February 19 2015

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EU CMU is coming as DB1 numbers in line with expectations while Virtu rekindles IPO plans a year after “Flash Boys” induced latency. Romania to drop dividend tax while Euronext gets aggressive about cutting derivative trading fees. Happy scrolling…

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Public Markets

DB1 2014 Q4 & Full Year Result
Deutsche Borse

Preliminary results 2014

Net revenue €2,043.0mln, up 7% (2013: €1,912.3 million)

Net profit €762.3 million (2013: €478.4 million). Excluding the non-recurring items mentioned above, consolidated net profit for the year totalled €669.4 million (2013: €636.8 million)

Basic EPS, based on the weighted average of 184.2 million shares, amounted to €4.14 (2013: €2.60 for an average of 184.1 million shares outstanding). Adjusted for the non-recurring items mentioned above, basic EPS were €3.63, up 5% YoY (2013: €3.46)

Preliminary results Q4/2014

Net revenue of €544.5 mln, up 15% (Q4/2013: €473.0 million).
Basic EPS were €1.21, compared with €0.68 in Q4 2013. Adjusted for the non-recurring items described above, basic EPS in Q4 2014 amounted to €0.88 (Q4/2013:€0.74)

Virtu Revives IPO Plans (subscription)
Bradley Hope – Wall Street Journal

Virtu Financial Inc. is reviving its plan to go public, and is expected to file a revised IPO prospectus with the Securities and Exchange Commission within days.

PLY: More fascinating content due to join the investor universe in the near future, alongside it would seem BATS, amongst others…

Read our Premium brief: Virtu Financial IPO Brief.

Euronext Cuts Fees For Equity Derivatives (subscription)
Cian Burke – FOW

Euronext has introduced a single stock future fee holiday until the end of April and plans to slash fees thereafter.

EU Sets Out Road Map For CMU (subscription)
Viktoria Dendrinou – Wall Street Journal
Unlocking Funding For Europe’s Growth – EC Consults On Capital Markets Union
MondoVisione
Unlocking Funding For Europe’s Growth – Jonathan HILL – EU Commissioner For Financial Stability, Financial Services & CMU
MondoVisione
European Commission – Fact Sheet: Q & A On The Green Paper On Building A CMU
MondoVisione

The EU set out a road map for boosting capital markets across its 28 members Wednesday that included a proposed effort to revive Europe’s moribund market in asset-backed securities, in an effort to spur investment and help lift the bloc’s flagging economy.

The plan—which is part of a broader push by the European Commission, the EU’s executive arm, to boost jobs and growth across the continent—is intended to encourage investments, particularly in small- and medium-size businesses.

PLY: I wish every success to Lord Hill on this endeavour as Europe desperately needs reform and the removal of many overly prescriptive and onerous regulations which preclude a better capital market. At the same time pure capital market reform of this nature needs to go hand in hand with broader reform to encourage enterprise to ensure that the end results are not hugely lop-sided towards the progressive European economies who are at least neutral towards commerce (I can’t think of any EU nation currently demonstrating a realistic pro enterprise stance).

Previous mentions and discussions on the CMU topic here, here, here, here and here.

Mifid II Set For Final Paris Showdown (subscription)
Tim Cave & James Rundle – Financial News
ESMA Publishes Addendum Consultation Paper To Implementing Rules For MiFID II/MiFIR
MondoVisione

Much of Europe’s trading community has descended on Paris for a final opportunity to shape changes to a revised version of the EU’s Mifid coming into force in 2017.

Deutsche Bank Revamps European Dark Pool (subscription)
Tim Cave – Financial News

Deutsche Bank, which last year emerged as one of the investment banks involved in a US regulatory probe into anonymous trading venues, has revamped its European dark pool in a bid to win back trust from investors.

Romania’s Government To Drop Dividend Tax Next Year
Romania Insider

Romania’s Government plans to eliminate the taxation of dividends distributed by companies in Romania starting January 1, 2016. The proposal is part of the new Fiscal Code project that was presented by the Government on Wednesday, February 18.

PLY: From a remarkably low base, the Romanian government is finally gaining a modicum of cohesion in terms of building an investor culture but it remains early days.

One-Share Trading When Market Is Ready: SGX Official
Asia One

SGX will eventually allow investors to trade one share at a time rather than in board lots of 100.

Why We Need Anchor Warehouse Service Providers For Commexes?
Kushankur Dey – The Hindu Business Line

Despite the importance given to physical delivery in the exchange-traded forward or futures markets, commodity exchanges are yet to streamline their delivery process. Most of the contracts are cash-settled, while a fraction of cumulative open interests (in buy or sell a position) are settled physically.

Private Markets

NCDEX Commissions Survey To Gauge Customers’ Mood
Business Standard

NCDEX has appointed Pune-based Grassroots, a strategic consulting firm, to conduct a survey on the expectations of customers.

U.S. Announces Third Bitcoin Auction
Sydney Ember – NY Times

The US Marshals Service announced on Wednesday that it would auction 50,000 Bitcoins, worth nearly $12 million, seized in connection with the online marketplace Silk Road.

The Bitcoin auction, to be held on March 5, comes more than two months after the service’s second Bitcoin auction in December, when it also sold 50,000 Bitcoins.

PLY: In June last year the US Marshals Service organized an auction for a cache of bitcoins worth USD 17.4 mln when the price of BTC was hovering around USD 560 whereas today it has more than halved to around 230 dollars…

Dividend News

DB1‘s Executive Board is proposing a stable dividend of €2.10 per share for financial year 2014 (2013: €2.10). This proposal still requires formal approval by DB1’s Supervisory Board, which has already expressed its support, and by DB1’s shareholders at the AGM on 13 May 2015.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX is off 3%, FTIL down 2%, of coherent resolution to the NSEL affair, unsurprisingly we once again have no news…

Technology

TMX Datalinx To Become Global Distributor Of Wall Street Horizon’s Data Products
BUSINESS WIRE

TMX Datalinx and Wall Street Horizon announced an agreement under which TMX Datalinx will become a global distributor of Wall Street Horizon’s data products.

Chilton: Electronic Trading Is Boon For Marketplace
Bart Chilton – Online Athens

PLY: Former Commissioner Chilton reminisces on pits and looks forward to more digital markets…

Security Standard Proposed For Bitcoin Exchanges And Wallets
Stan Higgins – CoinDesk

A group composed of developers and security professionals has proposed a set of rules aimed at standardizing security protocols used by companies that handle or store digital currencies for their clients.

The proposal, created by the Cryptocurrency Certification Consortium (C4) and formally unveiled on 11th February during the DevCore bitcoin development conference in Boston, Massachusetts, aims to provide an industry-level standard by which exchanges and wallet providers can operate.

Products

BME Launches Securities Solutions (subscription)
Marina Daras – Waters Technology

BME expanded its post-trade, clearing and depository services and launched BME Securities Solutions ahead of the Spanish Market Reform and Target 2 Securities (T2S) implementation.

EEX ‘Cap’ Futures May Forestall German Power-Capacity Market
Weixin Zha & Rachel Morison – Bloomberg

New German electricity futures that guard against short-term price swings may eliminate the need for a power-capacity market, according to EEX.

The contracts would allow renewable generators in Germany to buy protection from losses when output from wind and solar energy is less than forecast, Fossil plant operators that sell the futures get a payment for staying online as backup power without state compensation. The contracts may start this summer depending on demand.

Indexes

STOXX Ltd. Expands Smart-Beta Offering With STOXX Sharpe Ratio Index Family – STOXX Europe Sharpe Ratio 50 Index Licensed To JP Morgan
MondoVisione

Thomson Reuters Expands Equity Index Series With Globally Listed Infrastructure Indices
MondoVisione

BME Expands Its IBEX 35 Index Family – New Indices Will Be Calculated & Disseminated In Real Time As Of 10th March
MondoVisione

BSE To Allow DVRs Into Main Benchmark Indices
Reuters

S&P BSE Indices, the index provider for BSE, said it would allow the inclusion of differential voting rights shares (DVRs) in the main benchmark indices.

Career Paths

trueEX, the first DCM for IRS, announced the appointment of Saro Jahani as Chief Information Officer (CIO). Jahani joins trueEX from Direct Edge.

CFTC Commissioner Sharon Y. Bowen announced the members of the CFTC’s Market Risk Advisory Committee (MRAC). Commissioner Bowen is the sponsor of this advisory committee.

Dr. Anat Admati, Better Markets, Representative
Robert Anderson, Committee of Chief Risk Officers, Executive Director
Gerald Beeson, Citadel, COO & CFO
David Burlage, CoBank, CFO
Scott L. Flood, Citi’s Institutional Client Group, MD
Andrew Gray, DTCC, MD
Bill Hale, Cargill, Export Grain Manager
Michael Hennesy, Federal Home Loan Banks, VP, Treasury and Capital Markets
Jerry Jeske, Mercuria Energy, Group Chief Compliance Counsel
Nathan Jenner, Bloomberg SEF LLC, COO, FICC E-Trading
Thomas A. Kloet, Elmhurst College, Representative
Sebastian Koeling, Optiver US, CEO
Clifford M. Lewis, Eurex Clearing, Independent Director
Dr. Andrew W. Lo, MIT’s Laboratory for Financial Engineering, Director
Glen Mackey, NRG Energy, Chief Risk Officer
Dennis McLaughlin, LCH.Clearnet, Group Chief Risk Officer
Susan McLaughlin, Federal Reserve Bank of New York, SVP
Richard Miller, Prudential Global Funding, General Counsel
Michael Modlock, TriOptima, Head of TriReduce North America
John Nixon, Americas for ICAP, Group Executive Director
Susan O’Flynn, Morgan Stanley, MD and Global Head of CCP Strategy, Governance and Optimization
Lee Olesky, Tradeweb, CEO
Angela Patel, Putnam Investments, SVP
Edward Pla, UBS Investment Bank, MD, Head of Clearing and Execution
Emily Portney, JP Morgan, Global Head of Agency Clearing, Collateral Management and Execution
Dr. Marcus Stanley, Americans for Financial Reform, Policy Director
Kim Taylor, CME Group, President, Global Operations, Technology and Risk
Charles Vice, Intercontinental Exchange, President and COO
Kristen Walters, BlackRock, Global COO of Risk and Quantitative Analysis Group
Rana Yared, Goldman Sachs, MD
Luke Zubrod, Chatham Financial, Director of Risk and Regulatory Advisory Services

PLY: Good to see Tom Kloet on this committee post his stint as TMX CEO while there is some heft here with excellent thinkers such as Lee Olesky. John Nixon and Cliff Lewis are amongst a wealth of knowledge on the panel.

Financial Calendar

Today

ESMA open hearing in Paris on the issues set out in its Consultation Paper on MiFID II/MiFIR published in December 2014
SEC roundtable to explore ways to improve the proxy voting process – see agenda here.

Tomorrow

Record date TMX $0.40 dividend

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

Share Notes

ITG CEO Robert C. Gasser sold 9,100 shares Tuesday, February 17th at an average price of $22.71 (bargain $206,661.00). He now owns 318,142 shares.

Analyst Notes

Credit Suisse Set A $95.00 Target Price On CME – “Hold” Rating

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

All Analysts, Banks and Brokers are welcome to contribute to this section.

Other stories

Sustainable Stock Exchanges – A Conversation With Nasdaq Vice-Chairman: Sandy Frucher
cfi

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