JANUARY 9 2017

And I am back with Exchange Invest, Happy New Year one and all!

Apologies for the slightly tardy despatch this morning but we have some core heating problems to deal with and it’s a bracing -10 degrees!

In Today’s Exchange Invest

Issue 906 of Exchange Invest celebrates the classic Carrera 6, the last road / racing car designed by Porsche – after this it became pure prototypes at the pointy end of their racing endeavours: purely awesome prototypes at that.

Anyway, while I was away enjoying a splendid festive break and preparing for what promises to be an epic 2017, not a lot happened. The big stories really boiled down to:

Euronext made an ‘irreovcable offer’ to buy the Clearnet clearing house …which may not be for sale.
The Warsaw Stock Exchange had yet another EGM and have yet another CEO, Rafal Antczak, who is another noted economist in Poland but not somebody who so far as I can see, has direct experience in the parish;
ICAP Tullett finalised their deal leaving NEX as the new belle of the ball for potential M&A albeit it may be a while yet before the bids truly roll in…
Governor/Senator/ex-MF Global boss John Corzine landed a $5 million fine and a lifetime ban from the CFTC for his CEO role in (somewhat spectacularly) not turning the venerable FCM into the new Goldman Sachs.
Jay Clayton, a partner at law firm Sullivan & Cromwell, has emerged as the leading candidate to be Chairman of the SEC.


Here’s to some cracking events in 2017…

In BigWorld

It’s not quite Trumpmania out there yet but the hopey changey one is in his twilight hours of presidency. Is it “Morning in America” once again? I cannot help but feel we are on the verge of great things in the US with volatility attached. Of course all the people who got every prediction wrong in that action packed 2016 are arguing the opposite and well, they do have to get something right sometime, I suppose…but I’m sticking with Mr Trump – if nothing else it’s a neat contrarian play.

Incidentally, there was a story of President elect Trump ceremonially turfing a controversial hagiographer off one of his golf courses during the festive season (which meant this golfer’s host David Koch and party had to go too). Politico got some useful background from a member of the party, none other than former parishioner and ex-FIA supremo John Damgard, ever the man about town with the rich and famous (I think David Koch was a school friend of John Damgard incidentally).

Public Markets

BoE Told To Firm Up Oversight Of Clearing
Financial Times

TMX Group Announces Sale Of Razor Risk

Fed’s Powell Urges Congress to Take Another Look at Volcker Rule

(Bloomberg) — Federal Reserve Governor Jerome Powell urged Congress to rewrite the Volcker Rule that restricts proprietary trading.

As Trump Eyes Dodd-Frank, Chicago’s Trading Interests Gear Up For A Battle
Crain’s Chicago Business

PLY: I am not minded to believe the Dodd Frank gutting will involve the swaps reform element – even if the banks are still trying to kill swap platforms by working things outside where they can. However, given that the Dodd Frank bill runs to some 2300 pages, I do feel there is a bit of ‘wiggle room’ to reduce the diktat to something a bit more manageable while retaining the core of pushing bilateral OTC to CCP and open platforms… After all even the EU managed to distill Pittsburgh 2009 G20 into EMIR and the original act was what, about 50 pages?

How An Activist Investor & A Corporate Lawyer Are About To Reshape Wall Street Rules
The Hill (blog)

Trump Gets Ammo for Bank Deregulation From Unlikely Source
Wall Street Journal (blog)

PLY: Volcker rule criticised by the Fed?

Europe To Formalise Clearing House Reviews
FOW magazine

Europe plans to tackle inconsistencies in the oversight of European clearing houses by formalising the steps for national regulators’ scrutiny.

Shanghai SE Spreads Net Further Through Joint Trading Of ‘D-shares’ with Frankfurt
South China Morning Post

Via CEINEX, coming soon: 10 D shares apparently…

Bats: Putative Class Action Lawsuit Filed

PLY: Ambulance chasers bicker over small print disclosure issues apparently.

Private Markets

Nomu – Parallel Market To Be Launched In Saudi Arabia In February 2017

Commodities Trading In GIFT City May Take A While

BSE, NSE To Conduct Periodic Call Auction For Illiquid Stocks

BSE and National Stock Exchange of India Ltd (NSE) are conducting periodic call auction for illiquid securities of nearly 400 companies from today, January 9th (335 on BSE, 31 on NSE).

Trading, Position Limit Rules Could Be in Jeopardy Under Giancarlo
Bloomberg BNA

Impact Exchange Asia

Special Section: FTI, NSEL, India at the Crossroads

Alas still no clear moves that the NSEL situation is being resolved.


Gift City: BSE’s International Bourse To Be World’s Fastest, Says CEO
The Indian Express

PLY: There is more to life than being the boy racer who made a tuning car from his German thoroughbred surely?


Nodal Exchange Announces Launch of Mid-Columbia Power Futures Contracts
Power World Analysis

Indian Commodity Exchange Set to Start Trading Diamond Futures
IDEX Online

MCX Jumps 2% As Sebi Approves Trading in Castor Seed Futures
Economic Times

Career Paths

At the latest EGM pushed by the majority voting government shareholder, the Warsaw SE ousted the CEO Małgorzata Zaleska, who had made, at best, zero impact, one year into the job and replaced her with a Deloitte economist / board member in Poland Rafal Antczak whose precise understanding of the parish is unclear.

I wish Mr Antczak well as the GPW has hemorrhaged skills and reputation in recent times broadly hindered by one nitpicking government after another. Professor Zaleska presumably returns to academia. She alas appeared spectacularly unsuited to running the Warsaw Exchange despite an earlier successful stint as a non-executive board member. The GPW remains adrift and in need of a coherent strategy – and preferably less volatile micromanaging government influence.

Meanwhile, On December 30th, supervisory board members Wojciech Sawicki and Łukasz Świerżewski, resigned.

Kuwait SE Appoints New Chairman

The Kuwait Stock Exchange has selected a new chairman, following the appointment of its previous chairman as oil minister.


GoFundMe Expands To UK & Europe
UK Fundraising

Fintech P2P Lending Platform Gains £40m From the UK Government

UK-based Fintech unicorn Funding Circle, has received £40m from government-owned British Business Bank to directly fund small business.

Mini-Bond Firm Wellesley May Not Survive, Auditor Warns

A subsidiary firm, Wellesley Finance, has raised around £36m by issuing mini-bonds which, like P2P loans, are not protected.

PLY: Founder Graham Wellesley claims he has raised new finance since the audit warning but then again being both the platform and a lender may strike some as a conflict of interest anyway?

Other Stories

FCI To Sell Last Year’s Tur Stocks Through NCDEX Platform
Financial Express

To dispose of the previous year’s stocks in the open market, the government has allowed Food Corporation of India (FCI) to sell around 11,000 tonnes via NCDEX.

I hope you and yours are already enjoying a Very Happy, Healthy, Peaceful and Prosperous New Year… onwards to what looks like a fascinating and fabulous 2017!

Thank you for reading Exchange Invest.


Patrick L Young
Executive Director DV Advisors

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