The ICE will close the IDC acquisition circa next Monday – clearing the decks for some serious M&A in 2016? NASDAQ buys Chi-X Canada, Estonia wavers on FTT as the suicidal 10 impose a daftly regressive action which undermines every vestige of CMU as much as removing another reason for the EU to be viewed as a credible agent of economic growth. BIST completes EBRD share deal as Aequitas hits TMX with a competition lawsuit. Is Satoshi Nakamoto an Ozzie? Lots happening, let’s get to the pith:
Nicole Bullock – Financial Times
Nasdaq will acquire Chi-X Canada, an ATS for Toronto SE & TSX Venture Securities, from Chi-X Global. The deal is expected to close in Q1 2016, and be accretive to the company’s earnings at closing, excluding transaction-related costs. Chi-X handles about 22% of the order flow of S&P/TSX Composite securities in Canada.
PLY: Price undisclosed but rumoured to be around $100 million (US) as NASDAQ pushes into Canada. Of course NASDAQ’s recent hires include former TMX CEO Tom Kloet (now a NASDAQ director) and former TMX IT boss, Brenda Hoffman…
…on or around December 14, 2015.
PLY: Again for those who missed The ICE 101 lessons… Ruthless execution focus is one key factor, as evidenced here with the IDC deal closing in an impressive time frame. An end of year closure was expected when the deal was announced October 26th, to close before mid-December is impressive.
PLY: EBRD now holds 10% of BIST, NASDAQ have 5% through their technology delivery. So far no other signs of any investors from the process run a year ago by BIST, seeking cornerstone shareholders ahead of an IPO.
Ben Dummett Jacquie McNish – Wall Street Journal
Alexandra Posadzki – The Canadian Press
Aequitas (press release) alleges that TMX is using its dominant market position to “maintain control over the pricing of market data in the Canadian capital markets.” As a result, Canadian investors only get a partial view of what is going on in the markets, Aequitas alleges.
PLY: TMX now looks increasingly like a passenger in its own domestic market as Jos Schmitt dominates the headlines and seems to be setting the agenda. Not sure if the NASDAQ acquisition of Chi-X changes that balance but right now, TMX management appear inert.
Jan Strupczewski – Reuters
Ten euro zone countries agreed on Tuesday on some aspects of a harmonized tax on financial transactions and gave themselves until the middle of next year to reach agreement on remaining issues, including tax rates. Talks on imposing one have been dragging on since 2011 between Germany, France, Italy, Austria, Belgium, Estonia, Greece, Portugal, Slovakia, Slovenia & Spain.
All share transactions, including intraday trading, would be taxed. The tax would be paid by traders in one of the countries participating in the scheme on shares issued in those countries. France is insisting on a narrow market making exemption which may be included.
The ministers said they would analyze whether it would be better to tax all shares, regardless of where they were issued.
Estonia did not sign the agreement, worried that because most of the shares traded by its financial institutions are issued outside the participating group, it would hardly get any revenue. At the same time, its traders would have an incentive to move their business elsewhere.
The ministers also agreed that derivatives transactions should be taxed “on the principle of the widest possible base and low rates and it should not impact the cost of sovereign borrowing”.
They said option-type derivatives should be taxed on the option premium. For other types of derivatives, the taxable base could be a term-adjusted or non-term-adjusted notional amount, depending on whether the instrument has a maturity date.
They also agreed to further analyze the impact of the tax on the real economy and pension schemes as well as the financial viability of the tax for each country.
PLY: Scary stuff as Europe’s suicidal agents of regression take a step towards financial oblivion. They are clearly able to tax their own citizens – domestic suicide is between them and their impoverished electorates – but any extraterritorial taxes on overseas listings which impacts foreign trading is an attack on free trade. QV Premium: EU FTT Brief Part 2.
Dan McCrum – FT Alphaville
A belated welcome back to Plus500, the UK-listed but Israel based contract for difference provider which currently deal with clients through Cyprus. It had planned to disappear into the the UK-listed but Isle of Man based Playtech, but that deal died last month.
PLY: Brilliant commentary. I can only hope NIKKEI is busy cloning the excellent Mr McCrum’s DNA to insert a legion of correspondents into the future FT. Good spots include: “Revenues were actually higher than the same period in 2014, which is good going considering the company was forced to freeze all UK accounts pending proper implementation of anti-money launder procedures and other regulatory niggles.
What surprises, however, was a big jump in the total for trade receivables not explained in the notes to the accounts.”
…Apparently it all relates to sponsoring a football team. Nope, I could not make this up.
John Detrixhe – Bloomberg
France’s regulator fined Euronext NV (reported yesterday) and HFT firm Virtu Financial Inc. 5 million euros ($5.4 million) each for market manipulation in 2009.
Nate Raymond – Reuters
Lance Uggla, Markit CEO, filed a lawsuit on Tuesday, accusing unknown individuals of hacking into his computers, phone and emails to try to intimidate him and extort money.
Americas Trading System Brasil CEO Alan Gandelman discusses opening a stock exchange in Brazil
A well developed commodity market is key to the globalization of the Chinese renminbi, and HKEx will announce in January a three-year plan to turn itself into a pricing hub for commodities and currencies.
Rajendra Jadhav – Reuters
The Mumbai-based India Bullion and Jewellers Association (IBJA), a group consisting of gold dealers, traders and jewellers, is talking with industry officials about launching the exchange next year.
Anna Kitanaka, Anuchit Nguyen & Nao Sano – Bloomberg
Starting a stock market is hard. Just ask Ryota Sugishita. Two decades after his firm first laid the groundwork for an exchange in Myanmar, Sugishita found himself in a Yangon hotel ballroom in 2013, facing down skeptics in an audience of bankers, corporate executives and politicians.
QV Premium: ASEAN Exchanges Project Brief.
PLY: Fascinating step forward.
Adam Voorhes, Gail Anderson & Joe Newton – WIRED
In the last weeks, WIRED has obtained the strongest evidence yet of Satoshi Nakamoto’s true identity. The signs point to Craig Steven Wright, a man who never even made it onto any Nakamoto hunters’ public list of candidates, yet fits the cryptocurrency creator’s profile in nearly every detail. And despite a massive trove of evidence, we still can’t say with absolute certainty that the mystery is solved. But two possibilities outweigh all others: Either Wright invented bitcoin, or he’s a brilliant hoaxer who very badly wants us to believe he did.
Edward Johnson & Angus Whitley – Bloomberg
Craig Steven Wright’s house in the suburb of Gordon was raided by officers assisting an investigation by the Australian Taxation Office. The raid was unrelated to media reports about Wright’s possible involvement in Bitcoin. The tax office declined to comment for reasons of confidentiality.
PLY: All fascinating stuff…
Special Section: FTI, NSEL, India at the Crossroads
PLY: MCX down 1.5%, FTIL up 2%.
Euronext has selected Orange Business Services to support transformation of its unified communications services.
trueEX teams up with J.P. Morgan and RBS to launch trueFIX, which delivers direct ‘no-touch’ execution and processing for the buy-side for USD, EUR and STG swaps, enabling institutional investors to trade directly from an OMS.
Maria Nikolova – LeapRate
CBOE launched the first international extension of the world-renowned CBOE Options Institute at SGX.
Pratima Desai – Reuters
Morgan Stanley will close its base metals trading desks globally as part of a plan to cut up to 25% of jobs in its fixed income and commodities division.
Following the acquisition of Chi-X Canada by Nasdaq, it is expected that Dan Kessous, Chi-X Canada CEO, will continue to lead the Canadian equities trading business and the Chi-X Canada team will join Nasdaq.
The Standard reports that HKEx shut its Research and Corporate Development Department. The move included the sacking of Matthew Harrison, who headed the department. Harrison had worked for HKEx since 1993. Some of the others fired had also worked at the local exchange operator for more than 20 years.
General Atlantic announced the promotions of Jörn Nikolay to MD and Roni Elchahal, Andrew Ferrer, and Rajat Sood to principal. Mr. Nikolay leads the firm’s Munich office. Mr. Elchahal is responsible for the firm’s EMEA capital partnering effort based in London, and Mr. Ferrer and Mr. Sood are senior investment professionals in the firm’s New York and Mumbai offices, respectively. The promotions will be effective as of January 1, 2016.
ESMA is looking for a Policy Officer – Investment Management (REF.: ESMA/2015/VAC32/AD5).
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.
RBC Capital Started Coverage On CME – “Underperform” Rating, $83.00 Price Target
NASDAQ Price Objective Lifted By Barclays From $64.00 To $67.00
CBOE Downgraded By Barclays From “Equal Weight” To “Underweight” – $59.00 Price Objective, Down From $61.00.
A full table of current analysis can be found on our Analyst Ratings page which is updated daily.
David Michaels & Cheyenne Hopkins – Bloomberg