August 22 2016

elb2The offices throb again and Exchange Invest daily is back in its more usual format. Thanks for all the plaudits for the Summer Special edition too.

Today we are catching up with the stories not already highlighted last week…

Meanwhile the second CEE Capital Markets awards are coming up mid-September (see banner to the left). The first CEE summit for CMU 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.

Public Markets

HKEX, Tradeweb In Talks Over ‘Bond Connect’ Platform

Saikat Chatterjee, Michelle Price & Umesh Desai – Reuters

PLY: Very interesting, Tradeweb “to connect China’s $7.5 trillion bond market with overseas investors.”

 

Euronext Enters Into A Definitive Agreement For 20% Stake In EuroCCP

MondoVisione

PLY: As first reported: May 13 2016.

QV Premium: Exchange Deals Brief – Stake Changes.

 

Brexit Means EuroCCP May Follow Clients To The Continent (subscription)

Samuel Agini & Tim Cave – Financial News

PLY: Maybe. Albeit so far nobody seems to be leaving London.

 

ICE Expected Closing For Acquisition Of S&P Global’s Securities Evaluations & Credit Market Analysis

MondoVisione

PLY: October 2016.

 

ICE Statement On Trayport Acquisition

MondoVisione

ICE Refutes UK Competition Findings (subscription)

Philip Stafford – Financial Times

ICE is willing to commit to keeping Trayport open to rivals in response to UK antitrust authorities’ concerns the deal could reduce competition in European energy trading.

QV Premium: Exchange Deals Brief – M&As.

 

Philippine – SEC Agrees To Review Merger Of Exchanges

Jenniffer B. Austria – Manila Standard

Philippine SE must have concrete plans on transaction cost reduction and definite corporate structure when the latter submits a new proposal to merge the fixed-income and equities exchanges.

SEC Chairman Terestita Herbosa said in an interview the corporate regulator was open to reviewing another proposal from PSE on the merger of the two exchanges.

PLY: The soap opera merger continues.

QV Premium: PSE – PDEx Merger Brief.

 

HKEX To Start Stock Volatility Control System

Eduard Gismatullin – Bloomberg

System is similar to models used in Tokyo and Singapore.

 

Approval Of Shenzhen Hong-Kong Stock Connect

MondoVisione

China/Hong Kong Regulators Announce Shenzhen-Hong Kong Stock Connect

MondoVisione

HKEX: Shenzhen-HK Stock Connect & Shanghai-HK Stock Connect

MondoVisione

Investors Cool On HK Link With ‘Wild West’ Shenzhen

Saikat Chatterjee – Reuters

A plan to connect the giant stock markets of Shenzhen and Hong Kong offers global investors tempting access to China’s fast-growing tech sector, but high valuations and a reputation for wild speculation are likely to keep many buyers at bay.

HK Lifts Status as Gateway to China’s Wealthy – Li

Bloomberg

Shenzhen-HK Stock Connect Party Open, But Is Anybody Coming? (subscription)

Tom Holland – SCMP

QV Premium: HKEx – SZSE Stock Connect & HKEx – SSE – Stock Connect Brief Part 4.

 

Outcome Of HK Listing Turf War Will Be City’s Most Important Change In Corporate Governance (subscription)

Peter Guy – SCMP

HK’s Listings Reform Is No Turf War – Just Common Sense (subscription)

Andrew Sheng (a former Chairman of the HK SFC (1998-2005) – SCMP

Speak a little truth and people lose their minds. No one expected a turf war when the SFC and HKEX jointly launched a three month consultation in June to collect views from the market on amending the listing procedure.

 

CBOE Futures Exchange Receives Registered Market Operator Approval in Singapore

CBOE

 

CFTC Head Dismisses Easing Rules To Benefit High-Speed Traders (subscription)

Joe Rennison & Barney Jopson – Financial Times

Massad says new entrants to swaps market will have to play by post-crisis standards.

 

IEX’s ‘Flash Boys’ Exchange Goes Live, Aims To Disrupt Market

John McCrank – Reuters

IEX began operations as a public stock exchange on Friday after more than 2-1/2 years as an off-exchange trading platform with a gradual rollout beginning with 2 stocks and an intention to add 8 more by Wednesday.

PLY: It is a delight to see IEX opening a whole new world of exchange opportunity. Again I wish Brad and the IEX team every success.

 

City of London Wants Swiss-Style Access To EU Market

Irish Times

Norway model seen as less attractive for UK finance sector which wants unique trade deal.

 

CFTC Sues FXCM Over Prior Capital Shortfall, Customer Guarantees

Jonathan Stempel & Gertrude Chavez-Dreyfuss – Reuters

FXCM Says Notified CFTC, NFA Of January 2015 Capital Shortfall

Reuters

CFTC filed a civil lawsuit against FXCM saying it was under-capitalized in January, 2015, and failed to report its capital shortfall in a timely manner.

 

Canadian Securities Regulators Seek Comment in Advance Of Move To T+2 Settlement

MondoVisione

PLY: “Dear Sirs, What’s keeping you back? Yours etc. Patrick L Young.”

 

Sebi Bars Exchanges From Sponsoring Media Programmes

Business Standard

Sebi has barred exchanges from sponsoring any programmes run by media channels, which directly or indirectly spread sensitive information.

The guideline comes at a time when many programmes are sponsored by the NSE, BSE, MCX, NCDEX in the name of investor awareness.

Private Markets

MSEI To Launch Rights Issue To Raise Rs 97 Cr (USD 14.4m) From Monday

Moneycontrol

Metropolitan Stock Exchange of India (MSEI) (earlier known as MCX-SX) will launch its rights issue to raise Rs 97 crore (USD 14.4m), from August 22.

PLY: The Met looks to be on shaky ground…

 

LBMA Expected To Announce RfP Decision In October

Ewa Manthey – Bullion Desk

LBMA is expected to announce the preferred single provider of its request for proposal (RfP) at its annual conference in Singapore in October this year.

In February LBMA said that 5 made the cut in the RFP, widely believed to be CME, LME, ICE, Autilla/Cinnober & Markit/ABS.

PLY: I am reminded of Henry Ford’s marvellous line: “If I had asked people what they wanted, they would have said faster horses.”

 

Grand Plans to Revive Chicago SE—From China (subscription)

Dave Michaels & William Mauldin – Wall Street Journal

A Chinese-led group of investors sees their takeover bid for the Chicago SE as a way to reinvent the struggling venue as a bridge between U.S. and Chinese markets, and a Western listings outpost for Chinese firms.

But first, they have to persuade Washington that it isn’t a Beijing plot to undermine American financial markets.

PLY: Interesting stat of the day. While Britain and the USA are respectively each other’s largest FDI investors at 20% or more of the total, China is barely 1% of US FDI.

 

Saudi To Let Foreign Institutions Buy Shares In IPOs

Reuters

 

Online U.S. Cattle Auctions Set To Resume As Gov’t Examines Markets

Tom Polansek – Reuters

The online auction, called the Fed Cattle Exchange, and the review by the U.S. Government Accountability Office (GAO) aim to address concerns that cash and futures prices do not accurately reflect the markets for cattle. The markets have come under scrutiny following a sharp setback in prices in the second half of last year from record levels reached in 2014.

PLY: Not clear to me if the market is failing or rather it is working but failing to deliver the prices farmers want…

 

Moscow Gets its First Bitcoin Exchange

Bitcoinist

 

Man Who Introduced Millions to Bitcoin Says Blockchain Is a Bust

Matthew Leising – Bloomberg

PLY: A healthy dose of pragmatism to counter the groupthink of the nirvana committees.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX 1005, up 0.55% since  our last regular daily issue on Friday, Aug 12 while  FTIL is 78.60, down 0.82% over the same period.

High Court Rulings Take Sting Out Of ED Probe Into NSEL Scam

Jayshree P. Upadhyay – Livemint

Accused in NSEL scam are no longer cooperating, as summons are no longer backed by the threat of arrest, thanks to a Punjab and Haryana high court ruling.

PLY: The blob undermines resolution…let alone any semblance of justice.

ED Summons India Infoline Director In NSEL Case

Dilip Kumar Jha – Business Standard

Chintan Modi would be present himself for the ED investigation on Monday.

Technology

Blockchain Prototype Gives ASX Confidence

James Thomson – AFR

ASX says its successful blockchain prototype has given it the confidence that it can develop a system that could eventually replace the trading platform that underpins the $2 trillion Australian market.

PLY: Gosh it all sounds so public sector. Can we expect the project delivered by the Victorian monopoly provider of Australian infrastructure  to cost triple the initial estimates with a side show of protests when the green lobby worries the DL could impact indigenous clearing boll weevils and then finally the whole thing takes three times longer than anticipated to complete?

 

FCA Considers Approving Blockchain Businesses (subscription)

Financial Times

Watchdog weighs approval for a small number of companies using process behind bitcoin.

PLY: Behind the facade of the regulatory sandbox, perhaps the progressive change mantra is not yet so ingrained in the FCA.

 

LSEG To Open Technology Hub In Colombo

The Nation

LSEG’s Business Services division in Sri Lanka says it would soon open its new headquarters at the historic Trace Expert City precinct in Colombo, formerly known as Tripoli Market.

PLY: New offices for Sri Lanka based Millennium IT.

Products

Sebi Liberalises Commodity Hedging Limits

Business Standard

Sebi has liberalised hedging limits for genuine players in the commodity derivatives market. Subject to available liquidity, the policy will now permit higher limits, to corporate participants, too.

PLY: Now this bit is rather more seismic…seems likely to deliver more concentration helping the biggest players. Lack of near month hedging provision is still frustrating.

Career Paths

NCDEX Cuts CEO’s 3-Year Extension To Just 1 Year

Ram Sahgal – Economic Times

Chairman Rabi Narayan Das confirmed NCDEX has cut short the extension in the tenure of its CEO Samir Shah to a year, barely two months after shareholders approved another 3 years for the CEO after he completes his term this week.

 

Battle for Coding Talent in Cornfields of Illinois Lures CME

Declan Harty – Bloomberg

The world’s largest exchange operator is going to college.

Financial Calendar

New! 28.09 – ASX AGM

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

Crowdfunding

Crowdcube Raises Largest Ever Funding Round On A UK Equity Crowdfunding Platform

Business Matters

More than 3,700 crowd investors, alongside prominent venture capital firm Balderton Capital, have collectively invested over £8 million in growth capital for Crowdcube, the UK’s leading equity crowdfunding platform.

Other stories

HKEX CEO Charles Li: Latest Charles Li Direct: Taking Mutual Market Access To The Next Level

MondoVisione

 

CFTC Charges Deutsche Bank AG With Multiple Swap Reporting Violations, Related Supervision Failures, & Violation Of A Prior CFTC Order

MondoVisione

 

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