February 08 2016

elb2A spirited round of ‘stakemania’ is in the air with MOEX buying as a big shareholder exits, EBRD ticking up BvB stake, Chicago Stock Exchange being sold to somebody I have never heard of…& there’s more. Meanwhile, the Curve shareholder list hits the public domain while it is not a great day for regulator competence on various continents.

Out there in a small piece of ‘Bigworld,’ the Irish General Election campaign is ongoing and remarkably the PM is narrowly ahead despite overseeing considerable austerity. Read my latest OpEdge column. Meanwhile for those who missed the SuperBowl, I don’t know what happened either but the Bathurst 12 hours was spectacular. Onwards to New Hampshire and Happy scrolling:

Public Markets

CME Q4 2015 Results

CME

vs Q4 2014: total revenues $813.8m, down 3.2%, net income $291.7m, down 4.8%

vs 2014: total revenues $3.326 bln, up 6.8%, net income $1.247 bln, up 10.7%

PLY: Good annual results helped propel CME back above ICE again (clearly that Golden Cross is not yet ready to yield to the seemingly inevitable march of ICE supremacy).

 

MOEX Falls After CIC Exits

Ksenia Galouchko – Bloomberg

Chengdong Investment Corp., a unit of China Investment Corp., sold its 5.2% stake in MOEX at 89 rubles a share, according to an e-mailed statement. CIC raised 10.6 billion rubles ($138.9 million) from the sale, which offered the stake at an 11% discount to the Feb. 3 closing level. QV Premium: Exchange Deals Brief 2.

PLY: See my Premium Post on this very topic, this delivers an interesting buying opportunity in MOEX while the stock is artificially oversold.

 

Citadel Buys NYSE Market Making Business (subscription)

Nicole Bullock & Adam Samson – Financial Times

As expected, Citadel is buying the NYSE market making business of fellow HFT KCG. Terms not disclosed. Deal comes after another HFT, GTS, last week bought Barclays’ NYSE market making business, marking the exit of the last major bank from the floor. QV Premium: Exchange Deals Brief.

 

EBRD Increases Stake In BVB To 5.12%

The Diplomat

EBRD has increased its stake in Bucharest SE (BVB) to 5.12% from 4.99%, through the purchase of 10,000 BVB shares on 1 February 2016 to reach a total of 392,942 shares. QV Premium: Exchange Deals Brief 2.

 

PSE Waiting For SEC Okay On Proposed PDS Takeover

Business World Online

PSE is still hoping for a positive resolution to the much-awaited unification of the country’s equity and fixed-income trading platform despite delays in securing regulatory approval. QV Premium: PSE – PDEx Merger Brief.

PLY: At this rate, even indecisive Dave Chamberlain, er, Cameron, will be agree to build a new Heathrow runway sooner.

 

Curve Global Shareholding

The Registrar of Companies for England & Wales

Curve Shareholding

Exchange Invest Premium

PLY: Meanwhile, the shareholders of Curve have been published in the UK company register. There is a full breakdown of the holders and the A & B shares in EI Premium. Here is the total economic interest of the shareholders:

LSEG 25.99%

Bank of America Strategic Investments Corp. 11.66%

Barclays 11.66%

JPMC Strategic Investments I Corp. 11.66%

Goldman Sachs 11.66%

CBOE III, LLC 10%

Citigroup Global Markets Ltd. 8.33%

BNP Paribas Arbitrage 5.67%

Societe Generale 3.33%

 

IEX Forms Committee To Advise On Policy

John McCrank – Reuters

IEX Group is forming a committee of brokerage executives to help advise it on market issues once it becomes a registered U.S. exchange.

PLY: Keeping as many in the tent is a good move while the more aggressive end of the HFT market attacks with the blunt remorselessness of one of their algorithms.

Will IEX Be Able To Fix The Market?

Tim Quast, Founder & President of Modern Networks IR – CNBC

 

EU Banks Plan To Flee CME When Key Emir Date Arrives (subscription)

Fiona Maxwell – Risk

Some European banks will stop clearing at CME in less than three weeks, unless a protracted stand-off about clearing house oversight can be quickly resolved. Without a ruling that US supervision is equivalent to Emir, there is a risk any trades sent to CME from February 21 – an Emir milestone – would later be deemed non-compliant.

PLY: In which case, the regulators will have clearly failed to do their duty to the public.

 

LME Gives Metal Warehouses The Chance To Cut Rents

Pratima Desai – Reuters

LME is giving its approved warehouses the chance to cut rent and free-on-truck levels for the year starting April 1, after saying last year it would look at capping charges.

 

Six Members Resign From LME

Dow Jones Business News

Six companies, including the world’s second-biggest iron ore exporter, Rio Tinto, have given up their membership of LME.

PLY: Structural changes happen and without the incentive from equity, it is not implausible to see such shifts, I doubt LME management are unperturbed but these things can happen.

 

ITG Chief Seeks New Path for Troubled Brokerage (subscription)

Sarah Krouse & Bradley Hope – Wall Street Journal

Frank Troise is three weeks into the job as CEO of ITG and he faces a familiar task…

 

Prosecutors Say Most Of Sarao’s Victims Are In The US (subscription)

Jane Croft & Philip Stafford – Financial Times

QV Premium: Flash Crash & Hound of Hounslow – Brief and The Kennel – Premium discussion of the “Hound of Hounslow”.

PLY: From the 8th to the 18th century it was not unknown to try animals for ‘crimes, ’ particularly pigs. “Irrational barbarism” as one Wired Magazine article aptly termed it. Of course in these enlightened, liberal times that would appear a whacky concept…oh, apart from the equivalent of a witch burning show trial for the Hound of Hounslow. In other news, Tom Hayes, the oxymoronically sole conspirator in the FCA’s lavish LIBOR show trial shambles is considering a new appeal given all his co-conspirators…well, weren’t co conspirators, somewhat leaving his own conviction a touch exposed.

 

FCA Boss: Mifid II Phase-In ‘Would Have Been Helpful’ (subscription)

Tim Cave – Financial News

A staggered introduction of the EU’s revised trading rulebook would have been helpful for financial firms trying to get to grips with the radical changes, according to the head of the regulator that will implement them in the UK.

Private Markets

China Group To Buy Chicago SE

Matt Egan – CNN Money

Chinese Takeover Of Stock Exchange? Used To Be Chinatown Neighborhood

Chicago Argus

China Can Have The Chicago Exchange

Gillian Tan – Bloomberg

Is CSX the Next Amex Options?

Markets Media

PLY: An interesting overseas purchase (no terms released) from a group (Chongqing Casin Enterprise Group) of which we know little buying 0.5% of US equity market volume with an exchange licence…ironically enough, located in what was Chicago’s ChinaTown.

QV Premium: Exchange Deals Brief.

 

MOEX Completes Deals To Sell Stakes In PFTS & Ukrainian Exchange

Reuters

Completed sale of its 50.02% stake in Ukrainian PFTS Stock Exchange.

Decreased its stake in Ukrainian Exchange to 23.09%, in final stage of negotiations to sell remaining stake. QV Premium: Exchange Deals Brief 2.

 

NSE Pitches For Self-Listing; Sebi Firm On Cross-Listing Rule

Business Standard

However, BSE has said it has no problem with cross-listing:

BSE Appoints Lead Merchant Banker, Legal Team For IPO

Ashley Coutinho  – Business Standard

While NSE’s IPO plan seems stuck, rival BSE has appointed the lead merchant banker (Edelweiss Financial Services) and legal team (AZB & Partners and Nishith Desai Associates) for its coming issue.

 

Meet The Man Taking On The JSE

Sungula Nkabinde – Moneyweb

PLY: Profile of Francois Venter, ex-BESA staffer and Trop-X founder, whose venture SAFE was previously mentioned here.

 

Nigerian SE Releases Interpretative Guidance On Index Circuit Breakers’ Rule

World Stage

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL jumps 6% while MCX is up 1%.

Technology

BSE Institute Launches New Accelerator For Startups

Forbes India

BSE Institute, a wholly owned subsidiary of the Bombay SE (BSE), on Friday launched a new accelerator for startups in collaboration Ryerson University, Ontario, Canada.

 

SQS Warns About Algo Risk…

SQS

SQS is working in partnership with Traderserve to provide a managed testing service, combining Traderserve’s proven and sophisticated test environment AlgoGuard which emulates real world market micro structures, coupled with the unparalleled testing consultancy expertise of SQS.

Products

Citadel Pushes SEC To Fix Fractured CDS Market

Sridhar Natarajan – Bloomberg

Ken Griffin’s Citadel is urging SEC to finish writing rules that mandate central clearing of CDS — a move it says would help revive a shrinking portion of the $13 trillion market.

PLY: I would imagine many who don’t follow the minutiae closely will be shocked that CDS are not already mandatorily cleared. Another good example of what happens when overzealous regulators cannot cope with their own wish list which makes the system look silly.

 

CFTC Head Timothy Massad Says Swaps Industry Shares Blame for Lack of Clear Data (subscription)

Andrew Ackerman – Wall Street Journal

PLY: So let me see the regulator is upset because in the absence of agreed data standards, the data they are receiving doesn’t match up with other data. Er, which movie is showing in this cinema?

 

Hong Kong Approves Leveraged ETFs While Warning Traders of Risks

Eduard Gismatullin – Bloomberg

 

Bloomberg To Extend MTF To Cash Bonds & FX (subscription)

Tim Cave – Financial News

Bloomberg is seeking to extend the licence of its new European swaps platform to include cash bonds and forex products – a move that would pitch it into more intense competition with Europe’s largest exchanges and brokers.

PLY: …and is anyway inevitable, so might as well make the move and get stuck in, after all they did most everything else for the bond market for years and the good folks of Reuters did more to electronify forex than anybody else. Logical move from Bloomberg.

 

A Dying Breed: Currency Traders Are Left Out of New Wall Street

Lananh Nguyen – Bloomberg

PLY: Perhaps the most curious anomaly of this story is not the core ‘fewer fx dealers required’ thrust (that has been clearly apparent since the mid-1990’s) but that one of the core interviewees was made redundant from the economically useful process of being an ICAP broker to become that most economically useless of creatures, a recruitment consultant… Now there’s a business which has no future but bizarrely supposedly intelligent digital financial firms pay their absurdly inept staff vast bounties for utterly redundant intermediation…

 

eWise Launches Its New Aegis Platform At FinovateEurope

MondoVisione

PLY: If any reader is at Finovate and can cut through the breathless hype to show what’s useful, ping me an email, please.

 

Derivatives Trading At Nairobi Bourse Set To Start By March

CNBC Africa

QV Premium: Rise of Africa Brief – Part 5.

Indexes

CBOE Announces Alignment of VIX Index Administration with IOSCO Principles for Financial Benchmarks

CBOE

 

SGX: Singapore LNG Index Can Become Asia Benchmark

Andrea Soh – AsiaOne

Career Paths

CurveGlobal Confirms Andrew Ross As CEO

LSE

PLY: Story we had from FOW scoop as we raced to pixel Friday… Andrew Ross has had positive feedback from several sources over the weekend.

Pershing, a BNY Mellon company, named Lisa Dolly as the company’s new CEO, effective February 16, 2016.

Waters reports that Jerry Casey joins Liquidnet as head of trading strategy, while Craig Viani joins Liquidnet’s Algo Services group.

Lombard Risk Management has appointed Tina Wilkinson as Global Head of Product. Tina joins Lombard Risk from FIS/SunGard where she was Director of Major Accounts.

Financial Calendar

10.02 – BGC Partners Q4 2015 Results

11.02 – TMX Q4 2015 Results

11.02 – ASX H1 Results for FY16

New! 16.02 – ISE Mercury Launch

New! 11.02 – ASX H1 Results for FY16

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

Other stories

CFTC Can’t Give Whistleblower Money Away (subscription)

Jean Eaglesham – Wall Street Journal

CFTC has spent more on administrative costs of its Whistleblower Program than it has paid out in bounties.

PLY: Perhaps that means futures traders are just more legitimate than cash equity players?

 

ESMA, National Securities Regulators & ECB To Exchange Information

MondoVisione

PLY: More big data to manage just when no regulator can cope with their primary sources.

 

ESMA Publishes Responses To Consultation On The European Single Electronic Format

MondoVisione

 

Sebi Ups Revenue Forecast On Higher Fee, Investment Income

Business Standard

 

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