July 04 2016

elb2The Exchange Invest team wishes all our American readers a very happy Independence Day.

In the parish, the ICDA CyberRisk conference in London, July 20th is an interesting upcoming event, secure a place at GBP 295 with the Exchange Invest code YOUNG295.

Meanwhile, you can now access my Brexit files in Premium through this contents directory: Brexit – Main File. Once again I cannot caution enough the dangers of reading the mainstream media on the topic which broadly reflects its own biases and not the reality of the situation…let alone delivering coherent analysis.

Today it’s the LSE shareholder vote. Given the outsize return being offered, investors would be mad not to take it but that is a very different thing from the silly crowing of investors endorsing the deal we can anticipate from the embattled and wrongfooted LSE after the vote goes ‘their’ way.

Public Markets

Why LSEG Investors’ Votes May Be Wasted (subscription)

Paul J. Davies – Wall Street Journal

Brexit threatens to crack the common regulatory ground in Europe and derail the merger.

PLY: Hesse dislikes the deal, Brexit gives them more leverage. It’s a bit like having a man who is lost in the desert whose water has been poisoned but the water bottle has been holed by a different party. Who ultimately will kill him? Difficult to say but he is doomed.

LSE Investors to Vote on Deal Ensnared by Post-Brexit Politics

John Detrixhe & Aaron Kirchfeld – Bloomberg

PLY: Given the vote now gives them free money on a more fundamental misprice than ever, investors would be mad not to support the deal even if it is highly unlikely to succeed.

LSE, DB1 Put a Brave Face On Merger Post-Brexit

Tom Buerkle – Institutional Investor

PLY: I see “stubborn” and “brave” as differently defined in my dictionary.

QV Premium: DB1-LSE Merger Brief.


Stephane Boujnah: Brexit Is an Opportunity for European Markets

Alexandre Boksenbaum-Granier & Caroline Connan – Bloomberg

Euronext NV CEO Stephane Boujnah: The U.K. vote to leave the EU is a growth opportunity for euro zone-based marketplaces and market players will have to reorganize their businesses within the EU.

PLY: I think the worry is the politicisation implicit as the minor European financial centres try to carve bits of flesh off a carcass…which is in fact still a living, viable entity. There is opportunity as Boujnah rightly assesses but the danger is in seeing a zero sum outcome which is to misunderstand both the history of this parish and financial centre dynamics as a whole. Good to see the Euronext CEO on the side of the optimists which is where the intelligent parishioners moved rapidly last week, qv the Bob Greifeld WSJ Op Ed etc.


CSRC Chairman: Shenzhen-HK Stock Connection ‘Definitely’ On For This Year (subscription)


QV Premium: HKEx – SZSE Stock Connect.


‘Flash Boys’ Crusaders Seen Reaching Sixth Place Among Exchanges

Declan Harty – Bloomberg

Poised to open in mid-August, Investors Exchange may handle 2 – 5% of volume within the next five years, Weeden & Co.’s Andrew Upward estimated. In June, IEX’s current venue handled about 1.6% of trading.

Flashboy Brad Katsuyama On The Future Of IEX After Winning SEC Approval

Steven Bertoni – Forbes

IEX Group won stock exchange status from the SEC on June 17th (reported here).

As an exchange, IEX will see volume surge since traders will have to execute on IEX if it has shares priced better or equal to the other exchanges. It also means Katusyama can collect high-margin fees by listing companies on his exchange.

Can Inefficiency Help Equities?

Rob Daly – Markets Media

The 350-microsecond speed bump deployed by the Investors’ Exchange has been the most cantankerous market-structure issues in US cash equities since the NYSE attempted to keep its ‘slow quote’ a protected quote in the run-up to Regulation National Market Structure last decade.


Democrats Back a Trading Tax, Say Speediest Traders a Threat

Nick Baker & John Voskuhl – Bloomberg

“We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets,” according to a draft released Friday of the proposed Democratic platform, a summary of goals the party wants to promote. “We acknowledge that there is room within our party for a diversity of views on a broader financial transactions tax.”

The proposal is a nod to the agenda of Democratic presidential candidate Bernie Sanders, and an effort to appeal to his supporters. The draft platform’s reference to “a broader financial transactions tax” echoes a proposal from the Vermont senator, who challenged Hillary Clinton for the party’s nomination but who now says he’ll vote for her.


Bats Statement On ISE Form 4 Filing


Bats provides the following additional information related to the Form 4 filed by International Securities Exchange Holdings (ISE).


SFC Wants To Play Bigger Role In Vetting New Listings But Won’t Replace HKEX As Front Line Regulator (subscription)

Enoch Yiu – SCMP

The SFC has no intention of taking over HKEX’s front-line role in regulating new listings and the recent proposals are aimed at involving the SFC in the listing process at an earlier stage, according to Chairman Carlson Tong Ka-shing.


CME Hikes Fees On Crude & Natural Gas Contracts (subscription)

Julie Aelbrecht – FOW


EC – New EU Rules To Fight Insider Dealing & Market Manipulation In Europe’s Financial Markets Take Effect



ESMA Publishes Responses Received To Its Consultation On Guidelines On CSDR


ESMA has published the responses received to the Consultation Paper on Guidelines on participant default rules and procedures under CSDR.


ESMA Proposes Two Amendments To Natural Person Identifiers Under MiFID II


Private Markets

SBI Raises Rs 911 Crore (USD 135.5M) By Selling 5% In NSE

Sangita Mehta – The Economic Times

State Bank of India (SBI) has raised Rs 911 crore (USD 135.5M) by selling 5% of its stake in National SE (NSE) to Mauritius based foreign investor Veracity Investments.

Following this deal, the valuation of country’s largest stock exchange has risen to Rs 18220 crore (USD 2.71B).

Post this transaction, SBI holds 5.19% stake in NSE, while subsidiary SBI Capital Markets holds another 4.33%.

QV Premium: India – NSE Sales Brief.


Israel Cabinet OKs Bill To Make TASE For Profit


Israeli cabinet ministers on Sunday unanimously approved a bill to change the structure of the Tel Aviv SE (TASE) to a for-profit entity.

TASE’s members approved a demutualisation plan last year for Israel’s bourse, which is struggling with falling trading volumes and a declining number of listed companies.

The bill still needs parliamentary approval.


BSE & NSE Will Act As Electronic Book Providers

Governance Now

Electronic book mechanism for issuance of debt securities on private placement basis.


TWSE Launches New Stewardship Principles For Institutional Traders

China Post

Taiwan SE (TWSE) has unveiled stewardship principles for institutional investors in a bid to boost the quality of the local capital market and raise shareholders’ value.


Croatian Energy Market Operator HROTE Joins Europex


Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 2%, FTIL slightly firmer.


ICAP is Building a Blockchain ‘Rosetta Stone’ to Enhance its Post-Trade Process

Michael del Castillo – CoinDesk

ICAP has built what it refers to internally as a ‘Rosetta Stone’ for trades. ICAP invokes this term to describe its new system for managing securities post-trade workflow, one it has now encoded into a single business process. It’s designed to let any buyer transact with any broker across a wide range of possible trades.


Chinese Financial Firms Form Blockchain Consortium



ESAs Write To Commission On Delay To Bilateral Margin Rules For Derivatives


The Joint Committee of the three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – has issued a joint letter to Jonathan Hill, European Commissioner for Financial Stability, Financial Services & CMU, on the delayed adoption of the joint draft regulatory technical standards on risk mitigation techniques for non-centrally cleared ​OTC derivatives​.


Canadian Securities Regulators Amend Derivatives Reporting Rules



NCDEX Eyes Castor Seed Contracts Relaunch, Product Diversification

Ankit Doshi & Jayshree P. Upadhyay – Livemint


Tokyo SE To Begin Calculating Singapore Dollar Hedged Index



Cinnober Share Added To Second Index


New First North 25 portfolio took effect Friday, July 1, 2016.

PLY: Good news again for the highly innovative Cinnober.

Career Paths

ESMA published the new list of members of its Securities and Markets Stakeholder Group (SMSG) following its approval by its Board of Supervisors. The selected individuals begin a 2½ year term on 1 July 2016 and will replace the group whose mandate expired on 30 June 2016.


Statement On Passing Of Former SEC Commissioner Irving M. Pollack, SEC Chair Mary Jo White, July 1, 2016


Financial Calendar

20.07 – ICDA Cyber Risk London Conference

20.07 – Record date WSE 2015 PLN 2.36 dividend

21.07 – Adjourned WSE Ordinary General Meeting to resume proceedings

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

Other stories

IME Gets WFE Membership

Tehran Times

Chairman of Securities and Exchange Organization of Iran (SEO) Mohammad Fetanat announced that Iran Mercantile Exchange’s (IME) membership status in World Federation of Exchanges (WFE) became final.



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