January 11 2016

elb2A sad day for bond markets the world over with the passing of the innovative securitisation issuer David Bowie, a man more famous for his popular music. Our condolences to one and all.

Thanks for the steady stream of new subscriptions to our Premium service – it all helps shore up the free Exchange Invest daily. If you aren’t already part of our inner circle, you have until Thursday to get in at the $120 rate for 3 years, thereafter it’s $300 from Friday per individual subscription…

If you happen to be in Malta at the end of the month, you can catch one of my briefings. It’s a rare public session by me, organised by the JCI hosted by Enterprise Malta. See the details here, all welcome, looking at FinTech.

Today in Exchange Invest, China is in meltdown, even if the markets recover soon, the system may not be able to find enough duct tape to patch the Communist meets capital allocation model back together.

Public Markets

Regulatory OK Of PDS Takeover Within Sight

Business World Online

Philippine SE (PSE) is confident it can comply with requirements of SEC within the extended deadline approved by the corporate regulator in order to finally proceed with the long-delayed consolidation of the country’s equity and fixed-income exchanges. QV Premium: PSE – PDEx Merger Brief.

PLY: Frankly we just want this story over with. Nobody so far emerges well from this soap opera.

 

The Man Behind China’s Circuit Breaker Gets Grilled (subscription)

Lingling Wei – Wall Street Journal

China Market Tsar In Spotlight Amid Stock Market Turmoil

Matthew Miller & Shu Zhang – Reuters

At an emergency meeting convened by China’s cabinet Thursday, the country’s top securities regulator, Xiao Gang, was in the hot seat.

China’s Stock Market Is Hardly Free With Circuit Breakers Gone

Adam Haigh – Bloomberg

A 10% daily limit on single stock moves and a rule preventing investors from buying and selling the same shares in a day remain in force.

 

CSRC Says Will Approve IPOs At A ‘Rational’ Pace To Ease Pressure On Market

Reuters

 

Intervention By Beijing Is Worsening China’s Market Woes (subscription)

Greg Ip & Bob Davis – Wall Street Journal

PLY: The Chinese wobbles will continue until a total meltdown which may be before or after the realisation that Canute Markets Inc was never successful, even in its final stages as a very aggressive low latency enterprise.

 

FIA Kicks Off New Year As Single, Global Organization

MondoVisione

FAO: As announced in November last year.

PLY: Welcome to One big broad church of futures brokers. Still doubt I can justify a trip to the rats’ mouth, alas.

 

Upstart IEX Exchanges Blows With Small Investors Over HFT

John Aidan Byrne – NY Post

The Flash Boys may have a Flash Crash coming. The national heroes of mom-and-pop investors everywhere — as well as the subjects of an American runaway best-seller — have run into big trouble.

They are facing public humiliation stemming from “Flash Boys” hero Brad Katsuyama’s upstart IEX Group, with its grandiose plan to be a groundbreaking stock exchange to combat predatory HFT.

“Demonizing HFT worked well for a book tour, but if ‘IEX: The Exchange’ is the sequel, it’s a lot different story,” Bill Harts, CEO of Modern Markets Initiative, the advocacy group for HFT, told The Post.

PLY: Typically tabloid fodder fuelled by the MMI, a group which sees speed as the all-consuming God-given right of its members and appears to exhibit a stunningly blinkered view of the big picture. Wall Street will be humiliated if the IEX plan is vetoed and MMI would be better off calculating the risks holistically.

 

Securities Lending Unsettles Regulators (subscription)

Chris Flood – Financial Times

Securities lending is an area of growing concern to global regulators who are worried about potential risks to financial market stability.

PLY: Given lack of securities lending leads to illiquidity & given how much more lending is needed to secure a safe post OTC derivatives landscape, isn’t this worry misplaced? Then again regulators still have not understood (e.g. Greece) that when you ban, say, short selling, that just convinces the markets a panic is afoot.

Private Markets

Three Stock Exchanges To Merge To Form PSX Today

Pakistan Today

The three stock exchanges of Karachi, Lahore and Islamabad will formally merge today (Monday) to become the Pakistan SE (PSX). QV Premium: Pakistan Exchanges Merger Brief.

 

Thai Bourse Launches Investment Service & Learning Hub At New Head Office

MondoVisione

 

Nadex Plans To Offer More Free Trading Days Under Incentive Program

Maria Nikolova – LeapRate

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 1%, FTIL small up. No news, although the libel actions before Christmas appear to have backfired on FTIL as there has been a crop of Jignesh Shah Twitter parody accounts ridiculing the man behind NSEL in recent weeks with more being added almost daily…

Technology

CFTC To Discuss Blockchain Tech During Public Hearing

Stan Higgins – CoinDesk

CFTC will discuss the application of blockchain technology in derivatives markets during a meeting of its Technology Advisory Committee later this month.

Products

NLX To Add European Options For Testing (subscription)

Alice Attwood – FOW

NLX said it will relist its bund, bobl and schatz options in its test environment on Monday January 11. QV Premium: NLX Brief.

PLY: Uncle Google seems to reckon they did a heady 1460-ish lots Friday in futures – I think we can safely suggest the “we have 10% share” hype in at least one product during 2014 is now long since extinct as NLX became little more than a cash drain in the hope of a means to revenue (perhaps the smash & grab attempts to crowbar open clearing by the ‘superstriver’ exchanges  LSE & NASDAQ who learnt there was life beyond cash products a tad too late). In my experience, options markets thrive on the back of either significant futures liquidity or a market making system which allows people to make markets ‘upstairs’ then print on the exchange.

 

SET To Launch Mutual Fund Trading Pool Early Next Year

Darana Chudasri – Bangkok Post

The Stock Exchange of Thailand (SET) plans to introduce a trading platform that pools all mutual funds in one place by early 2017.

 

Regulation On Placement & Circulation Of Derivatives Enters Into Force In Azerbaijan

ABC

Financial Calendar

12.01 – CME $2.90 variable dividend payment

12.01 – WSE EGM

13.01 – Oslo Børs: Merkur Market Go-Live

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

Other stories

Eight US Regulatory Predictions For 2016 (subscription)

Annette L. Nazareth & Gabriel D. Rosenberg – Financial Times

Last year we offered our 10 regulatory reform predictions for 2015, which turned into a busy year in the financial regulatory space. Here are our predictions for 2016.

 

EBRD Promotes Enhanced Corporate Governance Of Companies Listed On Borsa İstanbul – Bank Joins Forces With Turkish Capital Markets Board

MondoVisione

 

Building Resilience To Rebuild Trust – Opening Remarks By Michael Bodson, DTCC President & CEO

MondoVisione

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