December 01 2015

elb2New listing norms for Stock Exchanges – too prescriptive, as always with any SEBI intervention –  but at least it is progress. In the US BATS back on the IPO ramp while LME expands clearing services & EU proposes easing prospectus directive (admittedly not by enough but it’s progress) while BIST launches its NASDAQ trading system…and much more, including how US stock options may be closed to Europeans as the moronic hubris machine passing for a Transatlantic regulatory dialogue continues to value grandstanding over productivity.

Public Markets

FIS Closes SunGard Acquisition

Street Insider

What Fidelity National Has Planned For SunGard (Video)

Bloomberg

Fidelity Information Service (FIS) bought SunGard for $9.1 bn.

QV Premium: SunGard IPO Preps & Final Deal Brief.

 

PSE Gets More Time For PDS Takeover

Krista A. M. Montealegre – Business World

SEC has given the Philippine SE (PSE) two more weeks to complete regulatory requirements for its plan to consolidate the country’s equity and fixed-income exchanges, a PSE official confirmed. QV Premium: PSE – PDEx Merger Brief.

PLY: I am increasingly convinced the PSE-PDEx merger is being sold as a mini series story, hence this latest cliffhanger ought to enable the Manila office of HBO to complete a full series 2 offering…series 3 will presumably be the integration.

 

LME Clear Launches Two New Services

HedgeWeek

LME To Boost Revenue From Allowing Metal As Collateral

Eric Onstad – Reuters

LME Clear launched two new services – trade compression and the ability to post metals warrants as collateral. The launch of the new services was timed to coincide with an upgrade of LME Clear’s real-time clearing system, LMEmercury, which completed successfully on 23 November.

 

Can LME Crack The Steel Market?

Andy Home – Reuters

 

Shanghai Takes Command In Metals Markets (subscription)

Henry Sanderson – Financial Times

Investment funds in China have piled into trading on the Shanghai Futures Exchange this month, sending global prices for copper down to a six-year low and nickel to a 10-year low.

QV Premium: China Capital Markets Transformation Brief – Main File.

PLY: How many forward funding trades are left in Chinese metals…a point to ponder…

 

SEBI To Allow Stock Exchanges To List Own Shares

Reuters

Sebi Approves New Listing Norms For Stock Exchanges

Business Standard

The exchanges would need to take steps for maintaining of 51% of shareholding of Public Category and ensuring that holding of trading members, associates or agents does not exceed 49%. A mechanism would need to be put in place providing for approval of the listed stock exchange as & when the holding of trading members/associates/agents reaches 45%. Similar rules would apply for listing of depositories as well.

PLY: SEBI doesn’t do deregulation easily and thus listing rules are somewhat prescriptive but at least they are a lot more coherent than the previously bluntly anti-capitalist position of SEBi’s socialist executive. More work needs to be done refining these rules down but it is a step in the right direction.

 

EU Stock Market Rule Change To Boost Start-Up Floats

Jamie Nimmo – The Independent

European companies will now only have to issue a prospectus – the detailed legal document compiled for investors – if they are raising more than €500k ($530k), compared with €100k ($106k) before, under new rules to be introduced as part of the European Commission’s CMU plan. QV Premium: EU CMU Brief.

PLY: A good move but we need to see the threshold raised to at least a million Euros…. At least. The EU is, like SEBI, uncomfortable outside its socialist interventionist comfort zone but a successful CMU means a lot more hands off the process of bringing prosperity to the continent.

 

EU Members Of US Options CCP Face $30bn Capital Hit (subscription)

Fiona Maxwell – Risk

A new wrinkle in the transatlantic dispute over clearinghouse regulation could leave 18 European banks facing an estimated $30 billion jump in capital requirements, and limit access to equity options listed in the US. The unlucky 18 are members of the Options Clearing Corporation (OCC).

PLY: #Moronic. The CCP firmament is in danger of crumbling through the hubris of regulators on either side of the Atlantic. Action is urgently required to achieve a worthwhile mutual recognition process.

 

Citic Securities Would Face Takeover In `Worst Case’

Bloomberg

Citic Securities may be acquired by a rival in a regulator-driven transaction if its woes deepen beyond existing management “turmoil” and regulatory and legal probes, according to Daiwa Securities.

PLY: Not entirely convinced the Chinese market will shrug this off and feel comfortable if it does come to pass?

 

Why IPOs ‘Pop’ In NY But Not HK (subscription)

Jennifer Hughes – Financial Times

Flotation battle highlights the very different characteristics of the two markets.

PLY: Curious article examines the what but doesn’t really get to the other “W’s” I think deserve exploration. As noted at the Square IPO, I don’t really think mispricing stock by 45% on a fairly habitual basis demonstrates anything other than feckless ineptitude on the part of investment bankers (at best). Worth a read for the mechanics all the same but it strikes me HKEx has much to recommend itself here.

Private Markets

BATS Plans 2016 IPO (subscription)

Bradley Hope & Telis Demos – Wall Street Journal

BATS Gearing Up For Second Try At IPO (subscription)

Nicole Bullock, Eric Platt & Arash Massoudi – Financial Times

BATS is gearing up for another attempted flotation, nearly four years after technical glitches on its own bourse forced it to withdraw its IPO. A listing is likely to take place as soon as next year. It could value the company at more than $2bn including debt. Morgan Stanley and Citigroup, which led the failed 2012 listing are investors in BATS and working with the company again this time around. Other banks with stakes in BATS also are expected to participate. Credit Suisse, Goldman Sachs, Bank of America, JPMorgan and Deutsche Bank are investors.

PLY: As the banks unwind their stakes how will they continue to exercize control?

 

Pakistan – CCP Approves Integration Of Stock Exchanges; Addresses Competition Concerns

Pakistan Today

The Competition Commission of Pakistan (CCP) has issued the detailed Phase II Review order in the matter of integration of Islamabad, Lahore, and Karachi Stock Exchanges, approving the merger while imposing conditions to remedy certain competition concerns. QV Premium: Pakistan Exchanges Merger Brief.

 

Estonian High Court Asks Government To Clarify Bitcoin Stance

Stan Higgins – CoinDesk

PLY: Interesting insofar as Estonia are the EU’s paragons of e-government and technology which makes them natural bedfellows for Bitcoin advocacy in many respects.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX & FTIL slightly better on the day.

Technology

Single Session Era At BIST

BIST

BIST Started To Perform Equity Market Transactions On BISTECH Trading Platform

BIST

Borsa Istanbul (BIST) performed the first trade with NASDAQ technology. BIST will hold a single session from now on.

 

Xetra Release 16.0 Includes Innovative Matching Functions

DB1

Volume Discovery Order provides MiFID II-compliant execution of large volume orders.

 

LSE Latest To Increase Market Data Fees (subscription)

Luke Jeffs – FOW

LSE will increase data fees by average of 4.8% in Jan.

Products

ICE – Launch Of 81 New Energy Contracts

BUSINESS WIRE

ICE announced the introduction of 81 new energy futures and options contracts on December 14, 2015, subject to the satisfactory completion of applicable regulatory processes.

 

BME Clearing Launches A New Segment For Clearing IRSs

MondoVisione

 

HKEx Bolsters Product Portfolio For Future Growth

Asia Asset Management

HKEx is broadening its product portfolio with 34 new stock futures contracts and three more London Metal Mini Futures contracts that are part of a plan to prepare the Hong Kong market for future investment demands. In his latest blog, HKEx CEO Charles Li writes about why an expanded product portfolio is important to HKEx’s long-term strategy.

 

NZX Lifts Minimum Volume Threshold For Futures

BusinessDesk

NZX lifts minimum volume threshold for block trades of whole, skim milk futures, citing improved liquidity.

 

Regulators’ Boost For Securities Lending Has Risky Implications (subscription)

Patrick Jenkins – Financial Times

Banks use ultra-safe bonds as compliance shortcut.

 

ITG RFQ-hub Expands In Asia Pacific

Finextra

ITG RFQ-hub, ITG’s multi-asset system for OTC assets, is expanding in Asia Pacific in line with global growth across the platform.

 

ESMA Publishes Final Report On Guidelines On Complex Debt Instruments & Structured Deposits In MiFID II

MondoVisione

Indexes

Euronext Pursues Commitment To SRI With New Version Of Its Low Carbon 100 Europe Index

Euronext

 

CBOE To Launch Options On FTSE 100, FTSE China 50 Indexes

PRNewswire

Options on the two FTSE Russell indexes are expected to begin trading at CBOE on December 22, 2015.  

 

SGX Unveils New Thematic Equity Indices

SBR

SGX launched the SGX Thematic Indices, a suite of equity indices under SGX Index Edge, its index business.

 

JPX: Launch Of S&P/JPX GIVI

MondoVisione

Career Paths

Reuters reports that André Esteves, the controlling shareholder of investment bank Grupo BTG Pactual SA, who was arrested last week, quit as member of the board of BM&FBovespa.

PLY: A cataclysmic week in the history of BTG & Brazil’s capital markets, as Brazil’s most successful investment banker is exposed to legal action… There was an amusing aside in the weekend ‘pinko’ where they noted police confusion at trying to find his office only to discover Mr Esteves used a position on the dealing room floor amidst his team…

Finextra reports that ITG recently hired Jake Tantleff to the Hong Kong RFQ-hub sales team. He joins from Bloomberg.

SEC named Katherine K. Martin as Associate Director in its Office of International Affairs.

Reuters reports that Morgan Stanley plans to cut up to 25% of its fixed-income jobs. The workforce reduction will be across all regions and is set to take place in the next two weeks.

Financial software company corfinancial has bolstered its leadership with two key appointments to its salerio team. The company has appointed David Veal as Senior Executive: Strategy and Product Management. David held a number of senior leadership roles at specialist firms such as Simplex Consulting and Pentagon Consulting, where he was a founding director. The company has also promoted Paul Bowen to Senior Executive: Operations and Client Delivery.

Financial Calendar

This week

30.11 – 01.12 – CBOE Risk Management Conference (RMC) Asia

01.12 – Record date Interactive Brokers $0.10 quarterly dividend

01.12 – Record date Virtu Financial $0.24 quarterly dividend

04.12 – Record date CBOE $0.23 dividend

04.12 – TMX $0.40 dividend payment

04.12 – BGC Partners $0.14 quarterly dividend payment

New announcement

07.12 – BIST Extraordinary General Assembly Meeting

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

Other stories

China’s Renminbi Is Approved by I.M.F. As A Main World Currency

Keith Bradsher – NY Times

A Timeline: The Chinese Yuan’s Journey to Global Reserve Status

Bloomberg

The Chinese renminbi was anointed as one of the world’s elite currencies on Monday, a milestone decision by the International Monetary Fund (IMF) that underscores the country’s rising financial and economic heft.

The move will help pave the way for broader use of the renminbi in trade and finance, securing China’s standing as a global economic power. Just four other currencies — the dollar, the euro, the pound and the yen — have the IMF designation. QV Premium: China Capital Markets Transformation Brief – Main File.

PLY: Long awaited but semi-seismic nonetheless…

Michael Bloomberg To Chair Group To Establish Yuan Clearing In U.S.

Sam Forgione – Reuters

 

Jailed Libor Trader Tom Hayes Appeals 14-year Sentence, Conviction

Kirstin Ridley – Reuters

 

Greek Banks Hit By Bitcoin Ransom Demand (subscription)

Financial Times

Hackers ask for €7m ($7.4m) in digital currency to stop website attacks.

 

Commissioner Aguilar’s (Hopefully) Helpful Tips For New SEC Commissioners

MondoVisione

 

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