FEBRUARY 6 2017

Welcome to Exchange Invest, the unique market structure daily, where it’s Issue 926 which correlates to a Porsche design study for an offshore vehicle dating back to 1973…sometime before Zuffenhausen actually entered the “Chelsea Tractor” 4wd market.

Of course the macro parish news is that Dodd Frank appears to qualify for a living will all of its own thanks to the latest of President Trump’s executive orders. Maintaining transparency and clearing quality is good, reducing the draft regulatory drag of the excessive and authoritarian, one could say fundamentally anti-American precepts of the other umpteen thousand pages is good news for markets and the parish, albeit a hammer blow to the EU which is going to find it difficult to suddenly deal with flowing precisely the opposite way to its longstanding interventionist approach.

In Today’s Exchange Invest

The Merger of Equal Desperation has been further endangered by the brutally frank “Frankfurt HQ or bust” remarks by Hesse’s finance minister while more and more media sources find the dates tricky to align with good corporate practice which would allay the concerns over insider dealing by the DB1 boss, Mr Carcrash himself.

There’s a new non-parish CEO for NSE replacing Chitra Ramkrishna while the Bombay SE Chairman is a tad ebullient post IPO. Meanwhile BM&FBovespa are considering sharing some of the Cetip dividend with market users and much much more, it’s a bumper scroll today:

In BigWorld

It was the Superbowl last night. This is a sublime advertising festival so huge they hold a football game around it and a pop concert alongside it. I love the way Americans are so inventive.

Public Markets

Bursa Malaysia Announces RM193.6 Million Profit After Tax & Minority Interest (“Patami”) For The Financial Year Ended 31 December 2016
MondoVisiones

German Minister Calls For LSE- DB1 HQ In Frankfurt
Reuters

PLY: The merger has been chipped away at for logic ever since the originally rather misleading press release (CCP offsets a prima facie example of the cluelessness of the original preamble) but in recent days the chipping appears to be giving way to hammer blows and we haven’t got to EU antitrust yet.

This from the Hesse Finance Minister Thomas Schaefer, clarifies the situation but ought to be sufficient to kill the merger as now we have material change to the terms:

“The reasons for the headquarters being in Frankfurt are crystal clear…Those involved in London must recognize, also in their own interests, that it would not be a good idea to keep the plans as they are now…This might be legally complicated but where there’s a will, there’s a way.”

At least it’s good Minister Schaefer is clear. Thus we can abandon the previous faux bonhomie of a UK HQ with Frankfurt as a branch – that just isn’t something Hesse can stomach. Meanwhile the concept of a post Brexit Britain with its CCP clearing franchise and the London Stock Exchange name owned by and run from, Frankfurt doesn’t cohere with the notion of defending the UK’s admirable leadership as a financial centre.

Well, “The deal is set” one Xavier Rolet noted last week before Minister Schaefer’s intervention…

Deutsche Boerse , LSE To Offer Small Antitrust Concessions – Sources
Reuters UK

PLY: Sale of Clearnet, and not much else – thus assuring DB1-LSE of an egregious CCP monopoly position, apparently.

It Will Take A Heroic Effort To Rescue The LSE Takeover
Telegraph.co.uk
Spotlight Falls On DB1-LSE: Who Knew What, And When?
City A.M.

Börse Chairman’s Takeover Mystery
The Times (subscription)

…Subscribers to Exchange Invest Premium can also read: Does Insider Dealing Sink DB1-LSE?

SEC’s Interim Chief Itching To Overhaul Financial Rule Book
Northwest Arkansas Democrat-Gazette

A week after being named acting chairman of the Securities and Exchange Commission, Piwowar said in an interview that he might direct SEC staff to review regulations he thinks are too restrictive, which could be the first step toward changing them….
PLY: Piwowar remains acting Chairman until the confirmation of Jay Clayton and appears to be setting the SEC up to consider the deregulation agenda, including reviewing Reg NMS.

Brazil’s BM&FBovespa Mulls Sharing Cetip Cost Savings With Clients
Reuters

CME Group To Broaden Rules Against Wrongdoing After CFTC Request
Reuters

Bse IPO: 140 Years After Inception, Exchange Says Listing A New Beginning
Moneycontrol.com

PLY: Interview with the Chairman of BSE who is optimistic post the successful listing.

Private Markets

The Merits of a Chinese Owned Chicago Stock Exchange
Medium

PLY: Chicago SE Director Anthony Saliba weighs in on the merits to the Chinese takeover.

The First IPO Via Book Building System At Tehran Stock Exchange
MondoVisione

Palestine Exchange Launches English Version Of Disclosure System
Mubasher Info

PEX launched the English version of its disclosure system “IFSAH.”

Special Section: FTI, NSEL, India at the Crossroads

Nada news.

Technology

Chamber Of Digital Commerce Welcomes CME & TMX As Members
EconoTimes

PLY: Good to see CME and TMX signing up for the US top level blockchain trade association, albeit it’s slightly curious to see CME as members of this body when they are not members of fundamentally vital parish bodies such as FESE (particularly given CME’s significant European footprint).

Products

London Gold Traders To Open Vaults In Transparency Push
Financial Times

PLY: My initial reaction to this headline was: “You mean they might edge towards going paperless?”

ICEX To Launch Diamond Contracts Trading From April
Times of India

The Indian Commodity Exchange Limited (ICEX) is all set to debut the launch of the diamond contracts from April.

PLY SDiX, the Singapore Diamond Exchange is of course the pioneer in the field…

Market Participants Rely On Eurex FI Futures To Navigate Geopolitical Risks
EUREX

PLY: Not sure which products help navigate the tricky waters of insider dealing charges against the CEO of EUREX’s parent but doubtless somebody in product development is working on it.

Snap Is Minor Tech Nobility With A Royal Share Structure
Financial Times

PLY: A somewhat absurdly ponderous headline for what is a simply absurd share structure. Snapchat is a great tool, the stock looks like a sucky investment, given the share type being offered.

The Beginning Of The End Of Dual-Class Stocks
Crain’s Chicago Business

PLY: Dual share class stocks need to be abandoned.

Not Listing On Nyse To ‘Damage’ Saudi Aramco Share Sale
Anadolu Agency

PLY: Interesting, the worry that Aramco is just too big for Tadawul and really needs to be on the NYSE or similar.

As Bitcoin ETF Nears, Analysts Warn Of Trading Frenzy
Wall Street Journal

PLY: Interesting issue for ETF issuance – the same old liquidity chestnut in many ways but with new clothes.

Career Paths

Further to speculation published in Exchange Invest last Friday that he had emerged as the frontrunner, Vikram Limaye has been appointed the new CEO of NSE India (in a rapid process barely 2 months after Chitra Ramkrishna resigned), allowing the IPO process to kick off soon, subject of course to Sebi approval. He is a longstanding banker with little apparent direct parish experience and the first NSE boss from outside the original founding team.

Former FINRA boss Rick Ketchum has joined the board of MarketAxess.

Former NYMEX CEO Vinnie Viola, has been unable to convince the pentagon that his low latency trading company Virtu is not a weapon of mass destruction (or at least, something pertaining to his business interests presented a potential conflict of interest) and has withdrawn his name from consideration as Army Secretary under President Trump. “Secretary Mattis is disappointed but understands and respects Mr. Viola’s decision,” a Pentagon statement said.

Brian Winterflood: The Broker Who Has Helped Shape The City Over 60 Years, Including By Blocking …
City A.M.

PLY: Hailing a remarkable figure in the City of London.

Crowdfunding

Even The Robots Are Going Alternative
MoneyWeek

The Seattle-based firm is a “robo-adviser” (an automated online investment service); it invests in P2P lending and uses blockchain.

Other Stories

Book Excerpt: Revisiting The Beginnings Of The BSE Vs NSE Battle
Moneycontrol.com

FESE Response To ESMA Consultation On Package Transactions
FESE

ESMA Publishes 2017 Supervision Plan For CRAs, Trade Repositories & 3rd Country CCPs
ESMA

ESMA To Focus On Clearing Equivalence, Repositories
FOW magazine

Europe’s main financial regulator will focus on handling 21 pending requests for clearing house equivalence and supervision of trade repositories.
A bumper Monday edition gets the week off with a bang, have a good one and thanks as always for reading Exchange Invest.

Best wishes,

Patrick

Patrick L Young
Executive Director DV Advisors

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