FEBRUARY 1 2017


Welcome to February, a month with lots of excitement on the horizon, while issue 923 recalls a rather unsung 2 litre Porsche engine variant.

In Video

PLY on FinTech, “Victory or Death” – the future of finance.

In Today’s Exchange Invest

It’s the first trading day of the Chinese Year of the Rooster. NASDAQ reports results, takes $578 million writedown on eSpeed and (hyper-unsurprisingly) kills off the NLX burn. Another slight delay in the DB1-LSE antitrust process at EU level.

And there’s more, happy scrolling:

In BigWorld

Given the essential vapidity of all too many outlets, it is not difficult to take potshots at the legacy media these days. In many parts they look like a burnt out oasis of insight awaiting a government bailout – and as all good Schumpeterians know, the latter never helps cure anything.

However, one reason Reuters have been a leading news agency for a couple of centuries, is driven by their thirst for a coherent, fair-minded and indeed, long-term, perspective (all absent on the vast majority of, say, 24 hour rolling ‘news’ TV for instance). My attention was brought to this elegant article by the Reuters Editor-in-Chief Steve Adler. Like his many predecessors, he has a clear understanding of perspective and the public’s general revulsion at current mass media failings. Covering Trump The Reuters Way is as good an advertisement for the Reuters product and indeed the potential for enquiring, balanced and coherent news media. Hopefully Reuters’ competitors will also take note of this thoughtful article. It might make the Bigworld out there more interesting – it would certainly be better recorded.

Public Markets

Nasdaq Reports Fourth Quarter 2016 With Record Revenues; Announces Segment Realignment and Rebranding of Fixed Income
…Closes NLX
NASDAQ

PLY: Confident call debut for CEO Adena Friedman as she does the obvious first term chief approach and takes a few hits on her honeymoon. (A rather swingeing writedown on eSpeed suggests so far Howard Lutnick got the better side of that deal). NLX has had various legacy media suffering paroxysms but that regret is probably more because they so lavishly benefited from the platform’s largesse – when it was little more than an arm of the Fed’s Quantitative Easing programme masquerading as an MTF.

Those who can see beyond the strictly linear will see no surprise in the death of NLX (albeit the later management team of Victoria Kent and Carl Slesser did a good job when dealt an ugly hand of discredited brand and becalmed marketplace). Overall losses were not too substantive (while excessive for what was undertaken imho) to the group and NASDAQ clearly has learnt from the experience with the way European (especially London) operations have now been better focussed within the group.

NB Advisory clients will note that I have long stated that the NLX business would be closed soon after the accession to CEO of Adena Friedman.

Ancient history now but at the time it made an impact. My Premium coverage distilled into this NLX Brief takes you through how Exchange Invest uniquely led understanding of NLX’s flawed hubris.

Now it’s time to see the NASDAQ vision of Adena to take the company to the next level building on the remarkable achievements during the tenure of Bob Greifeld. This was an encouraging start, with house cleaning and some sparky comments. Oh and compare / contrast between the customer-centric praise for OCC and the brutally spiky (but entirely justified) critique of LCH (circa 1 hour 04 on the tapes) – thought provoking.
Deutsche Boerse-LSE Said to Extend EU’s March 13 Deal Deadline
Bloomberg

PLY: A possible market test of the proposed remedies is being suggested – is this blob box ticking to precision, so as to mitigate the DB1 hissy fit when (again) their monopolistic aims are thwarted, or is the EU antitrust feeling the pressure from the DB1-LSE investment banker management’s high pressure approach to pushing their egregious monopoly?

NYSE Finalizes Acquisition Of National Stock Exchange
MondoVisione

Japan Exchange Group Invests In UK Fintech Startup Opengamma
Reuters

PLY: Interesting move as Japan Exchange joins a fascinating cap table led by NEX’s VC fund.

Japan Exchange Group Status Of Acquisition Of Own Shares
MondoVisione

MCX Operationalizes Its New Office At Gift City
The Dollar Business

Private Markets

A remarkable first: Not a jot of news from the private exchanges overnight.

Special Section: FTI, NSEL, India at the Crossroads

And nada to progress here too.

Technology

IPC Teams With Verba To Offer Holistic Collaboration Recording Solutions For Financial Markets Customers Using Skype For Business™ – Advanced Compliance Recording Solutions To Mitigate Risk And Improve Competitive Edge
MondoVisione

PLY: Funny really: IPC is a dinosaur of turrets still battling on while Skype is the dinosaur of VOIP with far lower quality of service compared to, say WhatsApp (amongst others). A first analogue/digital partnership of blacksmiths?

BT To Acquire IP Trade SA To Boost Unified Communications Solutions For Trading Floors And Control Rooms – Global Finance And Command-And-Control Markets To Benefit From Best-In-Class Real-Time Collaboration Combining IP Trade Solutions With BT’s Global Cloud And Sector Expertise
MondoVisione

Products

CBOE Launches S&P 500 Range-Bound Premium Income Index (SPRI)
MondoVisione

Career Paths

Former CEO Of Boston Consulting Group Joins Bitcoin Startup Bitpay
EconoTimes

NYSE President Tom Farley Talks History, Technology, And Simplifying Trading
Business Insider UK

PLY: What particularly strikes me about this interesting interview with the ever-perceptive Tom Farley is that it again shows how derivatives people can comprehend and work with cash market structures in creative ways whereas is the true of cash market folks trying to understand the 3 dimensions of derivatives?

PLY: Congratulations to Andrew Bond, RBC’s US analyst for the parish who has been promoted to Head of US Market Structure by RBC.

Ontario Securities Commission Announces New Securities Proceedings Advisory Committee Members
MondoVisione

PLY: Liquidnet has hired industry veteran Dan Squires to increase the sales focus to European hedge funds while also in London, Jacob Howard, formerly of NYSE Euronext is now running marketing and communications in Europe, good luck to both of them.

Crowdfunding

Dubai Financial Services Authority Proposes Framework For Loan-based Crowdfunding To Support SME Financing
WAM

PLY: Excellent in theory, I hope the practice works out too.

Other Stories

ESMA Consults On Future Guidelines For Portability Between Trade Repositories
ESMA

The Changing Face of Client Derivatives Clearing
Contango Markets

PLY: Clive Furness discusses the incredible shrinking FCM and more.
Thanks as always for reading Exchange Invest.

Best wishes,

Patrick

Patrick L Young
Executive Director DV Advisors

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