January 28 2016

elb2There may be a shortage of omelettes in the City of London today as the Serious Fraud Squad resembles more the Frivolous Case Squad. They will be enduring a busy stint endeavouring to remove facial egg following the profound embarrassment that juries can discern between adolescent hubris in alpha males in a way which regulators clearly cannot. Elsewhere, in passing, I note EUREX complaining EONIA volume is so low it doesn’t really register for a settlement price. Unsurprising news is that post ICE acquisition, the top tier at Interactive Data Corp have left the building…

Lots more too on multiple topics while as we race to pixel those wondrous caped crusaders of risk reduction, TriOptima, has run an 18-bank wide first triReduce inflation swap compression cycle terminating $98.5 billion notional in inflation index swaps for the European Union: EUR- Excluding Tobacco-Non-revised Consumer Price Index.  Heartwarming stuff, happy scrolling:

Public Markets

Jury Acquits Five Of Six Brokers In Libor Trial (subscription)

Lindsay Fortado – Financial Times

A broker nicknamed “Lord Libor” was one of five men cleared of acting as middlemen between convicted former UBS trader Tom Hayes and others to help them manipulate bank rates, in a significant setback for the UK’s Serious Fraud Office.

PLY: LIBOR is one of those blancmange issues where after years of turning a blind eye, the political-regulatory complex suddenly became aware of an abuse (ironically at a time when interest rates had plateaued at lows) and like nailing jelly to a wall, the legal eagles swung into action. As I have pointed out before, juvenile hubris is broadly not a crime in and of itself although some authorities in (e.g. in the USA, vs Barclays) have managed to pressurise settlements. In this case, after a lengthy trial, it took barely a day and a half of discussion to decide 5 out of 6 were entirely innocent of any crime. That demonstrates both a certain foolhardiness in the regulatory complex as well as doing nothing to actually stop dubious practices…then again how many mortgage frauds were prosecuted post 2008? In that case, the authorities look curiously selective. Nevertheless, it would be complacent of the industry to ignore the likelihood that sooner or later regulatory focus will suddenly become fascinated by, say, spoofing, tape papering and dubious payments for providing liquidity. In all these instances, I think the time bomb continues to tick while regulators seem keen to bully footsoldiers but never tackle management (because clearly, they cannot mount a case…).

Treasury BondSpot Poland Once Again Selected as the Electronic Treasury Securities Market

Mondovisione

PLY: Having flopped from one control freak kleptocratic government to a new control freak administration whose impending economic failure it will soon be possible to scientifically calibrate – sometime after the ratings agency downgrade rush abates, or pauses, – the state controlled (via that curious facet of reinvigorated Communism which is camouflaged as the Polish ‘free market’ (sic)) Polish stock exchange celebrates being told by another arm of the government blob, that, er, unsurprisingly, it gets the gig for treasury bond trading – and competition clearly can go insert itself somewhere.

In other news, rumours abound that the government is demanding GPW speed up launch of its new Tractor Production Statistics Index.

Oh & finally, if anybody wants to buy some Polish assets, at least one Irish entrepreneur is divesting…

TWSE & SGX Sign Strategic Partnership Agreement

Mondovisione

A subsidiary of TWSE, Global Link Securities Co. Ltd will join SGX as a remote trading member, a significant first step towards wider partnership between the two exchanges.

PLY: The remote membership element might mean this is more than just the sum of frequent flyer miles on which it is predicated but MOUs remain so very mutual era I am a cynic. SGX and TWSE need to really have a hard lesson on for profit economics, neither is currently quite in a fit state to be a 21st century market.

NYSE’s $2 Trillion ETF Business Sees Heightened Competition

Annie Massa – Bloomberg

NYSE Group Inc. remains king of ETFs among U.S. stock markets, but challengers to the throne are gaining ground. Last year, a record 23 ETFs left the company’s NYSE Arca exchange, shifting their listing to rival markets…

PLY: Hardly earth shattering, albeit no doubt NYSE doesn’t want to lose a single listing & BATS in particular is trying hard to compete on this plain where the country club dimension is less than with single name IPOs.

London Metal Exchange Moves Open Outcry Trading Floor

ERIC ONSTAD – Reuters

The 139-year-old LME will wrap up open outcry trading on Wednesday at its red leather “ring” before moving the trading floor to a new home elsewhere in the capital’s financial district.

PLY: Farewell to the current ring and hello to another, multi-product use, creating rounds of key benchmark fixes makes the ring still a useful artifice.

LME To Introduce Data Usage Fees In April (subscription)

Alice Atwood – FOW magazine

Coming in April new charges on data usage, the latest step in commercialisation at the HKEx-owned group.

PLY: Previously LME had had a habit of just redistributing data income to members in the old days…

Singapore Probes Malaysian’s Role In 2013 Penny-Stock Rout

Andrea Tan – Bloomberg‎

Singapore is looking into a Malaysian businessman’s involvement in the city’s largest securities-fraud probe, when 3 companies suffered an unexplained free-fall that wiped out S$8 billion ($5.6 billion) in a penny-stock rout in 2013.

PLY: Another rave from the legal grave, probably hear something from HKMEx soon too at this rate…

CFTC signs MoU With Germany’s BaFin And Deutsche Bundesbank

Mike Fox – LeapRate

PLY: MOU to share clearing info etc between CFTC, BaFin and Bundesbank.

Private Markets

Japanese Exchange Bitflyer Invests In IoT Startup Through a ¥50 Million Fund

CryptoCoinsNews

Japanese exchange Bitflyer has announced a 50 million Yen investment into a new fund which will see Osaka-based IoT startup Sivira as the first company to benefit from the fund as part of an effort to support and encourage the growth of blockchain businesses in Japan.

East Africa Agrees to Fast-Track Unification of Stock Exchanges

James Kariuki – AllAfrica.com

PLY: Cooperative portal to link: Kenya, Uganda, Tanzania and Rwanda.

Tanzania: DSE Boss Touts Use of Infrastructure Bonds

AllAfrica.com

Tanzania should finance infrastructure development through their local capital markets to close the transportation gap in a timely fashion.

The country is expected to start debt-bond-markets where domestic savings are intermediating and be able to finance infrastructure projects

PrivatEquity.biz Will Export Localized Secondary Market Web Trading Platforms

Mondovisione

PrivatEquity.biz, Israel’s first online secondary market trading arena…

PLY: …Is also attempting to enter the, broadly dead, zone of pre-IPO markets which bubble occasionally ahead of ‘hot’ IPOs in the likes of Facebook (ultimately a moist squib, even before Bob-daq fell over in shock at his golf shirt) or LinkedIn. It’s a great way for egos to go (qv Liquidnet’s investment in a similarly dormant platform for private markets which has gone pretty much nowhere) but I have yet to be convinced even startup nation genius will really make this work, especially not when there are many paths to trade and listing already available. It’s a sort of “soup of the day microniche” not a truly viable perpetual business methinks…

Lack Of Cooperation Stalls Commodity Exchange

GhanaWeb

Ghana is likely to miss its June 2016 deadline of starting the commodity exchange market due to the lack of support from some stakeholders,

Peer-to-peer Power? Finance Tech Comes To Solar Energy

Keith Larsen – GreenBiz

PLY: Useful, interesting concepts for energy – not a green thing, just a sensible potential innovation…

How NCDEX Launched First Online Warehouse Space Reservation System For Indian Farmers

Sneha Jha – ETCIO.com

Millions of farmers in India lose their agricultural produce due to woefully inadequate storage…

Prosper, Which Bought Israeli BillGuard, Sees Riches In Startup Struggles

Laura Rosbrow-Telem – Geektime

PLY: A fascinating tale both on the BillGuard acquisition but particularly around Prosper CEO Aaron Vermut and the turnaround journey of that business.

Rules & Regs Changes At LuxSE

JD Supra (press release)

Mauritius: Developments Relating To New Mauritius International Stock Exchange

Sokolako (press release)

In the setting up of a new Mauritius International Stock Exchange, Nasdaq Dubai will take equity in the Stock Exchange of Mauritius which will be rebranded as Mauritius International Stock Exchange.

NSE All Set For New Securities Trading

Zachary Ochuodho – K24 TV

Nairobi Securities Exchange (NSE) yesterday inched closer to introducing a derivatives market, signing six clearing members in readiness for the launch.

Stock Markets To Become More Active In Azerbaijan

Nigar Orujova – AzerNews

Azerbaijani government continues work to stabilize the economy including a plan to issue manat and dollar bonds on the domestic stock market

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX off slightly, FTIL down 2%.

Technology

Nasdaq To Provide SMARTS Market Surveillance Technology To Nigerian Stock Exchange

Mondovisione

PLY: Good deal for NASDAQ adding SMARTS to the existing X-Stream deal. Spoofing and layering ought to be a thing of the past, can we expect to see western markets adopting this good Nigerian CSR practice?

LSEG: GATElab Provides Low-Latency Risk Gateway To NSE

Mondovisione

LSE subsidiary GATElab, has launched an ultra low latency service risk gateway to NSE enabling users to send orders to the NSE equity derivatives segment in less than 30 microseconds, if all the pre-trade risk checks are met, and encompasses:

PLY: …no real progress for mankind but huge excitement for a certain kind of trader.

ThinkLiquidity Integrates With CME Group For TR

Mike Fox – LeapRate

ThinkLiquidity has become a registered service provider with CME Group (NASDAQ: CME) to offer transaction reporting for brokers licensed under ASIC to the CME Group ASIC licensed ATR.

PLY: Not intending to mention every service provider but just pointing this out as many readers may be unaware the CME has an Australian TR.

Istanbul Eyes November Nasdaq Futures Tech Launch (subscription)

Alice Atwood – FOW magazine

Borsa Istanbul has targeted November to implement Nasdaq’s technology and trading system for its derivatives market

Products

NASDAQ OMX Armenia Lists First UCO Securitized Bonds In Armenia

Asbarez Armenian News

NASDAQ OMX Armenia marked the successful launch of the first securitized bond issuance in Armenia, a landmark transaction made possible through the joint efforts of USAID, Capital Investments, and universal credit organizations.

PLY: Not sure how you spell securitisation in Armenian while alas I have just run out of their world class brandy at home…

Indexes

Stakeholders Call For Investigation

ERICA SHAFFER – Meat & Poultry (registration)

PLY: Beef producers una-moo-sed when cattle prices aren’t going their ways… Well if they don’t like free markets there’s always Bernie Sanders.

Tel Aviv: All New Index Methodology Underway

Mondovisione

The detailed methodology rules will be published on TASE website for public comments starting January 27th, 2016 until February 10th, 2016…

New Db X-Trackers US Govt Bond Index ETF Launched On Xetra

Mondovisione

TSX & S&P Dow Jones Indices Sign Multi-Year Agreement

Mondovisione

PLY: Some years ago, S&P memorably jumped from MX to TSX before the merger took place which created TMX…

Career Paths

Sylvain Thieullent, currently EMEA head of electronic trading,* has been appointed CEO of Horizon Software, while founder Jean-Marc Delfarguiel, becomes President.

*PLY: Congratulations to Sylvain, albeit clearly this news raises the question that as he was EMEA head of electronic trading, is there an EMEA head of open outcry trading too at this algo vendor?

CME appointed American academics Lars Hansen & David Rockefeller to their Competitive Markets Advisory Council.

PLY: When I looked last evening, ICE had a market cap $700 million above CME Group… The Golden Cross is happening…

 

Naureen Hassan, who previously oversaw Charles Schwab‘s retail robo-adviser platform, has been hired as Chief Digital Officer for wealth management at Morgan Stanley.

Stephen Daffron has stepped down from the role of President & CEO of Interactive Data, as has Executive Chairman Mason Slaine, according to Waters.

PLY: ICE decapitates legacy management, standard operating procedure when dealing with a business they want to progress as part of the group vision.

Financial Calendar

Today – Nasdaq Q4 2015 Results

New! 10.02: BGC Partners ‘Fourth Quarter And Full Year 2015 Financial Results

New! 1.03 Tullett Prebon plc will announce its preliminary results for 2015

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

Analyst Notes

ICAP upgraded  from ‘neutral’ to ‘outperform’ by Credit Suisse – 510p price target maintained

Fidessa “Hold” Rating Reaffirmed at Panmure Gordon – GBX 1,712 price objective

CME “Buy” rating reaffirmed by Deutsche Bank – $105 price target

CBOE “Hold”rating reaffirmed by Deutsche Bank – $64 price target

ICE “Buy” Rating maintained by Deutsche Bank – $299 price target

CBOE Rating Lowered from “Buy” to “Hold” by Zacks Investment Research

LSE “Outperform” rating restated by Credit Suisse – GBX 2,900 price target

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

Crowdfunding

What Is The Future Of Crowdfunding?

Olivier Vergnault – Western Morning News

Equifax Appointed By Crowdfunding Platform InvestDen

Finextra (press release)

Equifax, the consumer and business insights expert, continues to expand its presence in alternative lending with InvestDen becoming the latest crowdfunding platform to utilise Equifax Identity Verifier.

Technavio Analyses Top Four Emerging Trends Impacting The Global Crowdfunding Market Through 2020

Business Wire (press release)

Crowdfunding Is Slowly Moving Into Real Estate

Heath Berkin – Finance Magnates (blog)

Crowdfunding Enables Diverse New Frontier For Journalism Projects

AMY MITCHELL -Pew Research Center

A new study by Pew Research Center examines one of these emerging tools: crowdfunded journalism, in which projects can be proposed and funded through online appeals to the public.

Crowdfunding Won’t Fix Science Funding, But It Will Draw A Curious Crowd

Jacqueline Ronson – Inverse

Science funding, so the story goes, is in crisis. Enter crowdfunded science: Experiment.com.

Other stories

Post Crisis Reforms: Balance Sheet Lessons – Speech By Andrew Bailey, Deputy Governor BoE, CEO PRA

Mondovisione

EC: Keynote By Commissioner Hill At Trans Atlantic Consumer Dialogue, Brussels

Mondovisione

The SEC’s ATS Transparency Rules: What’s the Impact?

Ivy Schmerken – Finextra (blog)

The SEC’s new proposed rules on transparency in alternative trading systems are going to shine a light on the operations of dark pools, ensuring fair access to information for all market participants.

More about this topic here.

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