January 29 2016

elb2

FTIL exits DGCC, NASDAQ CFO to retire, yolks still concentrating on the faces of the SFO who make legal history (hat tip to Harry Wilson of The Times) by having prosecuted Tom Hayes for conspiring with nobody.

Incidentally, thanks to Phil Stafford at the FT for pointing out on Twitter my remark on ICE surpassing CME as the number one in the world’s exchange market capitalisations…The Golden Cross theory I outlined earlier this month to Premium readers is coming to pass.

Meanwhile, Bob Greifeld effectively reworks that classic New Yorker cartoon “How about never, is never good for you?” in his view of challenger IEX, with a piece of brilliant protectionist disingenuity under the pretence of blaming the regulators.

Happy scrolling…

Public Markets

FTIL exits DGCX with stake sale to DMCC

Economic Times

PLY: Apparently two separate deals: FTIL sold 13% of DGCX for $ 5,225,000 and 14.3% of DGCX held by its subsidiary FT Group Investments for USD 5,775,000. Money ought to be held lest it is required to pay for NSEL fiasco (which by rights it ought to be). 51% holder of DGCX, DMCC had right of first refusal on the stake.

N.B. FT Group had valued DGCX at over $1 billion in 2007 when it sold 1% to partner DMCC for $12.5 million (around Rs 60 crore) and later another 5 per cent to Passport Capital, a foreign institutional investor.

QV Premium: FTIL Stakes Sales Brief

Nasdaq quarterly profit rises, CFO to retire

Nasdaq Reports Higher Q4 Profits

John McCrank – Reuters

Transatlantic exchange operator Nasdaq Inc on Thursday reported a rise in Q4 profit, helped by higher stock trading and information services revenues, along with lower expenses.

Net income $148 million, or 88 cents per diluted share in the quarter ended Dec. 31, up from $87 million, or 50 cents per share, a year earlier, when the company’s results were affected, in part, by acquisition-related expenses.

PLY: It has been a while since a NASDAQ CFO left but nonetheless turnover in this post during Bob Greifeld’s tenure appears to have been higher than other exchange groups…

JPX & Consolidated Subsidiaries Consolidated Financial Results For The Nine Months Ended December 31, 2015

Mondovisione

PLY: Just in as we race to pixel, incremental improvement all round it seems.

ASX Elmer on Blockchain

2GB radio

PLY: Elmer explains Blockchain, fairly averagely, as is the wont of monopolists, it’s all about his bottom line, certainly not about the distribution of the ledger…

IBF & SGX Announce New Initiatives To Upskill Stockbroking Industry

Mondovisione

UK Serious Fraud Office: LIBOR Defendants Acquitted – Updated

Mondovisione

PLY: In the weird world of the blob, Mulder & Scully of the X-Files may find some rich material in this story. Certainly there is now a splendidly Kafka-esque scenario that Tom Hayes is serving a lengthy jail term for, rather oxymoronically, conspiring with nobody. Elements of the Stalin show trials of the 1950’s seem to be appearing in 21st century Britain. Calls by Mr Hayes’ Father for the hapless SFO boss David Green (who, clearly erroneously, reversed his predecessor’s decision not to pursue LIBOR cases) to face charges for defrauding the taxpayer with this wasteful show trial, strike me as not unreasonable in an era of unprecedented government overspend when the UK has no money to waste.

Singapore To Redefine SGX’s Oversight Role On Surveillance, Members

Reuters

MAS May Exercise More Oversight Over SGX In Future

Channel News Asia

SGX will continue to have regulatory powers for now, although the Monetary Authority of Singapore (MAS) may exercise more oversight in areas like member supervision and market surveillance in future.

NYSE Outlines Priorities to Strengthen Equity Market Structure During Extreme Volatility

The ICE

NYSE outlined actions it will prioritize to enhance U.S. equity market structure and strengthen the markets during times of extreme volatility.

PLY: NASDAQ has been having a good old slapdown-fest on NYSE noting the August opening fiasco was inexcusable (qv Glasshouse risk is readily apparent here and I fear there is a can of worms to be opened when you can be so trenchant about your opponents’ foibles but miss out the odd lamp post spotted in your own eye… see EI passim). It was, all the same, a significant issue for NYSE. Clearly ICE won’t want to see it happen (hence their work here to avoid it). ICE will be particularly mindful that this issue arose in a relatively unimportant but highly political profit centre. A single means of opening is worthy of discussion – as is a lot of other logic applied to US stock trading…which currently isn’t.

I think part of the problem now is that Bob Greifeld wants to revisit the ‘golden age’ where it was him against an NYSE CEO vying for what the 2 dimensional cash market folks view as the epicentre of global commerce. Nowadays the realpolitik is that NASDAQ is becalmed as a mid size player some way away from the major titans and that NYSE is actually just a subsidiary unit of a full service exchange business. Thus the old cross town rivalry has been somewhat blunted – NYSE is bigger than NASDAQ but only a subsidiary of its own far more significant parent…despite, an amazing track record of Bob’s process in making NASDAQ a vastly different and more diverse entity than the business he started with.

Fix Stock Market Rules Before Admitting IEX: Nasdaq CEO

JOHN MCCRANK – Reuters

Bob Greifeld: Regulators should overhaul decade-old rules that govern the U.S. stock market before allowing upstart venue IEX Group to become a fully-fledged exchange.

PLY: An inspired piece of self-serving disingenuous protectionism from Bob G. Given that his entire career as NASDAQ CEO has seen the US equity market becoming a greater mess, suggesting no new entrants may challenge his model until the process is sorted out is a perfect means to stop new entrants.

Aequitas NEO Exchange Receives Application For First Listing

National Post

PLY: It strikes me that TMX is in danger of becoming a sitting duck if it doesn’t soon enjoy an outbreak of management in its top ranks to re-energise a franchise which has looked increasingly leaden footed in recent times. That appearance is not aided by the apparent flexibility of the Aeqitas NEO management to innovate and deliver, then sell to TMX and start the cycle afresh…

CFTC Aims To Lower The Bar On Proving Manipulation In Pending Cases

Lexology (registration)

PLY: CFTC going down the route UK SFO must be kicking themselves for not applying, a lower bar for proving manipulation. This strikes me as a bizarre, rather desperate approach, given we have more data than ever (albeit most regulators don’t have the systems to analyse the data – ahem…) – I am all for punishing transgressions but regulatory agencies never grow confidence through using a diminished bar of proof.

Private Markets

“At A Pivotal Point” – Bermuda Stock Exchange (“BSX”) CEO Comments On The Insurance-Linked Securities Market

Bermuda Insurance Magazine

PLY: Interesting interview with CEO Greg Wojciechowski.

Legislature Says No To Bitcoin Tax Payments

Kelly Phillips Erb – Forbes

New Hampshire House of Representatives delayed a legislative push that would have made the state the first in the country to allow residents to pay their taxes using bitcoin.

State of Bitcoin & Blockchain 2016: Blockchain Hits Critical Mass

Garrick Hileman – CoinDesk

Blockchain Announces Close Of Second Venture Fund, Raises $13 Mln

EconoTimes

Blockchain Capital, announced the closing of its second fund of $13 million. The fund had a target of $10 million and has already made 20 investments last year.

Morgan Stanley Scales Back Equities Financial Technology Investing Group: Sources

MICHELLE PRICE & OLIVIA ORAN – Reuters

Morgan Stanley has scaled back a group that invests in financial technology on behalf on the bank’s equities division, according to people familiar with the matter. Most of the eight to 10 members of the principal strategic investments group have left the Wall Street firm in the last few months, including head Gary Offner…

PLY: Basel could yet kill the FinTech storm for banks as early adopters anyway…

No Plans to Phase out Junior Exchange After April 1

Government of Jamaica, Jamaica Information Service

Finance and Planning Minister, Dr. the Hon. Peter Phillips, says there are no plans to phase out the Jamaica Stock Exchange (JSE) Junior Market after April 1.

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL Up nearly 9% on the sale of the DGCX stake while MCX is up 2%

Technology

Revealed: First Details Of ICAP’s New Trading Platform

Joe McGrath – The Trade

PLY: Yuniti…

OSE: Go-Live Date Of Next Generation Derivatives Trading System

Mondovisione

European Investors Refuse To Budge In Move To Electronic Trading

Joe Parsons – The Trade

Incoming rules on electronic swaps trading have yet to persuade institutional investors.

Products

Derivatives Trading At Kenyan Bourse On Course

CNBCAfrica.com – TV

trueEX Completes First Electronic Mexican Peso Swap Trades For Institutional Investors

PR Newswire (press release)

NCDX Suspends Castor Seed Futures

AG Week

Sebi To NCDEX: Explain Castor Futures Suspension

Business Standard

Sebi To Tighten Risk Management At Commexes

Partha Sinha & Sidhartha – Times of India

Market regulator Sebi is expected to tighten risk management norms in the wake of suspension of futures trading for castor seed on NCDX.

Indexes

UBS Outsources Index Management To Markit

Renee Caruthers – FierceFinanceIT

UBS has agreed to outsource the administration & calculation of its investible indices to Markit. The firm said the move to outsource index management was made in part to meet regulatory best practices.

PLY: Interesting shuffle…

Career Paths

Euronext is parting ways with the Chairman & CEO of Euronext Lisbon, Luis Laginha. A replacement will be recruited and meanwhile board member  Director of Local Market Development, Isabel Ucha will become interim CEO and member of the Euronext NV Managing Board in the interim. Rui Matos, will be temporarily elevated from his board seat at Interbolsa to become interim CEO while Hugo Rocha will be appointed to the board of Euronext Lisbon.

Finnish regulator Anneli Tuominen has been appointed Vice Chair of ESMA for a 2½ year term effective immediately, replacing Carlos Tavares, former Chairman of the Portuguese Comissão Do Mercado De Valores Mobiliários (CMVM), whose has completed his term.

Lee Shavel, chief financial officer of Nasdaq is leaving the transatlantic exchange operator as of March 31 and is joining the board of directors of brokerage Investment Technology Group, the companies said on Thursday.

Former SEC Fund Chief Norm Champ Joins Kirkland & Ellis Law Firm

Financial Calendar

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

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

Crowdfunding

Real Estate Crowdfunding: Invest A Little, Diversify A Lot

TODAYonline (blog)

Crowdfunded real estate deals are, in some ways, a type of “club deal” that has been in the purview of the private banking space and their high net-worth clients. More about real estate crowdfunding here.

P2P Lending Platform LendInvest Publishes Annual Report

Samantha Hurst – Crowdfund Insider

A Secondary Market For Crowdfunding Investors Rises In Chicago

FierceFinanceIT

CFX, which opened to the public earlier this year, is a crowdfunding secondary marketplace, designed as a platform where crowdfunding investors can go to exit their positions.

Crowdfunding Gadfly Sets Up Equity Crowdfunding Service

JD Alois – Crowdfund Insider

Rob Murray Brown, a steady critic of the equity crowdfunding industry particularly in the UK, has launched a service to support SMEs seeking to leverage the new form of finance.

New UK Crowdfunding Platform Launched, Hoping To Improve Investment Standards In The Sector

Madeline Ratcliffe – City A.M.

A new equity-crowdfunding platform launched in the UK, which says it wants to improve the standard of investing in the burgeoning sector.

Other stories

ESMA Consults On MAR Guidelines Regarding Market Soundings & Delayed Disclosure Of Inside Information

Mondovisione

Struggling Chinese Companies Turn To P2P(subscription)

Don Weinland – Financial Times

Troubled companies in China are turning to the under-regulated internet finance industry to ease their cash flow problems, using peer-to-peer exchange platforms that match unpaid bills with debt collection agencies at a big discount for the vendors.

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