December 07 2015

elb2The biggest story is perhaps the most bland – but the BIS always does things thus. Essentially they just sort of hung around the door frames of the great political offices and said, “this blanket CCP thing, er, are you really sure?” However it’s as pertinent a question to ask as ever and, alas, the depth of thinking on the whole topic is poor. QV The Premium section here and moreover don’t forget on the broader clearing & settlement tableau my free Zero Hour white paper.

Public Markets

Brazil’s Cetip Rejects Unsolicited Bid From BM&FBovespa (subscription)

Rogerio Jelmayer – Wall Street Journal

Cetip rejected an unsolicited offer of 39 reais ($10.4) (BRL 10.2 billion/$2.7 billion) made by BM&FBovespa, saying it undervalues the company. BM&FBovespa hasn’t said if it plans to present a new offer.

QV EI Premium: BMF&Bovespa Monopoly – Brief and Exchange Deals Brief.

PLY: How many unsolicited bids ever get accepted straight off? An active process of valuing CETIP is now in play – and clearly CETIP needs to consider its options including overseas buyers (after all other exchange groups already have toe holds in Brazil such as ICE – remember CME is already a significant holder of BM&FBovespa which might complicate it making an outright bid…


EU Scraps Derivatives Case vs 13 Banks, Continues Markit, ISDA Probe

Foo Yun Chee – Reuters

European Commission Drops Probe Into Banks On Derivatives (subscription)

Tom Fairless – Wall Street Journal

European antitrust authorities have dropped a high-profile investigation into 13 of the world’s largest investment banks over alleged collusion in the lucrative credit-derivatives market.

PLY: Unsurprising in many respects that no evidence of collusion could be found insofar as, the collusion is surely just intuitive. Aka banks didn’t have any incentive to broaden the market as it would mean their profit per trade being threatened, so why bother upsetting the cosy cartel?


Banks Said To Face SEC Probe Into Possible Credit Swap Collusion

Matt Robinson – Bloomberg

SEC is probing whether firms acted in unison to distort prices in the $6 trillion market for CDS indexes.


China Unveils Stock Market Risk Controls, IPO Reforms Expected Soon


China To Cut Trading Hours For Stock-Index Futures In 2016


China To Launch Stock-Market ‘Circuit Breaker’ Next Year (subscription)

Wall Street Journal

A 5% move up or down in the CSI 300 Index, a gauge of 300 stocks listed in Shanghai & Shenzhen, will trigger a 15-minute trading halt. A movement of at least 7% will freeze trading for the rest of the day.

The circuit breaker will kick in for trading that takes place up to 15 minutes before the markets close at 3 p.m. local time.

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


DB1 Looking For Mifid Opportunities Despite Delay (subscription)

Anna Irrera – Financial News

DB1 is pushing ahead with preparations to exploit the revised Mifid, even though it could been delayed by a year.


The Future Is In The Futures Markets: An Interview With Richard Sandor

Ann C. Logue – RStreet

Richard Sandor has a relatively painless solution to climate change. It relies on the financial markets, not onerous regulation. It even has a track record. He talked to us recently as part of his campaign to change the world through financial markets.

PLY: Richard Sandor on top form: “You can affect the supply-and-demand balance of almost anything. We forget how powerful a tool the market is.” Certainly the onerous blob suggestions for a centrally planned carbon framework being bandied around at Le Bourget are an economic suicide ticket compared to a financial framework which can be tweaked and even removed if it is no longer required.


Speed Traders Wanted: Russia Brokerage Courts Fastest U.S. Firms

Anna Baraulina – Bloomberg

BCS Financial agreed in October to purchase a NY-based unit of AO Alfa Bank. Should that happen, BCS aims to use the acquired business to give American automated trading firms and other clients increased access to MOEX.

Private Markets

TASE Chairman Sees Trading Day Switch In Early 2017

Gabrielle Coppola – Bloomberg

Tel Aviv SE (TASE) plans to change its Sunday to Thursday trading schedule to align with markets abroad in Q1 2017, Chairman Amnon Neubach said.


Second Bitcoin IPO Delayed For Fifth Time

Shaun Drummond – SMH

Bitcoin Group, the second bitcoin company to attempt a listing on the ASX, has been forced to release a third supplementary prospectus and delay its float for a fifth time, until mid-January.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX off 1%, FTIL flat.


Symphony Out Of Tune With Regulators (subscription)

James Rundle – Financial News

During the investigations into rate-rigging and currency-market manipulation by major banks in recent years, chat logs and instant messages provided a substantial amount of evidence that wrongdoing had taken place on trading floors. The banks and brokers in question were fined more than $9 billion as a result and criminal prosecutions continue.


BIS Paper Says Broader Approach Needed To Supervise Clearers

Huw Jones – Reuters

The consequences of forcing more derivative trades through clearing houses are not fully understood and regulators should take more of a system-wide approach to assessing risks, a Bank for International Settlements (BIS) paper said on Sunday.

PLY: I would suggest they start with my essential reading on the subject in Premium, such as the supermodel syndrome.


Basel To Propose New Leverage Ratio Accounting For Cleared Derivatives (subscription)

Archie Van Riemsdijk – Wall Street Journal

International banking regulators will propose a new method for calculating the leverage ratios of banks, as requested by market participants, in a move that could provide relief for the global clearing industry.


CME To Revamp Cattle Delivery Rules Before Meat Labeling Vote


CME plans changes to its rules for live cattle futures, requiring that all cattle delivered against the contract must be born and raised solely in the US.

The new requirement, effective Dec. 18, covers all currently listed trading months through April 2017.


Euroclear Pressing Ahead On Inclusion Of India Govt Bonds (subscription)

James Crabtree – Financial Times

Euroclear is pressing ahead with plans to include Indian government bonds on its platform by the end of 2016, potentially opening the South Asian country’s debt markets to a new wave of foreign investment.


Sebi Plans Commodity Derivatives Panel

Ashish Rukhaiyar – The Hindu

SEBI will soon form an advisory committee for the commodity derivatives segment, which has come under its regulatory purview since September 28.


India – BSE ‘Straddle & Paired Options’ Contracts From Today

The Hindu

BSE will offer from Monday ‘straddle and paired options’ in its currency derivatives segment.


Vanishing Gold Trade Prompts Singapore To Refine Contract

Ranjeetha Pakiam – Bloomberg

Just over a year ago, SGX. started gold trading to help bolster the country’s role as a bullion hub in Asia, the world’s largest consuming region. Transactions slumped to zero in November and the bourse is now trying to revitalize the market.

Career Paths

Digital Look reports that LSEG appointed David Nish, former CEO of Standard Life, and Lex Hoogduin, the current chairman of LCH.Clearnet, as NEDs.

Nish, who will become an independent NED of LSEG, also sits on the board of the Green Investment Bank and is due to join Vodafone’s board in January. He was group finance director of Scottish Power from 1999 to 2005 and a former partner at Price Waterhouse.

Hoogduin served as executive director at De Nederlandsche Bank (DNB) from January 2009 until July 2011.

Reuters reports that Rob Leach, former head of EMEA capital markets at BlackRock, is to lead European ECM at Jefferies as the U.S. firm shakes up its investment banking teams.

The Six CITIC Executives ‘Missing’ Amid China’s Crackdown On Financial Sector (subscription)

Summer Zhen – SCMP

CITIC Securities said on Sunday that it could not contact its two top investment bankers Chen Jun and Yan Jian lin. Chen is head of the company’s investment banking sector and Yan is head of head of global investment banking.

Michael Spencer: Icap Founder, Tory Grandee & Party Animal Looks Forward To Life After Tullett Prebon Merger

Chris Blackhurst – Evening Standard

Bloomberg reports that Exotix Partners, the brokerage for frontier-market debt controlled by ICAP  head Michael Spencer, hired Mark Preston as CEO as the firm expands into new markets. Preston was previously CEO of City Index, a brokerage that Spencer also controlled until Gain Capital bought it for about $148 million earlier this year.

Sri Lankan Securities Regulator Arrested For Misappropriation


Dhammika Perera, the deputy director of the Sri Lankan SEC, is now under compulsory leave.

He was arrested by the Financial Crime Investigation Department, police spokesman Ruwan Gunasekera said, after a seven-month investigation of a suspected 5 million-rupee ($34,940) misappropriation that occurred in 2013.

ESMA Seeks Retail Representatives For Its Corporate Finance Consultative Group


Financial Calendar

07.12. – BIST Extraordinary General Assembly Meeting

10.12. – Record date CME $0.50 Q4 2015 dividend

11.12. – ITG $0.07 quarterly dividend payment

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

Other stories

A Complex Overreaction….Can You Say Dodd-Frank?

Stephen Simonis Senior – Finance Magnates

Stephen Simonis Senior argues that Dodd-Frank is an over-complicated overreaction that has done more harm than good.


ISDA & China Futures Association Sign MoU To Facilitate Cooperation In China



European Supervisory Authorities: Joint Comittee Discussion Paper On Automation In Financial Advice


The Joint Committee of the three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – has launched a Discussion Paper on automation in financial advice, aimed at assessing what, if any, action is required to harness the potential benefits of this innovation and mitigate its risks.


Hong Kong’s SFC Issues Q2 Report


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