January 12 2016

elb2Please email if you want to take advantage before the $120 subscription rate increases to $300 for EI Premium in two day’s time. Happy to invoice in USD, Euro, GBP. It’s very gratifying to have so many compliments paid on renewal too – a particular word of thanks to our very first Premium subscriber who has paid the next three years in advance as a token of his appreciation – Thank you one and all!

Today, in Exchange Invest Daily, EBRD buys 5.2% of Zagreb SE, BSE & CMC Markets closer to IPO, it’s the new normal in China (crisis blah blah/pitchforks/to circuit break or not to circuit break, oh just go for total control…) while Neil Crammond provokes thought once more on the market making / market abuse nexus. Carsten Kengeter shaking up the dysfunctional comms functions at DB1 is welcome news as he seeks to revive the sleeping giant while Markit makes a neat acquisition, Boerse Stuttgart subsidiary NGM expands into Denmark and NASDAQ realise they don’t have the reach to make forex work from scratch at this time. Happy scrolling, here’s the pith:

Public Markets

China U-Turn Stokes Circuit Breaker Debate (subscription)

Philip Stafford & Gabriel Wildau – Financial Times

China’s short lived experiment in trying to mitigate wild equity market swings has reignited a broader debate over whether the use of such circuit breakers can help restore calm or merely encourages greater volatility.

China’s Cabinet To Have Greater Financial Supervision Role

Benjamin Kang Lim – Reuters

China’s cabinet is set to take on a bigger role in overseeing financial markets, as perceived missteps by existing regulators fuel concerns globally that Beijing may lose its grip on economic policy with growth at its slowest in a quarter of a century.

PLY: When in doubt induce more control, ah yes that always helps the free thinking investment community gain confidence…


Sebi Allows Defunct Commodity Exchanges To Exit From Bourse Biz


Sebi, in a circular, also said national commodity bourses will have to continuously meet the turnover criteria of Rs 1,000 crore (USD 150 mln) per annum. QV Premium: Indian Exchanges Shutdown – Brief.


SGX Seeks Feedback On Proposed Amendments To Align Listing Rules With Companies Act


SGX Reviewing Quarterly Financial Reporting Rule

Jonathan Burgos – Bloomberg

SGX is reviewing a 13-year-old rule requiring listed companies to provide quarterly financial reports in light of moves by other regulatory jurisdictions including the U.K. to drop the practice.


Market Making Or Manipulation?

Neil Crammond – Linkedin Pulse

Events last week have asked the market a serious question. Do our  regulators have the respect or trading knowledge to understand market making from manipulation ?

PLY: As always thought provoking analysis from Neil Crammond who notes how one fudge layered on another (and another and another…) only leads to confusion amidst grey areas and ultimately an opportunity for the regulators to flex their muscles in front of their political masters and claim they have unearthed a conspiracy of bad practice when the entire blob has been semi-deliberately looking the wrong way for years in the first place…


Leave Sympathy Aside For Brokers In Libor Case, Prosecutor Says

Liam Vaughan – Bloomberg

Jurors in the case of six former brokers accused of helping Tom Hayes rig Libor were told to disregard any sympathy they may have for the defendants as prosecutors wrapped up their arguments in the three-month-old trial.

PLY: UK Prosecutors clearly hope drone jurors will be deployed soon for such cases.

Private Markets

EBRD Acquires 5.2% Of ZSE


EBRD acquired through a capital increase 5.2% stake in the Zagreb SE (ZSE) (press release).

In early December last year, ZSE increased the capital in two rounds 14.9 million. The EBRD took part in the second round of recapitalization by entering 2.400 new shares at a price of 2,500 kuna, or the total amount of 6 million kuna (USD 855k). QV Premium: Exchange Deals Brief 2.

PLY: A useful fillip for Ivana Gazic as the takeover of Ljubljana completes and the EBRD adds a shareholding to its previous imprimatur of assistance for the marketplace.


BSE Inches Closer To An IPO; But Alas, What Timing!

Mobis Philipose – Livemint

BSE investors will rue the delay in the listing process. In recent years, BSE’s competitive position has weakened, and valuations may take a hit.


CMC Markets Poised To Decide On IPO (subscription)

Arash Massoudi, Martin Arnold & Harriet Agnew – Financial Times

CMC Markets, a spread-betting company founded by City of London tycoon Peter Cruddas, is set to decide as soon as Tuesday whether to launch an initial public offering that would value the company at as much as £1bn.


Boerse Stuttgart Subsidiary Expands Into Denmark


Following its market entry in Sweden, Finland and Norway Boerse Stuttgart subsidiary Nordic Growth Market (NGM) introduces securitised derivatives trading in Denmark on 11 January 2016.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL flat to slightly off.


Markit To Acquire Loan/SERV Service


PLY: Interesting deal, all helps add content in Markit’s sweet spot of tricky to value / process / slightly off the run products.


PGGM & Euronext Sign Up For Corporate Access Platform (subscription)

Mark Cobley – Financial News

One of Europe’s biggest pension fund managers, and one of its biggest exchange operators, are the latest to sign up to a new technology service offering “unconflicted” access to companies’ management teams by cutting banks out of the loop.


TriOptima Launches triResolve Margin, An Automated End-To-End Margin Processing Solution


PLY: Believing TriOptima can do no wrong is not mandatory but it does feel like the right approach.


Optiver Signs Multi-Year Deal For Torstone’s Inferno Sub-Ledger


PLY: Inferno conjures up out of control flames which burn everything in sight, this doesn’t strike me as a sensible brand name for a system which supposedly reconciles transactions etc.


Phishing In The Liquidity Pools Of The Capital Markets (subscription)

Max Bowie – Waters Technology

In 2013, 53% of exchanges reported experiencing a cyber-attack, and Max would be shocked if that number has not already reached 100%.


Nasdaq Suspends Currency-Trading Plans While Rivals Race Ahead

John Detrixhe – Bloomberg

Nasdaq has put its FX ambitions on hold because of a lack of demand from customers, even as its rivals spent about $1.2 billion last year on platforms to trade the world’s biggest asset class.

PLY: Clearly nothing wrong in admitting defeat ahead of a trading launch, although why the same cannot be applied to the NASDAQ brand damaging NLX will clearly be the first thing most readers say if I do not include that comment here… Anyway it was only in August last year, that Nasdaq announced its plans to launch a platform for fx trading but it seems events rather overtook the concept of building this from scratch with DB1 acquiring 360T, BATS buying Hotspot et al…


CME – First Trades Of Aluminum Japan Premium Futures


Career Paths

Matthias Fritton (49) will be appointed Senior GM of Deutsche Börse, with effect from 1 March 2016. His portfolio in this newly-created function will comprise the Corporate Communications, Marketing and Public Affairs area of the exchange group. Mr Fritton will report directly to CEO Carsten Kengeter.

Frank Klaas (57), MD, Global Public Affairs, and Rüdiger Assion (49), Director, Corporate Communications, will report directly to Matthias Fritton. The structure for the Group’s centralised marketing activities is yet to be developed.

Deutsche Börse announced further changes to its management structure, effective 1 January 2016: Dr Sabine Roeckl-Schmidt (50) was appointed MD, Human Resources; and Rüdiger Assion (49) was appointed MD, Communications.

PLY: DB1 has an image problem. The once world class comms team is broadly a ghost of its former self. There is no coherence to marketing so far as I can discern although I have to admit that it will be a bittersweet move if they replace DB1’s simply worst in class IR department with a coherent approach, as I have for years made quite a decent advisory increment helping investors understand what the DB1 IR team are actually trying to explain! It’s clear the future of DB1 now rests significantly on the shoulders of Carsten Kengeter with so many direct reports but then again he desperately needs to get DB1 out of its valuation trough arresting its slow slide away from the pointy end of the pyramid.

FN reports that DRW Trading’s Steven Hamilton is to join the staff of LSE’s CurveGlobal in its business development team, with responsibility for proprietary trading.

PLY: Curious readers will wonder whatever happened to Sandy Broderick becoming CEO? Bill Templer walked away after all… Is Curve entirely headless? It certainly appears broadly pointless.

FOW reports that Icap has parted company with Peter Best, COO of ICAP SEF.

Bloomberg reports that Paolo Nicolosi, the former co-head of BNP Paribas’s proprietary trading business in London, is joining Goldman Sachs Asset Management as a MD in its fixed income and currency unit.

Finance Magnates reports that Fidessa has appointed Ken Archer, a NED of the company, as Chairman of the Remuneration Committee.

Finance Magnates reports that Thomson Reuters Founders Share Company, part of the Thomson Reuters Group, has appointed global media executives Ronald G. Close & Kim Williams to its BoDs.

Julie M. Riewe, Co-Chief of the Enforcement Division’s Asset Management Unit of SEC, is planning to leave the agency (press release) next month.

FT reports that Andrew Lombara, JPMorgan bond trading chief, is departing along with treasury trader Chi Lee.

TABB Group hired Tom Lehrkinder and Callie Bost as research analysts to further strengthen their derivatives practice. Lehrkinder and Bost are based in New York and will focus on the global listed derivatives markets for TABB’s research and consulting practices, reporting to Andy Nybo, partner, global head of research and consulting.

Bloomberg reports that David Holcombe, who was head of Nasdaq’s FX initiative, has left the company. Phil Harris, previously Nasdaq’s head of FX initiatives and strategy, joined ICAP last year.

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

SEC Announces 2016 Examination Priorities




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