February 02 2015

elb2

It’s time to wheel out those Berlin bunker videos and wonder if it’s a GFI board meeting. Mickey Gooch is not about to become impoverished but he is up against the wall. Meanwhile, some rather astounding comments from Bob Greifeld which raises that thorny old question – do cash market folks ever manage to evolve into being derivatives literate? That’s just the two leading stories, an interesting day, happy scrolling:

Meanwhile if you fancy something other than pure reading, try some recent videos (in association with Cinnober):

The most fascinating era for capital markets which we are lucky to be witnessing:

The future of money – where is cryptocurrency heading?

What will the launch of real-time clearing at BM&FBOVESPA mean for the industry?

Meanwhile, over in Premium Posts, there are several new Premium Briefs to remind you of various issues in the industry (and don’t forget others such as the BGC-CME-GFI deal file) are updated daily when news arises. Recent briefs include:

Virtu Financial IPO Brief
Index Companies Deals Brief
Barclays Index Unit Sale Brief
NY AG – Barclays Dark Pool Brief
FX – CHF Crisis – Brief

Our Premium service is now on a real roll – can you afford not to be a subscriber? $120 per user/year and it helps keep EI Free. Subscribe here or email and I will invoice you forthwith.

Public Markets

GFI Group Shareholders Reject Proposed CME Takeover
Tom Polansek – Reuters
CME & GFI Group Terminate Merger Agreement
PRNewswire
GFI Shareholders Strongly Reject The Proposed CME-GFI Management Merger Proposal – A Rejection By GFI Shareholders Would Mean That BGC’s Tender Offer Is The Only Remaining Takeover Offer – BGC Urges GFI Shareholders To Tender Their Shares Into BGC’s $6.10 Per Share Offer
MondoVisione

PLY: Given that GFI began with 34% of the vote, they needed (even excluding the BGC stake) to capture 16% out of more than 50% of the shareholder base, that is a bloody nose for the board and management stakeholders.

Is a deal with BGC and CME now plausible? It seems BGC would need cash to swallow GFI whole (or to sell assets off).

Read our daily updated brief BGC – CME – GFI Brief.

Nasdaq In Talks With Potential NLX Partners (subscription)
Tim Cave – Financial News

Nasdaq CEO Bob Greifeld has said the long-term success of the group’s London derivatives platform NLX “requires a new set of committed partners”, reigniting speculation over a sale of at least part of the business.

PLY: First up read our Premium brief: NLX Brief. Then take a deep breath and wonder. “Wonder” is the most polite word I can use here for what seems an odd concept – selling a discredited MTF which bears significant liability…as I note in EI Premium

“I sincerely see a major series of problems with the idea of purchasing a stake (or all of) in an MTF with a dubious history. Here is just a random list for starters: NLX Seeking Partners.

Lawmakers Say UK Losing Clout In Shaping EU Financial Rules
Huw Jones – Reuters
EU Financial Regulatory Framework: An Impressive Achievement, But Weaknesses Remain
MondoVisione

PLY: To place news in perspective, the politicians in all 28 nations fret endlessly about nation’s losing clout – this is precisely the point of the EU… Previous mentions and discussions on the CMU topic here, here and here.

European Regulators Clash Over Emir Reforms (subscription)
James Rundle – Financial News

European regulators have clashed over how to enforce mandated clearing of IRS under new reforms, raising the prospect of further delays in the process.

NYSE Planning Midday Auction For Its Stock Market (subscription)
Bradley Hope – Wall Street Journal

NYSE plans to ask regulators for permission to introduce a midday auction in addition to the opening and closing auctions already operative at NYSE and NASDAQ.

SGX CEO Bocker Boosts China Focus As Global Links Expand
Jonathan Burgos – Bloomberg

SGX will hire more people in China as it seeks to sell more of its products in Asia’s largest equities market.

PLY: Let’s face it, if SGX gets even relative crumbs from the Chinese capital markets’ table, the exchange has a history of growing those into healthy loaves of profit.

CME & LCH.Clearnet Prep Buy-Side Repo Clearing (subscription)
Kris Devasabai – Risk

CME & LCH.Clearnet are developing repo clearing services for the buy side, setting up a scrap with DTCC and Eurex Clearing, which have already announced similar projects. LCH.Clearnet currently clears circa €13 trillion on an average month in RepoClear..

New Shades On Way For EU Dark Pool Trading (subscription)
Tim Cave – Financial News

New BVB Solution To Improve The Market Quality And Liquidity – The Program Designated To The Shares Coping With Lower Liquidity
MondoVisione

PLY: BvB also joins the auction bandwagon…

Private Markets

BIST Said In Stake Sale Talks With Silver Lake, Warburg
Gulf Times

PLY: Repeating story from FT discussed last week. Incidentally rumoured value is now circa $1bn which may be below the level at which NASDAQ swapped its technology for a 5% stake.

Read our Premium brief: BIST IPO Brief

IFCI To Sell 2.5% Stake In NSE In Next 15 Days
The Economic Times

State-owned IFCI is likely to sell a 2.5% stake in NSE in the next 15 days which may fetch the financial institution about Rs 500 crore.

Previous discussions on the topic here, here and here.
IDBI Bank also plans to sell a stake in NSE, as mentioned here last month.

Delhi-based finance company IFCI, holds 5.55%. IDBI Bank owns 4.99% stake in NSE.

BSE Slashes Fees In FX Derivatives Battle With NSE
Rafael Nam & Abhishek Vishnoi – Reuters

BSE is slashing fees to gain ground in new markets, turning currency derivatives into the latest battleground in its long-standing rivalry with the younger but larger NSE.

Shenzhen SE Chief Says Design Of Shenzhen-Hong Kong Link Complete
Reuters

The head of the Shenzhen SE said the design of the Shenzhen-Hong Kong stock connector scheme has been completed and will match the design of the currently running Shanghai-Hong Kong stock connector scheme.

HKEx expects a Shenzhen ‘through train’ (previously discussed here, here, here, here and here) to launch in H2 this year.

Near Real-Time Stock Connect Turnover Info Is Now Available On HKEx’s Homepage
MondoVisione

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL and MCX both flat.

Technology

EEX Migrates Market For Emission Allowances To A New Trading System
Commodities Now

European Energy Exchange (EEX) will migrate trading on the Spot Market for CO2 Emission Allowances (EUA, CER, EUAA) to the T7 trading system, meaning all Spot and Derivatives Market products will be tradable on a single system.

EBS To Unveil A Cutting-Edge, Next Generation Integrated Trading Platform
ICAP

EBS, ICAP’s market-leading electronic FX business, announced that it will be unveiling a cutting-edge, integrated trading platform.

ADX Suspends Trading On 3 Companies Due To A Technical Issue
MondoVisione

Abu Dhabi Securities Exchange (ADX) announced that on the 1st of February 2015 it has suspended trading on the shares of 3 listed companies due to a technical issue in the shares ownership limits calculation. This move from ADX comes to protect the best interest of investors.

Products

DGCX Focuses On Emerging Markets Currencies, Equity (subscription)
Alice Attwood – FOW

DGCX plans to expand its currency and equity franchises, and move for the first time into softs after its next product launch, a spot gold contract.

NCDEX Plans To Introduce India Gold Futures Contract
Rajesh Bhayani – Business Standard

NCDEX is planning a contract in the gold futures segment that includes delivery of gold refined by Indian companies. The contract has already received regulatory approval. Previously NCDEX attempted an international gold contract without success.

ETF Giants Bet On Futures For Flows (subscription)
Paul Amery – Financial Times

The global exchange-listed futures market totals $30tn in exposures, while derivatives traded off-exchange have a total notional value of nearly $700tn, according to the Bank for International Settlements.

Meanwhile, assets in global ex­change traded products hit a record of $2.8tn at the end of 2014, according to consultancy ETFGI, having won more than $330bn in assets over the year — far smaller than the market for derivatives but typically fully funded at the outset, unlike highly leveraged derivatives contracts.

Career Paths

Euronext announced the appointment of Maurice van Tilburg as CEO of Euronext Amsterdam with immediate effect, pending regulatory approvals (Press release here).

Top Executive Attacked For Ukraine Links Quits MOEX
Howard Amos – Moscow Times

A senior executive of Ukrainian origin at MOEX resigned Friday after being accused of currency speculation and extremism by a senior nationalist lawmaker.

Roman Sulzhik, head of the futures and options market at MOEX, did not hide his sympathy for Ukrainian protesters in Kiev last year, and found himself the subject of critical articles in pro-Kremlin media outlets.

“My personal opinions and colorful character have led to completely absurd and unfounded accusations in the gutter press and have affected MOEX,” Sulzhik wrote on his Facebook page Friday.

Financial Calendar

This week

Dubai Financial Market PJSC – BoD Meeting
TMX Q4 Financial Results
ICE Q4 2014 Financial Results
CME Q4 2014 Financial Results
CBOE Q4 2014 Financial Results
ICAP 6.6p interim dividend payment

New announcements

SEC announced that its Advisory Committee on Small and Emerging Companies will hold a public meeting by conference telephone call on February 17.

Qatar SE will host the 55th General Assembly and Annual Meeting of the World Federation of Exchanges (WFE) during the period from 19th-21st October 2015.

PLY: Good to see Qatar hosting the WFE AGM this year. It’s an interesting time for associations. WFE is making progress, FESE is preparing for a new permanent boss after a successful interregnum under Rainer Riess while even the SFOA, is seeking to move forward once again. Having been resuscitated under Otto Naegeli, new Chairman Dan Day-Robinson is assiduously endeavouring to reach out to the marketplace and rebuild the Swiss Association.

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

Share Notes

Charles Schwab major shareholder Charles R. Schwab sold 277,609 shares Wednesday, January 28th at an average price of $27.23 (bargain $7,559,293.07). He now owns 675,480 shares. Mr. Schwab’s regular sales are chronicled on this specific page.

Crowdfunding

LendInvest Set To Debut On LSE (subscription)
Emma Dunkley – Financial Times

LendInvest is set to become the first P2P platform in the UK to list on the LSE.

Other stories

ISDA Statement Re: CFTC Commissioner Giancarlo’s White Paper On SEF Rules
MondoVisione

Commissioner Giancarlo’s paper is a constructive step forward in the ongoing discussion about the appropriate market structure for swaps and derivatives trading.

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