FEBRUARY 13 2017

Exchange Invest issue 931 coincides with a type number over in Zuffenhausen which was both the left hand drive version of the 924 Turbo and a turbocharged 924 engine which was destined for a potential record breaker. I remember well being crammed into the back of an early 924 turbo on a high speed trip around the English midlands one late night driven by a motorsport mad Argentine hotelier when visiting the European F2 championship at Donington in my childhood… an era before Maurice Gatsonides’ photographic ingenuity somewhat changed motoring.

In Today’s Exchange Invest

DB1 trying to silence speculation as Spiegel reckons Carcrash knew of deal a month before he bought his shares… while the EU is already apparently testing market response to remedy of Clearnet sell-off. New Chairman for Sebi replacing retiring UK Sinha as TP ICAP fight executive pay backlash.

And there’s more, – lots more – happy scrolling:

In BigWorld

As we entered the era of smart appliances a year or so back, I noted on Twitter how the long winter’s nights would never be the same again with the lure of being able to chat to your fridge.

Already innovation has moved on. It now seems, in the age of smart appliances, the biggest danger to cybersecurity may be your toaster being hacked… (“Today even your kettle can be targeted by cyber criminals – business must be prepared” by UK Finance Minister Philip Hammond MP).

How soon before a compromised toaster is accused of stealing algo secrets from an HFT firm?

…Or will the HFT firms try to claim it was their toaster which did the spoofing?

Public Markets

Brief – Palestine Securities Exchange FY Profit Rises
Reuters

Deutsche Börse CEO Talked To Merkel Adviser About LSE Tie Up Before Share Purchase: Spiegel
Financial Times
Deutsche Börse Boss Faces New Insider Trading Questions
The Local Germany
Deutsche Börse: Statement On Current Media Reports
DB1

PLY: As I noted in Premium last week the timetable already looked ultra tenuous, some might say downright dubious given other issues but this does suggest there is substance to the accusations against the DB1 CEO despite the bluster of DB1’s PR machine.

German Bonds Said To Be A Focus Of DB1, LSE Deal
Bloomberg

PLY: Not sure I follow this statement: “Electronically traded German bunds will soon be cleared through a French unit controlled by LSE…”

Sebi Board Discusses Big Bang Issues; New Stock Exchange Rules On Cards
Business Standard
Sebi Says Actions Underway To Address NSE Co-Location Case Concerns
Business Standard
Sebi Proposes To Reduce Listing Time
The Indian Express

PLY: Clearly a busy board meeting at the weekend…and see below, a new Chairman for Sebi was announced by the government too.

Duty Breather Proposal For Stock Investors
Times of India

The Week The Entire Industry Changed: A Recap Of FXCM’s Shameful Unraveling
FinanceFeeds (blog)

On Monday, February 6, 2017, FXCM along with its CEO Drew Niv and senior Managing Director William Ahdout were permanently prohibited from US regulated business by CFTC.

OANDA Supports CFTC’s Move To Protect The Interests Of Traders – A Statement By Vatsa Narasimha, Chief Executive Officer At OANDA
MondoVisione

PLY: Oanda’s CEO is right to express thanks to CFTC for they have done the parish a huge service. Investor clients will know I have been resolutely unable to square the circle between FXCM’s profitability and its role as a pure agency broker. Now we realise the truth is it was all a scam with an in-house market maker. Quite disgusting but a good example of the hubris around the parish amongst those who clearly believe they can never be caught.

JSE’s Appeal Against Zar X’s Licence Dismissed With Costs
Moneyweb.co.za

The Financial Services Board (FSB) Appeal Board has dismissed the consolidated appeals of the JSE and 4AX against the regulator’s granting of an exchange licence.

Can the JSE and new exchanges reach an understanding?
Moneyweb.co.za

PLY: Good to see competition permitted in South Africa while the JSE has self-inflicted a PR shambles (at best) by looking out of touch with capitalism in its efforts to maintain a monopoly. Moreover it now approaches cooperation agreement time with a disadvantage – any further efforts at stalling the open market will presumably be viewed dimly by the regulators.

It’s truth and reconciliation time for JSE which needs to make a clean break and apologise to the market for its protectionist knee jerk reaction.

EU Commissioner Valdis Dombrovskis Opens London Stock Exchange Trading
MondoVisione

PLY: Clearly no conflict of interest there ahead of the EU antitrust decision pending?*

*Or, maybe Carsten Kengeter invited VD in November 2015 around the time he was allegedly chatting to German officials.

EU Financial Services Chief Warns Us Against Unpicking Bank Rules
Yahoo Finance
EC: Speech By Vice-President Dombrovskis At Bloomberg’s “Accelerating The Capital Markets Union”
Europa EU

PLY: Given that Mr Dombrovskis doesn’t understand markets (nor from my experience take much, if any, interest in them), it is a touch scary to see him prognosticating on the topic but he has shown the usual ‘precaution’ which will doom Europe to irrelevance and obsolescence.

UK Must Wake Up To Risks Of LSE/Deutsche Börse Deal
Financial Times

PLY: Out there in the pink bubble, at least Mr Ford has got to the plot on the UK risks…as discussed in Exchange Invest for the better part of the last year. I am not sure, however, the issue is the UK not being awake. Rather I suspect the British government hopes continental regulators will kill this deal before Britain has to step in.

However, it is very interesting to see the poster children of blind Europhilia at the “Brussels Bugle” publishing this article as it suggests either within the building or at HQ in Tokyo, somebody has twigged that the FT might struggle in Brexit Britain given its ‘remoanian’ denialist stance.

Private Markets

NSE IPO Is Our Immediate Priority: CEO Vikram Limaye
DEALSTREETASIA

PLY: Mr Limaye’s salary data is discussed later in today’s Exchange Invest.

Fastmatch: Leucadia’s Sensible, Profitable And Institutional Savior. The Rest Of FXCM Is Fire-Sale …
FinanceFeeds (blog)

PLY: With FXCM defenestrated by the CFTC (good job!), attention focuses on Fastmatch the forex platform believed to have been coveted by ICE in recent times.

Channel Islands Exchange CISE Rebrands As TISE
Finance Magnates

PLY: The Channel Islands SE which was CISX before a scandal a while back is now going global with the rather grand moniker “The International Stock Exchange” a title previously used, briefly, by the London Stock Exchange 30 years ago until it reverted to its city type. Note CISE/TISE is not to be confused with the International Stock Exchange Group which was mentioned here last week – a curious perhaps unregulated crowdfunding cum exchange group.

Frankly, I think the title suggests some delusions of grandeur from what is a neat niche primary venue exploiting the stupid, er,sorry, overly prescriptive, EU rules on bond listing.

Channel Islands’ Stock Exchange To Open Isle Of Man Office
International Adviser

PLY: Perhaps the reason for the “International” name change as the Isle of Man is always competing in many ways with the Channel Islands?

China’s Guangdong Plans Offset Futures As First Step To New Carbon Exchange
Carbon Pulse (subscription)

Guangdong wants to offer futures contracts in trading the national carbon credits as its first product to facilitate the building of its futures exchange.

Misys Eyes Another Float Attempt As Window Opens For New Listings
Telegraph.co.uk

Special Section: FTI, NSEL, India at the Crossroads

Sebi Board Discusses Action Taken In Rs 5600-Crore NSEL Scam
Business Standard
PLY: Once again, execution required…

Technology

International Property Securities Exchange Selects Scila For Real Time Market Surveillance
LeapRate

PLY: Good news for the Scila team.

EquiChain – A Global Capital Markets Infrastructure Platform To Drive Market Efficiency And Improve Global Investor Access In Emerging And Frontier Markets – A Working Distributed Ledger Technology-Based Solution Built By Senior Capital Markets Practitioners
MondoVisione

PLY: Another new blockchain/DL play…

Products

Legal Hurdle Forces Sebi To Defer Decision On Allowing Commexes To Launch Options
Economic Times

South Korea Confirms Fresh Short Selling Rule Deadline
securities lending times

Digital Technology Opens The Door To ‘Alternative Assets’, But What Role Will Banks Play?
South China Morning Post

PLY: Clearly a role of ‘catch up’ given I explained this trend in my first book “Capital Market Revolution!” in 1999.

About Time The Nairobi Securities Exchange Innovated
Kenyan Wallstreet

Career Paths

Ajay Tyagi Appointed As New Sebi Chief
Livemint

PLY: Could prove a baptism of fire depending on how the final weeks of UK Sinha’s term pan out.

Vikram Limaye To Receive A Remuneration Of Rs 8 Crore At NSE
BloombergQuint

PLY: Comfortably breaking the million dollar US barrier.

LME’s Chamberlain Favorite To Take Wheel Of Metals Juggernaut
Reuters

PLY: Matt Chamberlain having been hired directly by Charles Li himself from his investment banking position, is ideally placed to be the new CEO of LME. I hope he is given the chance to make the masterplan happen.

Broking Giant TP ICAP Tries To Head Off Executive Pay Rebellion
Telegraph.co.uk

PLY: Senior management accused of setting hurdles to success too low…

Korea Exchange Chief Drawn into Park Scandal
Regulation Asia

Employees Of The Tel Aviv Stock Exchange Signed A Collective Labor Contract
News Israel today

Federal Reserve System: Daniel K. Tarullo Submits Resignation As A Member Of The Board Of Governors, Effective On Or Around April 5, 2017
Federal Reserve

Regulator Selects Independent Directors For DSE, CSE
Financial Express Bangladesh

PLY: Ferheen Mahomed will serve as HKEX Group General Counsel from today, she was formerly with Pacific Century group.

Crowdfunding

Can You Trust Crypto-Token Crowdfunding ?
TechCrunch

In 2016, blockchain startups raised some $200 million in Initial Coin Offerings (ICO), a new form of crowdfunding based on cryptocurrency tokens.

Surge In Internet Crowdfunding Sees City Floats Lose Their Appeal: Now Small Firms Turn To Web For Investors
This is Money

A plunge in small firms joining the City’s junior stock market could be down to thriving public investment through crowdfunding websites, analysts claim.

Other Stories

Regulators Thought Bernie Madoff Was Innocent
Neil Crammond

PLY: Brutal and to the point, Neil makes a very pithy point – exchanges could be exposed if / when an HFT crackdown on spoofing finally takes place.

FTSE Mondo Visione Exchanges Index Up By 6.0% In January – BSE Joins FTSE Mondo Visione Index
MondoVisione

WFE Publishes 2016 Market Highlights
World Federation of Exchanges

Thanks as always for reading Exchange Invest, keeping you abreast of parish developments.

Have a great week.

Best wishes,

Patrick

Patrick L Young
Executive Director DV Advisors

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