January 18 2016

elb2

In Premium today, I am looking at The Top Tier of the Pyramid as we work through the exchange universe as it currently stands. Subscriptions are $300 per user per year, invoices available in GBP, EUR & USD.

Blythe Masters Blockchain startup opens London presence just as the original Blockchain appears to be rather riven with festering settlement disputes. Concerns from the Bank of England about US rules fragmenting the global swaps market while Basel Committee agrees slightly less onerous rules with banks for prop trading. Phupinder Gill leading plan to revitalise CBOT pits with fintech startup hub for Chicago. Lots of news from India and around the world, including calls for a competitor to the Nepal SE… Welcome to Exchange Invest Daily, Monday January 18th, happy scrolling:

Public Markets

Paddy Power Merger With Betfair Clears Final Hurdle

Barry O’Halloran – The Irish Times

Regulator gives the green light to deal that will create gambling giant.

PLY: Alas it probably downscales the Betfair exchange side… QV Premium:Exchange Deals Brief.

 

US IRS Trading Rules ‘Fragment’ Global Market (subscription)

Philip Stafford – Financial Times

New rules governing IRS trading in the US on electronic venues have increased liquidity and saved tens of millions of dollars for companies but fragmented the global market, a new study by the Bank of England has found. Costs for banks and other market participants of trading US dollar swaps fell by $20m-$40m daily, and by $7m-$13m every day for end users such as corporations.

PLY: A classic carpet bump either not appreciated, or, as some hyper-cynical souls prefer: willfully ignored, by the Gensler era Commission.

 

Basel Committee Softens New Capital Rules (subscription)

Laura Noonan, Martin Arnold & Caroline Binham – Financial Times

Amount banks must hold against trading books will be 40% higher.

PLY: Even at 40% still pretty swingeing and again the bumps in the carpet are a major concern.

 

More Connect Schemes, Commodity & Yuan Products In HKEx’s New Three-Year Plan (subscription)

Enoch Yiu – SCMP

Marker operator’s board has approved blueprint to be unveiled by CEO Charles Li on Thursday.

PLY: The “Gateway to China” play writ large – with three stools: More China linkages, Yuan & commodities… Sounds like a plan to me.

 

CSRC Pledges To Strengthen Oversight Amid ‘Abnormal’ Volatility

Reuters

China’s stock market is immature and the government will take more measures to improve supervision following the latest bout of extraordinary volatility.

 

India – Government Ready To Further Simplify Start-Up Listing Norms

The Economic Times

Government will further streamline and simplify norms, if required, to help start-ups get listed on the domestic stock exchanges.

PLY: Sensible…but anathema to SEBI I fear.

Private Markets

Bank of India Acquires 49% Stake From BSE In BOI Shareholding

The Economic Times

State-owned Bank of India acquired 49% stake from BSE in their joint venture BOI Shareholding Ltd for an undisclosed amount.  BOI Shareholding Ltd was established in 1989 as an independent full-fledged clearing house of the exchange with the public lender having 51% stake. BOI Shareholding Ltd became wholly-owned subsidiary of the bank.

PLY: Interesting & perhaps it is the cold weather in Europe but I am not quite getting my head around this deal as we race to pixel…

 

BSE-Registered Investor Base Crosses 30 Mln

Business Standard

PLY: Great number! If the BSE trading community was a nation it would be the world’s 45th largest, just behind Malaysia…

 

Bharti Enterprises Vice-Chairman Akhil Gupta Buys 5% In Indian Commodity Exchange

Madhvi Sally – The Economic Times

Chairman Akhil Gupta and another Delhi-based investor have each picked a 5% stake in Indian Commodity Exchange (ICEX) in a deal that values the bourse at Rs 200 crore ($30 mln).

The two investors have bought the stake from state-owned trading giant MMTC, which along with Reliance Capital and a host of others had promoted ICEX. After the deal, MMTC’s stake in the exchange has reduced to 16% from 26%. Reliance Capital, an anchor investor with MMTC, holds 26%.

QV Premium: Exchange Deals Brief 2.

 

Ex-NMCE Chief Denied Bail After Son Fails To Return

TOI

Gujarat high court refused bail to former chairman of National Multi-Commodity Exchange of India (NMCE), Kailash Gupta, because his son living in the US did not turn up to cooperate with investigators. Gupta is accused of committing fraud of Rs 28 crore (4.14 mln) on the company by involving his family members. His son, Amit, is also facing charges in the case and investigators, including Enforcement Directorate (ED), wanted to question him.

 

Nepal – ‘Capital Market May Need Another Exchange To Spark Competition’

Rupak D Sharma – The Himalayan Times

Interview with Rewat Bahadur Karki, Chairman of the Securities Board of Nepal, the securities market regulator, on issues hindering the growth of the capital market.

PLY: Very interesting… Nepal is actually the world’s 45th largest country by population, at 28.4 million, just a bit shy of the BSE client base.

 

Is Bitcoin Breaking Up? (subscription)

Paul Vigna – Wall Street Journal

Rift widening over how to deal with the size limits within the virtual currency’s ledger of transactions.

PLY: Decentralisation 101: a distributed ledger of opinions always seems to follow any decentralised structure…

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX down 2%, FTIL jumps 4%, presumably on rumours the company may not be defenestrated.

Technology

CME, Morningstar CEOs Mull Fintech Hub

Lynne Marek – Crain’s Chicago Business

A powerful pack of business leaders, led by CME Group CEO Phupinder Gill, DRW Trading founder Don Wilson and Morningstar CEO Joe Mansueto, are brainstorming a number of fintech ideas, including possibly a Chicago hub for such startups.

PLY: Very interesting and a wonderful way to potentially use vacant floor space at the CBOT Building 141 West Jackson.

 

Blythe Masters Opens Blockchain Shop In London (subscription)

Anna Irrera – Financial News

Blythe Masters, the former head of JPMorgan’s commodities business on Wall Street, is bringing her blockchain start-up to Europe.

Products

CME – Successful Launch of Ultra 10-Year Futures

CME

 

MOEX: T+2 Settlement Cycle To Be Introduced For U.S. Dollar-Denominated Eurobonds

MondoVisione

PLY: Once again the progressive folks of Moscow have to regress in order to fit in with the reactionary structures of western markets. Speaking of which, don’t forget: you can download my free paper on clearing & settlement Towards A Real Time World Market from our download centre.

 

Sebi Curbs On Agri Futures

Business Standard

To curb speculative trades in agricultural commodities, Sebi on Friday reduced the permitted daily price limit movements from the existing 6% to 4%. Position limits for near-month contracts has also been reduced and forward trading in all fresh contracts has been suspended.

PLY: As per all previous remarks on how SEBI can always be relied upon to intervene to ensure free markets remain a bit of a mirage… First intervention in such fashion I believe for the newly merged SEBI-FMC.

 

NCDEX Told To Discontinue Forward Trading Contracts

The Hindu Business Line

In contrast to market expectations of liberalising commodity trade, SEBI has directed NCDEX to discontinue forward trading contracts. SEBI said market participants will not be allowed to enter into fresh forward contracts till further orders. However, existing forward contracts shall be allowed to be settled according to the terms of the contracts.

PLY: True, one could argue it is an attempt to push business into exchange contracts away from bilaterals, but with SEBI the supposition that the agency is inherently anti-market is always the view which remains.

 

FX Market Wrestles With Agency/Principal Conflict (subscription)

Joel Clark – Financial News

Guy Debelle, assistant governor of the Reserve Bank of Australia, and one of the most influential central bankers in shaping new rules for the foreign exchange industry, has a hypothetical scenario on his mind that highlights a challenge facing the foreign exchange market.

 

Thomson Reuters – Introduction Of FX Monitor In Eikon Messenger

MondoVisione

Thomson Reuters Expands Scope Of Commodities Supply Chain Analysis In Eikon

MondoVisione

Indexes

WSE: Change Of Terms And Dates For WIG20, mWIG40, sWIG80 & WIG30 Index Rankings

MondoVisione

Career Paths

Euronext Amsterdam appointed Joost Kromhout as Head of Listing, as of 1 March 2016. In this role Joost will be responsible for the listing strategy, business development and client coverage of Euronext Amsterdam.

HKEx – The Listing Nominating Committee has extended the application period for nominations to the Listing Committee to 31 January 2016 from 15 January 2016.  The Listing Nominating Committee is seeking applications from individuals interested in serving on the Listing Committee and the Growth Enterprise Market (GEM) Listing Committee.  Appointments will be for a term of approximately 12 months commencing in July 2016.

Financial Calendar

19.01 – Interactive Brokers Q4 2015 Results

20.01 – SGX Q2 Results for Financial Year 2016

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

Other stories

CFTC’s Division of Market Oversight Extends Conditional, Time-Limited No-Action Relief Regarding Masking Certain Reportable Identifying Information

CFTC

 

UK Parliament Treasury Committee Update: FCA Work Examined By Treasury Committee

MondoVisione

 

What Investors Need to Know About Entering Iran’s Stock Market

Ladane Nasseri, Samuel Potter & Golnar Motevalli – Bloomberg

Stock exchange the size of Austria’s now more accessible.

 

 

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