February 11 2016

elb2EU steps back from the brink of Mutually Assured Clearing Destruction but imposes a few little foot stomps to show the Americans they can’t take being the world’s biggest economy for granted when dealing with their grumpy, reactionary, regressing, perma-recessionary neighbours. Mass relief in some quarters that the Boca poolside bars won’t have to descend to work during March while the more sober onlooker will appreciate that a disaster has been avoided. Albeit this silly brinksmanship has made the regulators look like haughty ungentlemanly amateurs all round.

Various results, plus a great white paper from NASDAQ all about CMU on what is a hugely busy day for news and one where you cannot afford to impinge upon the water cooler or social media, let alone your inbox, without first having a good scroll of today’s unique Exchange Invest Daily:

Meanwhile, in bigworld, Bernie & the Donald win big making it a mixed day for hairdressers. At the same time, watching Trump on the podium surrounded by his elegantly coiffed entourage, there was more hair product at the dias than any time since the heyday of John Edwards’s 2008 primary campaign (at least Trump doesn’t risk an indictment for campaign finance abuse for the remarkable locks in and around his campaign).

Public Markets

ASX Half-Year Results To 31 December 2015 (1H16)


Statutory profit after tax AUD 213.1 mln (USD 151.1 mln), up 7.3%, operating revenues AUD 376.2 mln (USD 266.8 mln), up 7.9%.

View also the Analyst Presentation.

PLY: Not bad but then again when you’re a monopolist holding all the cards…


Oslo Børs VPS Holding ASA – Q4 2015


vs Q4 2014: Reported revenue NOK 223 mln (USD 26 mln), down 3.8%, EBIT 73 mln (USD 8.51 mln), down 5%.

PLY: Slightly disappointing but the new Merkur (SME) market is on stream and Oslo Bors continues to occupy tantalising niches.


BGC Partners Q4 2015 Results

BGC Partners

vs Q4 2014: Revenues for distributable earnings $692 mln, up 34.3%, adjusted EBITDA $481.4 mln.

vs 2014:  Revenues for distributable earnings $2.64 bln, up 43.4%, adjusted EBITDA $875.5 mln, up 155.9%

PLY: Howard Lutnick powers on.


Markit Q4 2015 Results


vs Q4 2014: revenue $291.5 mln, up 7.4%, adjusted EBITDA $131.8 mln, up 5.7%

vs 2014: revenue $1.11 bln, up 4.5%, adjusted EBITDA $496.9 mln, up 1.8%

PLY: While I love Markit, I am minded to wonder how long before ICE swoops. $5 billion, crunchy data and a series of bank shareholders who would welcome cash as they desperately seek solvency. ICE are after all committed to Singapore too which may help with GSIC.


FTIL Results for Quarter & Nine Months Ended Dec 31 2015


QoQ: income from operations USD 5.17 mln, flat, loss USD 7.1 mln, flat.

PLY: In some ways a miracle to be flat…then again some cynics don’t believe any FTIL data given past events.


TMX Revenue Reporting Reclassification – 2014 To Q3 2015 Historical Revenue


PLY: Elsewhere I see Canadian media trumpeting TMX as the best performing share in exchanges so far this year – a pleasant bauble albeit a poisoned chalice, & given past performance, it may just be a rebound. However value addition is always welcome, and here we see some evidence of TMX endeavouring to reshape itself towards the future.


CFTC & European Commission: Common Approach for Transatlantic CCPs


EU, U.S. Reach Deal on Clearing Rules for Derivatives Market

Silla Brush & Julia-Ambra Verlaine – Bloomberg

U.S. & EU regulators reached an agreement on oversight of the $553 trillion global derivatives market, seeking to prevent capital increases from hitting EU banks this year and enabling CME to continue settling…

EC said Wednesday that it would adopt a so-called equivalence decision “shortly,” acknowledging that U.S. supervision of clearinghouses such as CME’s is equivalent to its own. Without the key finding, traders would have faced higher EU capital requirements if they wanted to clear swaps, futures and other derivatives in the U.S.

PLY: As is the way with negotiations – as opposed to just decisions – the EC makes a few feet stomps to assert its own self-importance (fiscal rectitude being a bare third or fourth in order of EU preference for their perverse notion of good governance). Thank goodness we have a deal. It looked as if the egos were simply incapable. This brinksmanship leaves the regulators looking damaged through dithering and horrendous hubris. Relief at the FIA presumably that the Boca boondoggle won’t see golf games overly interrupted by an outbreak of business. For a moment it was looking worryingly as if there might be all manner of people trying to actually do business in the Beach club cabanas. Perish the thought!

Statement Of CFTC Chairman Timothy Massad Regarding Common Approach For Transatlantic CCPs


Statement Of CFTC Commissioner J. Christopher Giancarlo On European Union Determination Of U.S. Central Counterparty Clearinghouse Equivalence


Statement From US Treasury Secretary Jacob J. Lew On The Agreement Between The Commodity Futures Trading Commission And The European Commissioner For Financial Stability On A Common Approach For Transatlantic CCPs


PLY: To save time, all these messages essentially say “PHEW!” in Washington-speak.

EU-US Clearing Deal ‘Good Enough’ To Avoid CME Exodus

Fiona Maxwell – Risk

PLY: & I reiterate from my own part: Phew!

ESMA Resumes US CCP Recognition Process Following EU-US Agreement


PLY: A tawdry episode of anti-competitive action in the canon of EU incapability needs to have a line drawn under asap with regulation of all pertinent CCPs the world over.


European Commission Extends By One Year The Application Date For The MiFID II Package


EU Proposes New Securities Rules Be Delayed Until 2018

Huw Jones – Reuters

MiFID II Reporting Gets Pushed Back Again, This Time Until January 2018

Ron Finberg – Finance Magnates

PLY: Everybody involved in this broad farago of regulatory overreach joins the “Phew!” bandwagon. Elsewhere Markus Ferber, MEP & former rapporteur ponders just why it takes so long to get the blob to make this decision formally given they have been talking about it for months…

Research Costs Back In Focus With Mifid II Delay (subscription)

Tim Cave – Financial News


SEC Adopts Cross-Border Security-Based Swap Rules Regarding Activity in the U.S.


SEC Approves Rules For Swap Dealers On U.S. Soil


SEC Chairman Mary Jo White said the rules would help avoid “a world in which market participants are able to exit our regulatory framework without also exiting the U.S. security-based swap market.”

Statement At SEC Open Meeting On Final Rules Regarding Application Of Title VII Dealer De Minimis Requirements To Security-Based Swap Dealing Activity In The United States


Statement At Same Open Meeting, SEC Commissioner Michael S. Piwowar, Feb. 10, 2016


Statement At Same Meeting, SEC Commissioner Kara M. Stein, Feb. 10, 2016



LSE Eyes Late May For Curve Global Launch (subscription)


LSE has agreed a provisional plan to launch its new rates exchange Curve Global at the end of May.


Dark Pools’ Market Share Drops for First Time in Europe: Chart

John Detrixhe – Bloomberg

PLY: Interesting chart but not seen the report from Rosenblatt so cannot comment as to whether this is purely “Institutional Liquidity Pools” or the dark space junk including systematic internalisation etc.


ICE Clear Canada Receives Third-Country Central Counterparty Recognition Under EMIR



CFTC Too Broke to Properly Police Flash Traders, Massad Says

Jesse Hamilton – Bloomberg

PLY: As I told you, years ago, dear reader…but at least I admire the Chairman’s candour. If regulators all behaved this honestly who knows what progress we might make?


Leveraging Capital Markets Essential For Europe To Reach Its Full Potential


Nasdaq published a white paper entitled “Capital Markets Union: The Road to Sustainable Growth in Europe.”  The white paper addresses the European Commission’s proposal and action plan for a CMU, and highlights Nasdaq’s view on what needs to be done in order to create financial stability and get Europe back to sustainable growth. QV Premium: EU CMU Brief.

PLY: This is a brilliant white paper and I recommend you read it. As a synopsis with some added context, I have devoted a Premium post – read here – to this excellent initiative building on the FESE led IPO Task Force et al.

Private Markets

Tadawul – Changes To Its Equities & ETF Markets Trading Hours



ABX – First Global Institutional Exchange For Precious Metals

Yohay Elam – Forex Crunch

PLY: Confusingly titled, this is apparently not the same as Allocated Bullion Solutions of Singapore who offer various services and are in the process to deliver a solution to the LBMA.

N.B. In a frantic race to pixel yesterday, I inadvertently rendered the name Allocated Bullion Solutions incorrectly when discussing the  LBMA tender – my apologies to all concerned!

Dividend News

BGC Partners declared a quarterly cash dividend of $0.14 payable on March 16, 2016 to Class A and Class B common stockholders, record date March 2, 2016. The ex-dividend date will be February 29, 2016.

The Board of Oslo Børs VPS Holding intends to propose to the AGM that a dividend of NOK 4.15 per share should be paid in respect of the 2015 financial year.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX off 2%, FTIL down 3%.


Markit Ltd. Acquires Syndicated Loan Technology from J.P. Morgan


Markit acquired systems integration software developed by J.P. Morgan. Markit will make the software available to sellside and buyside institutions seeking to integrate with major systems used in the syndicated loan market, including agent servicing platforms and Markit’s trade settlement services.


Blythe Masters: Blockchain Initiative Is Drawing In Regulators

Andreas Kroner & Jonathan Gould – Reuters


CME – Measures to Further Enhance Livestock Market


Reduction of CME livestock trading hours.

Review of Worthing, South Dakota delivery point for Live Cattle.

Formation of a cattle market joint working group.


Traiana, BATS Chi-X Europe Link Services To Expand OTC Equity Trade Clearing

Maria Nikolova – LeapRate

PLY: A good move which on a less busy day would earn more comment.


Powernext – Storengy/PEGAS: BETSY, A New Tool Bringing Short-Term Flexibility To The Market



BSE Bats For Separate Commodity Segment on Stock Exchanges


BSE has urged the government to permit equity exchanges to have a separate commodity derivatives segment, a move that could bring down cost and time as the exchanges already have the necessary technology platform and risk management framework in place.


ICEX To Relaunch Non-Agri Futures

Dilip Kumar Jha – Business Standard

Anil Ambani-led Reliance Group anchored Indian Commodity Exchange (ICEX) is set to re-commence futures trading in non-agro commodities by early next financial year subject to regulatory approvals.


Nadex Halts Trading in Bitcoin Binary Options Contracts

Avi Mizrahi – Finance Magnates

…plans to resume trading in the Weekly Bitcoin contracts when the Tera Bitcoin Price Index becomes available again.

Career Paths

bobsguide reports that Moody’s has elected Bruce Van Saun to its board of directors effective March 1, 2016. Bruce will serve as a member of the board’s Audit and Governance and Compensation committees.

Finance Magnates reports that former Barclays CEO Rich Ricci has opted to join the ranks of fintech startups, landing at P2P currency exchange venue freemarketFX as its newest Chairman with immediate effect.

Speakerbus, the specialist provider of critical voice solutions for global financial markets, emergency and command and control (C2) infrastructure, appointed Jennifer Rossdale as Regional Sales Manager for the U.S. East Coast Region. The senior technology specialist joins from BT, where she served as a Global Account Director.

Former Chicago Board of Trade Chairman Dead At 78

Daily Herald

Karsten “Cash” Mahlmann of Barrington Hills, a former chairman of the Chicago Board of Trade from 1987-1990, died Monday. He was 78.

PLY: Our condolences to Mr Mahlmann’s family.


Bond Trading Desks Get a Hand From Algorithmic, Equity Veterans

Alexandra Scaggs & Dakin Campbell – Bloomberg

Financial Calendar

11.02 – TMX Q4 2015 Results

New! 16.02 – ISE Mercury Launch

New! 16.05 – ICAP results for the year ended 31 March 2016

New! CFTC’s Technology Advisory Committee Meeting Rescheduled to February 23, 2016

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

Share Notes

CBOE CFO Alan J. Dean sold 7,500 shares Monday, February 8th at $58.57 (bargain $439,275.00). He now owns 51,495 shares.

Analyst Notes

LSE “Outperform” Rating Reaffirmed By BNP Paribas – GBX 2,700 Target Price

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.


Crowdfunding Investments On Seedrs Surpasses £100 Million

Ben Rossi – Growth Business

Other stories

Testimony Of CFTC Chairman Timothy G. Massad Before The U.S. House Committee On Agriculture



ESMA Publishes First Supervisory Convergence Work Programme



ESMA Publishes Responses To The Consultation On Access, Aggregation & Comparison Of TR Data



ESMA Publishes Responses To The Consultation On PRIIPs Key Information Documents



Eric Schneiderman: Why Daily Fantasy Sports is Gambling


The first time that daily fantasy sports caught the attention of New York Attorney General Eric Schneiderman was late last summer, when an advertising blitz made it close to impossible to watch an NFL game without seeing an ad for one of the industry’s two most popular sites, DraftKings and FanDuel.

PLY: And in parallel, it could be the making of a political career…


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