JANUARY 13 2017


Exchange Invest issue 910 brings me to the first wondrous Porsche prototype I ever saw: The 2 litre 910 coupe owned by Ulsterman John L’Amie which finished 9th at the Brands Hatch 1000kms in 1970 amongst various epic privateer runs. Overall the 910 itself was a king of the European mountains (in bergspyder version) as well as a mainstay of international endurance events for many years.

In Video

It’s yours truly speaking about FinTech from Wroclaw, Poland in December – the speed is deliberately slow for non native English speakers but the message is a crunchy “Victory or Death” – enjoy!

In Today’s Exchange Invest

ASX hits problems with Blockchain as their Chess strategy falls foul of some elementary errors leads today’s fascinating cornucopia of stories which merit a scroll:

In BigWorld

In a clearly jet lagged state, Polish Foreign Minister Witold Waszczykowski has attracted derision after he inadvertently created a new nation. San Escobar is apparently supportive of Poland’s bid for a UN Security Council seat (what could possibly go wrong there with Poland’s prickly nationalist crypto-Communists sitting beside Russia?).

Apparently the Foreign Minister meant St Kitts & Nevis which in Spanish sounds…oh too much detail…

…What we parishioners really want to know is does San Escobar have a stock or commodity exchange?

Public Markets

Blockchain Option For ASX Clearing In Limbo
The Australian Financial Review

PLY: Tony Boyd notes “four months after the ASX started a consultation process to replace the CHESS post-trade processing platform, there is palpable anger among its stakeholders about its cavalier approach to the technology upgrade.”

An excellent article channeling the fury of ASX stakeholders at the “cavalier approach” of ASX to its customers and the monopoly in market infrastructure which this piece infers, it is not fit to hold, according to many angry customers, let alone those trying to compete with the totalitarian ASX machine like the sturdy warriors of Chi-X.

Instead of chasing rainbows, the ASX needs to stick to its knitting and do so cost effectively. Clients are being charged extravagantly to undertake expensive manual processes to clear ASX. There may be ramifications (through no fault of theirs) too for DAH along the line as clearly the ASX customers want a working, cost effective, heavily automated clearing system and ASX is not coherently proposing such a move it seems.

LSE Boerse Chiefs Travel To Meet Top German politician – Sources
Reuters UK

PLY: An away day to Wiesbaden and presumably no time to enjoy the airs… The merger of equal desperation seeks to get Hesse Premier Volker Bouffier onside through presumably the usual chicanery of M&A deals pushed by overly impetuous investment bankers – so expect that London HQ to be a charade, then…

Chicago’s Vast Exchanges Have Got Their Eyes On Retail FX customers: Massive M&A Deals Ahead
FinanceFeeds (blog)

PLY: A headline which broadly fails to live up to the article but included just for the record #FOMO-style.

Company In Focus: SGX Tries To Dual Its Way Out Of Trouble
Nikkei Asian Review
Singapore Bourse May Allow Classified Shares, Ease Reporting Rules
Nikkei Asian Review

PLY: The problem is SGX appears to be smacking of desperation currently and this is not good. Management needs to get a grip from the top down and stop what will be a huge fiasco if they enable dual shares.

Passive Rules All As Stock Exchanges Turn Into ETF exchanges
The Globe and Mail

ITG Paying $24 Million For Improper Handling Of ADRs
SEC

ICE Endex Receives CFTC Authorisation As Foreign Board Of Trade
The ICE

Moscow Eyes US Liquidity With CFTC Application
FOW magazine

MOEX has applied to the US derivatives regulator to be recognised as an equivalent foreign exchange.

PLY: Good move.

Private Markets

NSE’s 45% Stake Purchase In CAMS Under SEBI Scanner
Hindu Business Line

A 2013 deal wherein India’s largest bourse National Stock Exchange (NSE) bought a 45 per cent stake in Computer Age Management Systems…

PLY: Remarkable: further evidence of Sebi and NSE at loggerheads.

‘Volcker Rule’ Looms Over Exchange IPOs
Business Standard

PLY The whacky world of bumps in the carpet writ large.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Nada news.

Technology

LME Electronic Trading Resumes After Five-Hour Delay
Reuters

PLY: No word on what caused the problem. Don’t hold your breath on LME clarifying, given their reluctance to discuss quite where they may have lost money from an alleged internal fraud, let alone where they might have changed procedures to ensure it doesn’t happen again.

IPSX To House Data In Cloud Via GoldenSource
IBS Intelligence (blog) (subscription)

The International Property Securities Exchange (IPSX) has signed up for GoldenSource’s cloud enterprise data management platform.

PLY: Interesting, using this managed data solution in addition to Cinnober’s SaaS offering (“TESS”) as announced last month.

Products

NYSE Launches Smart Beta Index With Roger Ibbotson And Zebra Capital – The NYSE® Zebra EdgeTM Index Applies Renowned Economist’s Behavioral Finance Research Aiming To Capture Higher Returns With Lower Volatility
ICE

NCDEX Proposes Hybrid Options Trading
Business Standard

PLY: NCDEX is asking to create “Indian options” which are somewhere in between American and European exercize styles while Sebi has so far authorised European only.

Redwood To Launch Series Of Active Exchange Traded Funds On NEO
BusinessWire

NYSE Extends Lead In U.S. ETF Listings, Trading And AUM In 2016 – Market Quality And Liquidity Drove Continued Market Share Leadership
The ICE

Career Paths

Michael J. Osnato Jr., Chief Of Enforcement Division’s Complex Financial Instruments Unit, To Leave SEC
SEC

Crowdfunding

Why GoFundMe acquired CrowdRise
Fast Company

GoFundMe will also be better positioned to secure a larger share of the charitable giving market.

Other Stories

CFTC Unanimously Approves Proposal To Amend Recordkeeping Requirements
Statement Of CFTC Chairman Timothy Massad On The Notice Of Proposed Rulemaking To Amend Regulation 1.31
CFTC

Fourth Measure From SelectMilan’s Reform Programme Adopted In Milan – Italy’s Financial Regulator (CONSOB) Establishes Arbitration For Financial Disputes
MondoVisione

PLY: Interesting albeit limited in scale to small disputes but a good sign how Milan’s businessmen want financial markets activity while the Italian blob is dysfunctional.

ACER Calls On EU Associations Involved In The Electricity Sector To Express Their Interest To Participate In The System Operation European Stakeholder Committee
ACER

ESMA Calls For Consistent Application Of MiFIR Product Intervention Powers
ESMA

Britain’s Finance Industry Drops Demands For Passporting After Brexit
Reuters UK

PLY: Good spot by Huw Jones – an outbreak of pragmatism seems to have finally hit some City mandarins which is heartening. Let’s face it earlier this week the EBA was noting the equivalence of banks in the non-state of Kosovo (which is only a few steps ahead of San Escobar in tangibility), so it’s fair to suggest Britain might just pass muster for equivalence on on ongoing basis…

Thanks as always for reading Exchange Invest.

Have a great weekend and stay tuned, Monday is edition 911 – wonder what Porsche assigned to that type number? Try to conceal your excitement, all will be revealed Monday.

Best wishes,

Patrick

Patrick L Young
Executive Director DV Advisors

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