January 04 2016

elb2Welcome and a very Happy, Peaceful & Prosperous New Year to you and yours. Here’s to a very profitable and stimulating 2016 – it certainly looks promising as I alluded to before the festive season.

Today’s bulletin updates the Christmas period. Tomorrow we’ll cover through to New Year and then Wednesday, perhaps somehow appropriately to mark Epiphany, Exchange Invest Daily will be back to covering the overnight news in the world of market structure.

Lots to catch up on and one housekeeping announcement, given how much you receive free daily from our newsletter, the cost of the Premium Service to new subscribers will go up on January 14th to $300 per annum. It’s still cheap at this price but if you want to get in to beat the increase, please email and we’ll sort out the subscription at the original rate. As a reward to those fine souls who have already faithfully supported EI with hard cash, existing paid up subscribers as of January 13th midnight CET will continue to receive EI at the same $120 rate for the next 3 years.

So here’s a first installment of what you might have missed while shopping for pressies, consuming wondrous comestibles in hearty quantities or watching repeats of Top Gear & James Bond…

Today’s Christmas review bulletin includes a hyper pithy NYT broken markets article while Hillary Clinton may have – inadvertently? – one quasi-logical approach to policy. BATS has filed for an IPO whereas IEX is still in application phase for another 90 days..and there’s more, such as Elliott Piggott leaving ICE’s acquisition Trayport plus the relaunch of the US NSE & other new markets. Happy scrolling:)

Public Markets

LSE Advances On ETF Market With XTF Acquisition

Finextra

LSE has acquired XTF (press release), a US-based provider of analytics and ratings data for the fast-growing ETF asset class.

 

Derivatives Regulation Spat Nears Transatlantic Detente (subscription)

Barney Jopson & Philip Stafford – Financial Times

A transatlantic dispute that has left a glaring gap in global financial regulation is on course to be resolved in 2016 after the US signalled it was ready to end years of bickering and strike a compromise with Europe.

PLY: One lives in hope that the Transatlantic regulatory stasis will end with magnanimity all round and sensible progress. True, that may be tantamount to launching pigs from aircraft carriers and expecting gravity to be thwarted…

 

PSE Gets More Time To Fix Merger Issues

Kristyn Nika M. Lazo – Manila Times

SEC has extended the Philippine SE’s (PSE) deadline to respond to the regulator’s concerns about the planned merger with the Philippine Dealing Systems (PDS).

 

Clear Business Plan Hinders Planned PSE-PDEx Merger

Madelaine B. Miraflor – Manila Bulletin

SEC will deny the merger of the country’s bond and stock bourses should the Philippine SE (PSE) fail anew to submit a clear business plan.

QV Premium: PSE – PDEx Merger Brief.

PLY: The credibility of the markets in the Philippines is somewhat strained by this whole, rather remarkable affair. I remain convinced the whole thing is a feint to create a plotline for a classic South American-style soap opera.

 

GFI Group Announces New Consent Solicitation With Respect To GFI Group 8.375% Senior Notes Due 2018

MondoVisione

 

Sebi Brings In Caveat On Stock Exchange Listing

Jayshree P Upadhyay – Business Standard

Entities with 15% stake in an exchange can’t list on it; those with such stakes to be referred to as associates.

PLY: More rather pointless rules bred within the SEBI machine.

 

Commodity Dealers In EU To Get Longer Capital Reprieve

Huw Jones – Reuters

The EU plans to extend commodity dealers’ exemption from the full panoply of capital requirements faced by banks for another three years to 2020.

 

Commodity Exchanges Eye Revival Under Sebi After Modest 2015

The Hindu

MCX retained a major market share of over 85% in the commodity futures market, followed by NCDEX and NMCE.

 

India – Commodity Brokerage Consolidation

Dilip Kumar Jha – Business Standard

 

EEX – Moving Into The Major League

FTSE Global Markets

Set against a dynamic business backdrop in its own backyard, the European Energy Exchange (EEX) has adopted a confident and bold strategy to establish its global footprint within the exchange industry.

 

HKEx Issues Directive Cracking Down On Backdoor Listings

EJ Insight

 

Lessons Of Wall Street’s August Turmoil (subscription)

Nicole Bullock – Financial Times

 

Spoofing Went Mainstream In 2015

Matthew Leising – Bloomberg

PLY: Or at least the mainstream started listening to the likes of Neil Crammond (see his latest here) who have been pointing out the deficiencies of the exchanges and others including regulators, for years.

 

One Way To Unrig Stock Trading

Jonathan Macey & David Swensen – NY Times

PLY: Brutal but brilliant. The must read from this bulletin.

 

China & Clinton Agree: Traders Should Pay For Canceled Orders

Eduard Gismatullin & Sam Mamudi – Bloomberg

PLY: Clearly a massive danger in 2016 is the election of yet more fiscally illiterate incompetents such as Hillary Clinton (yes, I know, “credible opponent” I get that gist). However, perhaps by pure luck, her reasoning here may be astute. Certainly HFT needs to pay for excessive use of trading bandwidth in the way it used to be the responsibility of the pit booths/traders themselves…whereas in an electronic world this has crept into the collective responsibility leaving the cost burden on all exchange members (and that’s before we get to the egregiously rapine behaviour of an ugly minority of HFT traders).

 

ESMA Publishes Responses To The Consultation On Indirect Clearing Under EMIR & MIFIR

MondoVisione

 

Esma Industry Responses Expose Deep Divisions Over Indirect Clearing (subscription)

James Rundle – Financial News

 

ESMA Issues MiFID II Guidelines On Cross-Selling Practices

MondoVisione

 

ESMA Consults On Transaction Reporting, Reference Data, Record-Keeping & Clock Synchronisation Under MIFIR

MondoVisione

 

LME Cajoling Warehouses Over Rental Hikes For 2016

Eric Onstad – Reuters

 

SEC Releases Report On Aug. 24 Stock Market Volatility

Reuters

 

NYSE Arca Rules Partly Responsible For August ETF Rout, SEC Says

David Michaels – Bloomberg

PLY: A classic case of treading the tightrope between hell-fire and damnation. Readers will be unsurprised to discover that arbitrary limits placed as a result of a previous kerfuffle didn’t work well when the crisis itself morphed slightly in its next incarnation. Typical problem of regulation naturally, especially in a world where derisking is seen as essential by regulators but delivered in an arbitrary manner bereft of more holistic perspective.

 

CFTC Issues Order Of Exemption From Registration As A Derivatives Clearing Organization To OTC Clearing Hong Kong Limited

MondoVisione

 

HKEx: New Circuit Breaker To Apply To Stock Connect’s Northbound Trading

MondoVisione

Private Markets

BATS IPO On The Way

LeapRate

Bats’ IPO Filing: Ten Key Takeaways (subscription)

Tim Cave & James Rundle – Financial News

Bats has officially filed for an IPO with US regulators, providing a chance for employees, rivals, users (and financial journalists) to pore over previously undisclosed details about the 10-year-old exchange operator.

 

Another Delay For An Upstart Stock Exchange

Gretchen Morgenson – NY Times

Would-Be Exchange IEX Says It Gave SEC 90 Extra Days To Decide Its Fate

John McCrank – Reuters

It is extremely unusual for a company to grant a regulator more time to make a decision.

PLY: However this is no ordinary application and the Wall Street critics remain incredibly exposed by dint of their statements – arguable within the precepts of dire regulations like Reg NMS but entirely inconsistent in the broader court of public opinion where the public has considerable reason to feel the market is being rigged against the retail investor. Hopefully by spring we will see the sub 350 millionths of a second Titanic deckchair arranging by some vested interests give way to an open market spring.

 

NSX Is Approved By The SEC To Re-Launch Trading Operations – NSX Plan For Phased Roll-Out

MondoVisione

National SE Relaunches, Aims To Shake Up U.S. Industry

John McCrank – Reuters

The National Stock Exchange relaunched with a low-cost model its new management says will challenge current industry practices and could save U.S. investors billions if adopted market-wide.

 

BSE Forms Advisory Group To Develop Start-Up Listing Platform

dna

 

Stock Exchange: Why Wilmington?

Xerxes Wilson & Karl Baker – The News Journal

Delaware Board of Trade officials say they have $7 million of the $8 million needed to be operational in 2016.

 

Will New Brazilian Stock Exchange Do What Bovespa Couldn’t?

Rhonda Schaffler – The Street

PLY: Optimism from Alan Gandelman of ATS Brasil as he notes amongst other points, that Brazil has a puny 400,000 retail investors (0.2% of 200 million people or less than a quarter of sub 40 million citizen Poland’s tally for example).

 

HKMEX Legal Woes Spiral

Imogene Wong – The Standard

Former Executive Council member Barry Cheung Chun-yuen, who chaired the defunct Hong Kong Mercantile Exchange (HKMEx), is being sued by a mainland businessman over a HK$20 million (USD 2.6 mln) loan and interest. Wang Xiaopei launched the lawsuit in High Court against New Effort Holdings, a company fully owned by Cheung, as well as a law firm named Chong & Partners.

PLY: We’d almost forgotten about HKMEX but the legacy of its apparently sensationally spendthrift ways continues to haunt former Chairman Barry Cheung.

 

I-T Officials Raid Traders To Probe Chana Price Rigging

Shishir Arya & Partha Sinha – TOI

The income tax department raided traders dealing in pulses, especially chana (chickpea), in Delhi and Mumbai, on the basis of inputs about hoarding and other financial irregularities in the trade.

 

Neptune Continues To Expand

MondoVisione

PLY: Pre-trade bond platform growth.

 

Lesotho To Establish First Stock Exchange

StarAfrica

The Senior Marketing Developer of the Central Bank of Lesotho (CBL) Motebang Mphi says Lesotho is poised to establish its first stock exchange on 22 January 2016. Once the Maseru Securities Exchange (MSE), is established, the CBL will regulate the market.

PLY: Welcome Lesotho to the world of markets – this is the age of the exchange.

 

Cross-Border Trading Gets Green Light

Ted Chen – Taipei Times

The Financial Supervisory Commission gave its approval for Taiwan SE to set up a subsidiary to oversee cross-border equity transactions and to promote the trading of international stocks.

 

EPEX SPOT To Report Trading Data To ElCom

MondoVisione

 

Blockchain Investor Coinsilium Begins Trading on ISDX Following Seedrs Initiative

Samantha Hurst – Crowdfund Insider

Special Section: FTI, NSEL, India at the Crossroads

Centre Seeks More Time To Pass FTIL-NSEL Final Merger Order

Ram Sahgal – The Economic Times

The government has sought yet another extension from the Bombay High Court (HC) for passing a final order to merge NSEL with FTIL.

QV Premium: NSEL-FTIL Merger Brief, NSEL Scandal Brief – Part 16.

Technology

Market Police Deploy New Weapons Against Spoofers

Edward Robinson & John Detrixhe – Bloomberg

NYSE is the latest to get software to detect wrongdoers. Surveillance firms took in $450 million in ’15 and rising.

PLY: Good to see, although the vast majority of exchanges (certainly divisions of NYSE, such as LIFFE) could detect such processes last century. With this update, NYSE is clearly finely attuned to the anger of Main Street investors on the spoofing issue, hence adding a state of the art Cinnober system is a welcome upgrade for Wall Street.

 

Abu Dhabi Securities Exchange To Upgrade SMARTS Market Surveillance Technology

MondoVisione

 

Nasdaq Linq Enables First-Ever Private Securities Issuance Documented With Blockchain Technology – Transaction By Chain.com Marks Significant ‘Proof Of Concept’ & Major Step Forward In Use Of Blockchain – Blockchain Holds Potential For 99% Reduced Settlement Time & Risk Exposure In Capital Markets

MondoVisione

PLY: Good move by NASDAQ & good to see them echoing my white paper of last November: “Towards A Real Time Market” in discussing time savings etc.

 

ASX Eyes ‘Blockchain’ For Risk Management Of Market Trades (subscription)

Philip Stafford – Financial Times

PLY: The gravity defying illogic of ASX continues apace, as the Dickensian monopolist seeks to have the world’s first totalitarian centralised variant on the ledgers whose main attractions others perceive to be their decentralised nature. Such oxymorons barely concern the fevered minds of ASX management who see no contradiction in free markets being centralised in one franchise – well, as long as it’s their dominant entity anyway. Whatever can we expect next from Sydney’s haven of anti-competition, a workhouse for destitute investment bankers to pitch deals for gruel perhaps?

Products

Euronext Still To Keep Only One Wheat Contract, May Pick No. 2

Reuters

Euronext still plans to retain only one wheat futures contract in the medium term, but could choose its older No. 2 version in the face of minimal liquidity in its recently launched No. 3 contract.

 

HKEx To Extend Rebate Scheme For RMB Currency Futures

LeapRate

 

Barclays `Last Look’ Fine Inspires Currency Venue Rule Change

John Detrixhe – Bloomberg

PLY: Unless I see something mega-pithy, this will be the ‘last look’ for last look articles…

 

MOEX Launches Grain Trading

Mike Fox – LeapRate

National Mercantile Exchange, part of MOEX, launched on-exchange trading in grain. NCC Clearing Bank will act as the central counterparty. National Logistic Company will act as logistics provider, alongside surveyor companies. Accredited elevators will provide grain storage solutions.

 

LCH.Clearnet Eliminates Over $100 Trillion In Notional In 12 Months

MondoVisione

 

Industry Steering Committee Publishes Playbook For Implementing T+2 Settlement Cycle In U.S. By The End Of 3Q 2017

MondoVisione

PLY: Better than nothing.

Indexes

JPX: Start Of Trading Of TAIFEX TOPIX Futures

MondoVisione

 

JPX: Launch Of S&P/JPX Dividend Aristocrats Index

MondoVisione

 

Korea Exchange: KRW Launched KTOP 30, KOSPI 200 Sector Leverage, & Balanced Strategic Indices

MondoVisione

Career Paths

FOW reports that ICE has told the staff of Trayport their long-standing CEO Elliott Piggott has left the energy trading firm.

trend reports that Rovshan Allahverdiyev, Chairman of the board of Kapital Bank OJSC, has been elected new head of the Supervisory Board of Baku SE (BSE). Fuad Islamov, the general director of the IBA, has been elected member of the BSE Supervisory Board.

GlobalCapital reports that Diane Schueneman will step down from her roles as a member of ICAP’s Nomination, Audit, Risk and Remuneration Committees on December 31. She will also resign from her role as NED of ICAP Global Derivatives and ICAP SEF.

bdnews24 reports that Jiban Chandra Das, GM (finance and accounts) of Dhaka SE (DSE), has been dismissed.

Moneycontrol reports that (SEBI) has approved the appointment of three additional shareholder directors on the board of MCX:

Amit Goela, nominated by Rakesh Jhunjhunwala, who has a 4% stake

Madhu Vadera, nominated by reclusive investor Radhakishan Damani, who holds a 1.5% stake

RK Damani is considered by billionnaire Jhunjhunwala as his trading guru and the two are known to often buy into companies together.

Egypt’s Prime Minister issued a declaration for the renewal of Dr. Wagih Mostafa Amin Eltazi‘s contract as EGX Vice Chairman.

ESMA Vacancy Notice – Head Of Investors & Issuers Department (Deadline: 29/01/2016)

MondoVisione

Financial Calendar

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

Share Notes

Mandatory Notification Of Trades – Oslo Børs VPS Holding ASA

MondoVisione

In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has sold a total of 1741 shares. New holding is 9287 shares. Employees paid a share price of NOK 85.65 per share, but were allowed a discount of 20% on purchases up to NOK 625.

 

Mandatory Notification Of Trade – Oslo Børs VPS Holding ASA

MondoVisione

Christian Fredrik F. Kjøde, employee representative of the Oslo Børs board, has 28 December 2015 sold 4719 shares in Oslo Børs VPS Holding ASA at the price of NOK 87.50 per share.

Crowdfunding

IOSCO Publishes Statement On Regulation Of Crowdfunding

MondoVisione

IOSCO published a Statement on regulation of crowdfunding.

Other stories

UAE To Set Up Chinese Yuan Clearing Centre

Reuters

 

KRX Signs MoU With CBEEX*

MondoVisione

*China Beijing Environment Exchange.

 

Taipei Exchange MOU With Oman’s Muscat Securities Market

Focus Taiwan

Taipei Exchange (TPEx) signed a MOU with Oman’s Muscat Securities Market to strengthen cooperation between SMEs in the two countries.

 

UK Serious Fraud Office: Tom Hayes – Appeal

MondoVisione

Tom Hayes’ conviction was upheld. His sentence was reduced from a total of 14 years to 11 years. Please see the full Judgment here.

PLY: I see Harry Wilson of The Times has some letters from Tom Hayes, they are also free to read here.

 

CFTC Approves Final Rule On Records Of Commodity Interest & Related Cash Or Forward Transactions

MondoVisione

Statement Of Support Of CFTC Chairman Timothy Massad Final Rule

MondoVisione

Statement Of CFTC Commissioner J. Christopher Giancarlo

MondoVisione

 

CFTC Staff Issues Request For Comment On Draft Technical Specifications For Certain Swap Data Elements

MondoVisione

Statement Of CFTC Chairman Timothy Massad: Request For Comment, Draft Technical Specifications For Certain Swap Data Elements

MondoVisione

 

Commissioner Aguilar: Looking Back At The SEC’s Transformation (& A Few Other Things)

MondoVisione

 

CFTC & HK SFC Sign MOU To Enhance Supervision Of Cross-Border Regulated Entities

MondoVisione

 

FINRA Sanctions Barclays Capital, Inc. $13.75 Million For Unsuitable Mutual Fund Transactions & Related Supervisory Failures

MondoVisione

PLY: The sting in the tail – once again Barclays cops a fine…well it would have been odd to have a multi-day review and not see them being fined, I suppose.

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