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX down 3%, FTIL down 1.5%…and as it’s Monsoon season in India, they don’t even have the northern hemisphere excuse that it’s summer holidays for not resolving the festering fiasco of NSEL.


UBS Taps Global Fintech Start-Ups For Ideas (subscription)

Financial News

Swiss banking group UBS is opening its doors to tech start-ups across the world in a bid to find answers to some of the big challenges the financial industry faces in the digital age.


ICE World Cotton Contract To Begin Trading In November


ICE’s world cotton futures contract will begin trading on Nov. 2, 2015, pending regulatory approval.

As reported in July, the US Congress approved a bill July 9 that will allow U.S. exchanges to handle foreign-grown cotton at delivery points around the world.

In October last year EI reported that ICE was aiming to launch a global cotton contract.

GMEX IRS Constant Maturity Futures Successfully Launched


PLY: Trade executed, cleared, settled and of course spiralling towards maturity as the curve moves…

Tougher Bank Rules Hit Bond Market Trading (subscription)

Robin Wigglesworth – Financial Times

A report on deteriorating bond market trading conditions commissioned by lobbyists GFMA & IIF, has urged regulators to ameliorate the “liquidity” crunch by revisiting parts of the post-financial crisis supervisory framework.

Read our Premium post On Bonds & SEFs and Premium brief The Bond Platforms Rush Part 1,Part 2.

BaFin Worried Over Scale Of FX Manipulation (subscription)

Financial News

German watchdog expects to conclude its investigation into possible misconduct by the end of next year.

PLY: Wonder if they spent much time investigating fx markets in neighbouring Switzerland?


FTSE Russell Announces Expansion Of Global Factor Index Series


Career Paths

Automated Trader reports that in the wake of Remco Lenterman stepping down from his role as Chairman of FIA EPTA following his departure from IMC. Current vice-chairman Mark Spanbroek, (Chairman of CME Europe, non-executive director at Aquis and formerly Secretary General of EPTA)  takes the helm as acting Chairman.

PLY: I can only wish Remco Lenterman every future success once more. He has been perhaps the most astute and effective communicator for the benefits of HFT business in markets. The highly competent Mark Spanbroek has great understanding of markets in detail but may struggle to deliver the same data rich crunchy communications that have become Remco’s hallmark.

CME Cuts 3% Of Employees In Another Round Of Reductions


CME eliminated about 80 workers on Aug. 6, with about half of the jobs coming from its technology sector. The rest of the reductions were spread among other functions, as part of a “restructuring announced last fall designed to eliminate bureaucracy and improve our ability to serve our global client base more efficiently,” spokesman Laurie Bischel said on Tuesday.

ESMA Vacancy Notice – Economist/Risk Analysis Officer (Deadline: 18/09/2015)


Deadline: 18 September 2015. Please refer to our vacancy page for the details on this position (Ref. 2015/VAC19/AD5) and how to apply.

ESMA Vacancy Notice – Supervisory Officer (Deadline: 18/09/2015)


Deadline: 18 September 2015. Please refer to our vacancy page for the details on this position (Ref. 2015/VAC20/AD6) and how to apply.

Financial Calendar

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

Share Notes

NASDAQ President Hans-Ole Jochumsen sold 26,706 shares on Aug 6, 2015 at $52.72 (bargain $1,407,940.38).

Interactive Brokers CIO Thomas AJ Frank sold 13,025 shares on Aug 6, 2015 at $42.96 per share (bargain $556,263.50).

Check our Share Notes page in Premium.

Analyst Notes

Barclays Increased Target Price On ICE From $268.00 To $274.00 – “Overweight” Rating

Barclays Boosted Price Objective On NASDAQ OMX From $58.00 To $60.00 – “Overweight” Rating

Barclays Raised Price Objective On CBOE From $54.00 To $56.00 – “Equal Weight” Rating

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

Other stories

FIX Community: New Regulatory Subgroups Focused On MiFID


Pearson To Sell 50% Stake In The Economist Group


Pearson agreed to sell its 50% stake in The Economist Group for £469 million in cash.

EXOR S.p.A. has agreed to purchase 27.8% of The Economist Group’s Ordinary shares for consideration of £227.5 million and all of the B special shares for consideration of £59.5 million from Pearson. Pearson’s remaining Ordinary shares will be repurchased by The Economist Group for a total consideration of £182 million.

Last month Pearson agreed the sale of FT Group to Nikkei Inc. for a gross consideration of £844 million (USD 1.3 bln),

PLY: Pearson will concentrate on its educational strategy which actually doesn’t look much better than the mess it has made of its media businesses, alas.


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