August 24 2015

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 The swap shuffle is on, as banks park trades in more convenient locales. Fund managers feel empowered to criticise the bank-centric bond trading firmament. SET’s new CSD software up and running, Bay Street brickbats over latency chicanery, exchange boss suffers citizens arrest and much more, happy reading:

Public Markets

U.S. Banks Moved Billions In Trades Beyond CFTC’s Reach
Charles Levinson – Reuters

…The trades hadn’t really disappeared. Instead, the major banks had tweaked a few key words in swaps contracts and shifted some other trades to affiliates in London, where regulations are far more lenient. Those affiliates remain largely outside the jurisdiction of U.S. regulators, thanks to a loophole in swaps rules that banks successfully won from CFTC in 2013.

LCH.Clearnet: Portfolio Margining White Paper
MondoVisione

Purpose: to describe a portfolio margining standard that gives precise meaning to the type and level of reliability required in the risk modelling of interdependent assets…

Heated Exchange: The Mini-Feud Between TMX & Aequitas (subscription)
The Globe and Mail

PLY: Canada is such a civilised place, their definition of a mini-feud would barely match a London IDB desk dispute over a misallocated lunchtime sandwich. Aequitas/TMX are getting tied up in knots over cable chicanery used to deliver speed bumps. As I recall IEX, led by Canadians remember, began with a patented process (2012, implemented in 2013). Bay Street’s local market operators have clearly taken somewhat longer than 350 microseconds to get themselves worked up in the aftermath of that seminal event…

Sands To Shift On JSE’s Monopoly
Lynley Donnelly – Mail&Guardian

The country’s central securities depository, Strate – of which the JSE owns almost 45% – is also set to face its first competitor.

PLY: Game on in South Africa as Aquis powers A2X and it looks as if a slew of new markets and even a CSD may enter the ZA market…

Private Markets

Brad Katsuyama’s Next Chapter
Jeremy Kahn – Bloomberg

Post Flash Boys, this unlikely celebrity is out to prove IEX Group has what it takes to become a public stock exchange.

Angry Investors Capture Head Of China Metals Exchange (subscription)
Lucy Hornby – Financial Times

Investors have been protesting for weeks after the Fanya Metals Exchange, based in the southwestern city of Junming in July ceased making payments on financial investment products. The CEO was captured as he checked out of a Shanghai hotel and handed over to police.

PLY: As Chinese markets erase gains for the past year, will we see a scenario emerge where the government closes exchanges as happened in the futures industry between late 1993 and early 1994?

Sebi To Make Share Trading Cheaper & Simpler
Reena Zachariah – The Economic Times

A SEBI board meeting Monday will discuss, the feasibility of a single clearing corporation for share trades in India or to allow interoperability between clearing corporations. It will also mull a proposal to grant exemption from making an open offer under the takeover code in case of forfeiture of partly-paid shares.

PLY: Any moves which reduce complexity and cost are always welcome.

Sebi To Discuss Commodity Market Norms
The Economic Times

One-Year Wait For Bourses To Launch Commodity Segment
Ashish Rukhaiyar – Livemint

Stock exchanges will have to wait for at least a year more after the merger of FMC with Sebi to launch commodity segment on their existing platforms.

Read our Premium SEBI-FMC Merger Brief.

We Ensure BSE Not Used For Tax Evasion: MD & CEO Ashishkumar Chauhan
Anto T Joseph – dna

Ashishkumar Chauhan is truly a turnaround man. The affable MD & CEO of BSE Ltd (formerly Bombay SE) has done the unthinkable. He transformed a rigid organisation, extremely rudimentary in its approach. When he joined the exchange five-and-a-half years ago, BSE was in decline, hopelessly poised to lose the high-stakes game to rival National SE (NSE) in almost all segments of the market.

But Chauhan scripted a quick turnaround, and is now looking to grab every opportunity to take Asia’s oldest bourse to the next level.

China’s Neighbours Move To Prop Up Stock Markets
Alexandra Ho – Livemint

Taiwan banned short-selling of borrowed stocks at prices below the previous close; S. Korea to act ‘pre-emptively’ as largest ETF sees biggest weekly withdrawal.

Nigeria – SEC Sets October 2 To Deregister Undercapitalised Market Operators
Business Day

SEC will on October 2, this year, deregister capital market operators (CMO) who fail to comply with the new minimum capital requirement. Currently at the SEC, there are 188 capital market operators with incomplete registration and 294 capital market operators with valid status.

Bitcoin In China: An Insider’s View
Leon Li – CoinDesk

UBS’ Alex Batlin On The Future Of Blockchain Tech In Finance
Grace Caffyn – CoinDesk

PLY: More puff than substance – is it the altitude of Level 39 which makes everybody come over lightheaded and bereft of fungible insight in the media?

Special Section: FTI, NSEL, India at the Crossroads

PLY: Pretty big down day in India drags MCX down 9% and that ‘we couldn’t make it up if we tried” FTIL rebranding: 63 Moons Technologies which is also being dragged out of orbit, down 7%.

Technology

SET Launches New Clearing & Depository System
Finextra

Stock Exchange of Thailand (SET) new clearing and depository systems, started operation today.

PLY: System developed in partnership with Korea Exchange which has been working with SET for the past couple of years.

Products

Top Bond Investor Slams Trading Infrastructure (subscription)
Financial News

Jim Cielinski, head of bonds at £320 billion manager Columbia Threadneedle, has warned that the European OTC market, “is not fit for purpose”.

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

PLY: Couldn’t agree more with the sentiment. In many respects that is not the story, the real ‘news’ is that fund managers, seeing the market sands shifting, are now feeling empowered to criticise the tawdry interbank status quo which has been steadily dysfunctioning for some years now to nobody’s advantage except the rather rapacious bankers…

Career Paths

HK Securities and Futures Commission (SFC) welcomes the re-appointment by the Financial Secretary of Mr Brian Ho and Mr Keith Lui as Executive Directors for another 3 year term effective from 28 August 2015.

Dubai Financial Services Authority (DFSA) appointed Ms Muna Dandan as General Counsel.

Financial Calendar

28.08 – Record date LSEG interim dividend of 10.8 pence

28.08 – Record date for HKEx Interim dividend

Young Markets Future of finance symposium: Warsaw 17th September, email us for registration details.

New announcement – WFE General Assembly and Annual Meeting at the Kempinski Marsa Malaz hotel in Doha, Qatar, on October 19-21.

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

Crowdfunding

Standard Chartered Enters China’s P2P Scene
Ryan Kennedy – PaymentWeek

Standard Chartered has invested $207 million in Chinese P2P lender Dianrong.com.

Former Lending Club employee Soul Htite and financial lawyer Guo Yuhang founded Dianrong 3 years ago.

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