August 14 2015


 Jo’burg profits very impressive as BM&F Bovespa enjoys profit leap despite a tricky Brazilian domestic economy, despite being in the run up to hosting another of those athletic tournaments hotly contested by druggies. Meanwhile it’s Friday, it’s a heatwave and the news flow is so utterly unrelenting that I feel obliged to note that the merry posse of original beta testers when first pitched Exchange Invest all initially remarked there would not be enough news to fill a market infrastructure daily newsletter… Welcome to Exchange Invest Daily number 567… Happy scrolling (you can’t afford not to):

Public Markets

BM&FBOVESPA Q2 2015 Results

vs Q2 2014: net revenues R$554.6 mln (USD 157 mln), up 19.6%, adjusted net income R$436.8 mln (USD 124 mln), up 17.2%, adjusted EPS R$0.243 (USD 0.07), up 19.8%.


JSE H1 2015 Results

JSE In Strong Position To Compete

vs H1 2014: Headline EPS (HEPS) up 25% to 490.3c, EPS up 29% to 503.9c, profit up 29% to R430m (USD 33.5 mln).

PLY: CEO Nicky Newton-King comes out swinging at any new competitors, as well as the commodity-linked legacy battle across London-Toronto-Sydney et al.


Despite Shenanigans At Credit Suisse, Barclays, ITG, Don’t Dismiss Dark Pools: Convergex CEO
Gregg Greenberg – TheStreet

Dark pools are back in the headlines following reports about Credit Suisse, Barclays (reported here) and ITG (settlement with SEC reported yesterday), settling allegations of manipulation with the government.  Eric Noll, CEO of Convergex, says the current commotion is nothing new and won’t likely last long.

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

PLY: How long will the current dark pool ‘crisis’ last? I reckon somewhere in the region of 30-50 million dollars.


Insider-Trading Defendant Will Be Released On $3 Million Bond (subscription)
Nicole Hong – Wall Street Journal

Igor Dubovoy, suspected of trading on information stolen from newswires (reported this week), will wear an ankle bracelet.

PLY: Dubovoy has helped steal millions but gets an ankle bracelet while the hound of Hounslow remains banged up, (thanks to the Blair government’s inability to negotiate a just treaty). I have no time for either but this is disproportional. Moreover, how confident would you be releasing somebody with known links to high tech hackers, wearing a digital ankle bracelet? No, me neither…


Buffett’s Business Wire Seeks To Reassure Clients After Hacking
Noah Buhayar – Bloomberg

PLY: The irony will not be lost on you, dear reader, that a year ago the sage of Omaha ensured the low latency sales channel was closed down…only for a spot of freelancing to unofficially reopen it with no revenue benefit to shareholders.


BP Traders Rigged Gas Market, Says Judge (subscription)
Gregory Meyer – Financial Times

BP faces the prospect of fresh regulatory fines after a judge ruled that its energy traders rigged a US natural gas market in the aftermath of a 2008 hurricane.

PLY: Since President Obama’s self-righteous outburst when he had to cancel a golf game to watch oily pigeons in the Gulf of Mexico and attacked “British Petroleum” as if it had been applying Imperial corporate governance practice circa 1750… it has not been a happy time for the UK-domiciled energy giant.


Currency-Rigging Lawsuit Settlements Rise Past $2 Billion
Nate Raymond – Reuters

Investors have recovered more than $2 billion in settlements with nine banks over claims of price-rigging in the forex market, and are continuing to pursue claims against seven other banks. HSBC, Barclays, BNP Paribas and Goldman Sachs are among the latest banks to reach settlement in the class action litigation, Christopher Burke, the lawyer, said in federal court in Manhattan.

PLY: Meanwhile the lawyers got paid so much that…hold on a second, can’t we create a class action lawsuit exchange? It would be much much cheaper, surely… Don’t know why I didn’t think of that earlier, I mean those “everything starts at 2 basis points” bankers are like pussycats compared to the legal eagles…


CFTC Staff Issues Extension To Time-Limited No-Action Letter on the Applicability of Transaction-Level Requirements In Certain Cross-Border Situations

Statement Of CFTC Commissioner J. Christopher Giancarlo On The Fifth No-Action Letter Delay Of Staff Advisory 13-69 (Washington, DC)

PLY: Commissioner Giancarlo again taking the mantle of finest free marketer in a US regulatory agency (currently being passed on by the SEC’s brilliant, outgoing, Commissioner Dan Gallagher) with this pithy, pertinent, intervention:

“As I have repeatedly stated, the benign sounding ‘Staff Advisory 13-69’ should be permanently withdrawn because it represents a threat to American jobs and vital financial markets. When a regulatory action needs five delays, I think we all can admit that it is just not workable and should be scrapped. Doing so would be a good first step to helping market participants cope with an increasingly complex, conflicting and costly array of CFTC cross-border regulations.”

…Wonder how long it took staff to uncross their legs after that rather brutal excoriation.


ESMA Recommends Changes To EMIR Framework

ESMA On Derivatives Markets: The Key Takeaways (subscription)
Financial News

Europe’s markets regulator proposes significant changes in its submission to the European Commission’s review of the derivatives rulebook.

PLY: In some ways, encouraging that ESMA has kept thinking but at the same time a slightly damning indictment of the incapacity of regulators and the market to genuinely think through the outcomes. What really worries me is that if these are the ‘bumps in the carpet’ already perceived then we can rest assured a lot more are lying under the tectonic plates and quietly waiting their moment to exude magma.

Private Markets

Irish SE To Undergo €10 Mln Expansion

Irish SE is to undergo a €10 million expansion with the acquisition of a building on Foster Place in Dublin City Centre. The new building will be incorporated into the existing premises on Anglesea Street to create a single campus headquarters.

PLY: A great move as the Irish SE finds itself in that delightful but tricky position of being a guardian of a wondrous historic building. This solution is an ingenious ways to support the expansion of the ISE.


Japan BTC Exchange BitFlyer Raises $4M In Funding From Japanese VC Firms
Eugenia Romanenko – Coinspeaker

Dentsu Digital, Mitsubishi UFJ Capital Company and others keep investing: bitFlyer raises $4m in this round.

FAO: In September 2014 BitFlyer added a bitcoin crowdfunding platform called ‘fundFlyer’ to its feature list, launching the first service of its type in Japan. In October 2014 the company raised $236k from New York-based Bitcoin Opportunity Corp. to fund its overseas expansion.


The 21 Companies That Control Bitcoin
Rob Price – Business Insider

PLY: A who’s who of mining, with, naturally, quite a few remaining anonymous.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 1%, FTIL flat but a little movement on the festering fiasco:

Delhi Police To Question Jignesh Shah Next Week
N Sundaresha Subramanian – Business Standard

A district court Jignesh Shah in the coming week to join the investigation by the city police’s EoW.

The order came after the latter objected to Shah’s bail, citing his non-cooperation in investigation into a case filed by Classone Exports, a city-based investor of NSEL. Classone claimed it was cheated of Rs 22.65 crore ($3.48 mln) it had invested in sugar contracts.

The Delhi Police probe had faced resistance from its Mumbai counterpart, whose own EoW had objected to a separate investigation, saying its scrutiny had made significant progress in the payment crisis that hit NSEL in July 2013.


Sebi To Conduct Fit & Proper Test On Commodity Brokers
Jayshree P Upadhyay – Business Standard

PLY: A step in the right direction. For once I can agree with SEBI stepping up regulation: squeezing out those wrapped up in the NSEL crisis is the only way forward.


A New Fast Lane for Traders Spurs Plan to Thwart Exploiters
John Detrixhe & Sam Mamudi – Bloomberg

PLY: Very interesting: EBS adds a spot of IEX style chicanery to thwart queue hopping HFT.


Regulatory Options & Debate Heats Up On HFT
Joyce Moullakis – AFR

Read our Premium A Taste Of HFT Scandal Brief – Part 6.


ItBit Reveals Bankchain Project Won’t Use Bitcoin
Pete Rizzo – CoinDesk

ItBit has revealed new details about its formerly top-secret Bankchain project, a private consensus-based ledger system aimed at appealing to enterprise financial institutions.


The Perfect Recipe For A Fixed Income Platform (subscription)
Financial News

Financial News has canvassed opinion for the must-have ingredients for success in the highly-competitive sector.

PLY: QV Henry Ford: “If I had asked people what they wanted, they would have said faster horses.”

Oh and that background hum you can hear is several hundred up and coming bond platforms convincing themselves they fit seamlessly into the 5 key areas outlined here.


Plans Afoot To Cross-List ETFs On African Bourses

JSE said on Thursday that discussions were taking place between market participants in Nigeria‚ Kenya and SA to launch the cross listing of ETFs on the continent’s larger exchanges.

Read our Premium Rise of Africa Brief – Part 5.


MOEX To Launch Mini MICEX Index Futures

Career Paths

FOW reports that Michael O’Connell, CME’s MD & Head of Global Business Development, has left the company. Presumably his CME Europe Board place will be taken by his successor or a similar internal candidate.

Finextra reports that Options appointed the former NYSE Technologies sales executive, Helen Viccars, to the firm’s global sales team.

Bankless Times reports that Lending Club hired Sandeep Bhandari as its Chief Credit Officer, effective Aug. 24.

Financial Calendar

Next week

19.08 – NZX H1 2015 Financial Results

20.08 – ASX Full-Year 2015 Results

20.08 – Record date Thomson Reuters $0.335 quarterly dividend

21.08 – Record date TMX $0.40 dividend

21.08 – Record date BGC Partners’ BoD $0.12 dividend

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

Analyst Notes

Barclays Hoisted Price Objective On CME From $96.00 To $100.00 – “Equal Weight” Rating

Confessions Of An Analyst (subscription)
Financial Times

The flaws of buy-sell ratings on equities, according to Daniel Davies.

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


Invesdor Raises €1M To Launch Its European Expansion As First Licenced Equity Crowdfunding Platform

The Helsinki-based equity and debt crowdfunding service Invesdor Ltd raised a million euro crowdfunding round through its own service. The round had 143 investors from 16 different countries.

PLY: Somewhat annoyingly misleading hype which won’t help Invesdor in the long-term, I fear. Seems they have a broker licence, don’t think they are first to get one… The Crowdcube deal recently has more substance, albeit the crowdfunding universe is barely nascent.

Other stories

MOEX: New Free Float Methodology To Take Effect

SEC Market Structure Data: Q2 2015 Data Now Available

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