July 06 2016

elb2It sounds as if post LSE vote to approve a London based organisation, all of a sudden, an HQ shuffle is on the cards because nobody in their haste had the foresight to predict a Brexit vote. Not sure this double down will succeed either. However, for naked desperation on the part of both sides, this deal is now the market leader in the history of the parish. It also broadly takes the biscuit for bad organisation and dismal communications too despite the egregious fees being paid to (often OTCDerivnet) banks. Meanwhile I consistently hear from parishioners everywhere that beyond the payroll of the companies concerned there is enormous cynicism the deal will make it through multiple regulatory hurdles.

Elsewhere it’s good to see the major newswires producing some more mature comment on Brexit with the realisation dawning that shuffling clearing is a huge challenge. (You can now access my Brexit files in Premium through this contents directory: Brexit – Main File).

Public Markets

Statement By DB1 on LSEG Shareholders’ Vote


DB1 Signals HQ May Be Outside UK After LSE Deal


London May Lose, Or Share, Merged Stock Exchange HQ After Brexit

William Turvill – City A.M.

Executives at the exchanges are scrambling to reach an agreement over the location of their post-merger base, with pressure from Germany for the merged entity to have an EU-based HQ.

Both sides had pledged that the joint company’s HQ would remain in London as a condition of the deal.

PLY: “My word is my bond…well, maybe.” That could prove seismic.

Large Investor in DB1 Backs Merger With LSE (subscription)

Tim Cave, William Wikes & Eyk Henning – Wall Street Journal

Jupiter Asset Management fund manager says politics shouldn’t interfere with deal that ‘succeeds in delivering efficiency’.

PLY: I am so minded to ponder which planet Jupiter Asset Management are on when they put the phrase ‘efficiency’ in the same sentence as either DB1 or LSE, let alone the collective blob which might emerge.

QV Premium: DB1-LSE Merger Brief.


DB1 To Divest Market News International


DB1 and Hale Global have entered into an agreement regarding sale of MNI (Market News International). Details of deal are subject to a confidentiality agreement.

Completion of transaction is expected within Q3 2016.

PLY: Hale is a turnaround shop it seems with few, if any, direct investments in pure financial markets currently. I was never quite sure why DB1 bought MNI. Now I am not quite sure why they are selling it.


Virtu Financial Enters into a Strategic Minority Investment with SBI Japannext


Virtu Financial is making a strategic minority investment in SBI Japannext, a leading Proprietary Trading System based in Tokyo.


Rivals Eye Britain’s EU Passport To Riches

Huw Jones – Reuters

Don’t Count London Out

Lionel Laurent – Bloomberg

A French president taking an interest in the arcane world of financial plumbing is a sure sign of how Britain’s neighbours plan to exploit its vote to leave the European Union.

…The way French President Francois Hollande tells it, it sounds like a fait accompli. London will be forced to give up its dominance over the clearing of trades done in euros as a consequence of leaving the EU. But it’s probably safe to file this simple act of retaliation under “not going to happen.”

PLY: After a week containing a lot of idiocy, the major newswires roll out wiser heads to assess just what the threat isn’t to clearing (as I discussed in client briefings straight after the Brexit vote). Hopefully this outbreak of thinking may prove contagious into the financial press as well…


Costly Data Battle Heats Up Between Traders & Equity Exchanges (subscription)

Financial Times

Private Markets

ICEX Relaunch Stumbles Into Grey Area (subscription)

Dilip Kumar Jha – Business Standard

The relaunch of Indian Commodity Exchange (ICEX), which has Reliance Capital, MMTC and Indiabulls Housing Finance as major shareholders, is likely to face a hurdle on account of a likely conflict of interest between Reliance Capital holding a seat in the governing body of the exchange and being a promoter of a broking subsidiary.

Special Section: FTI, NSEL, India at the Crossroads

Markets closed: Id-Ul-Fitr (Ramzan Id).

PMLA Court Summons Jignesh Shah, 67 Others In NSEL Case

Shrimi Choudhary – Business Standard

The special court of the Prevention of Money Laundering Act (PMLA) has summoned all the 68 accused named in the Enforcement Directorate (ED) chargesheet in NSEL scam case.

All the accused, including FTIL founder Jignesh Shah, MCX-SX’s Joseph Massey and former NSEL CEO Anjani Sinha, have been asked to be present before the court on July 7.

QV Premium: NSEL Scandal Brief – Part 16.


Sinara Chosen By LME To Develop New Matching System


As part of its plans to upgrade its core systems to meet MiFID II requirements, LME will deploy a new, more flexible Matching system to replace the existing LMEsmart. The matching system developed by Sinara will integrate with both the Trading & Clearing systems at LME.

PLY: New bilateral system for LME. Off the top of my head while racing for pixel, I think the legacy system was from Millennium IT.


High-Frequency Traders Should Open Up, Osaka Bourse CEO Says

Yuko Takeo & Toshiro Hasegawa – Bloomberg

More transparency about strategies and their effects needed. But OSE Head Hiromi Yamaji adds HFT “absolutely necessary”.


European Commission Signs Agreement With Industry On Cybersecurity & Steps Up Efforts To Tackle Cyber-Threats


EC launches a new public-private partnership on cybersecurity that is expected to trigger €1.8 billion of investment by 2020. This is part of a series of new initiatives to better equip Europe against cyber-attacks and to strengthen the competitiveness of its cybersecurity sector.


BoE Backs Derivatives Leverage Ratio Rethink (subscription)

Philip Stafford – Financial Times

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

New! 19.07 – IBKR Q2 2016 Results – press release

New! 03.08 – TMX Q2 2016 Results – press release

New! 04.08 – Bats Q2 2016 Results – press release

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

Share Notes

Mandatory Notification Of Trades – Oslo Børs VPS Holding ASA


In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has allotted 1861 shares to employees.


Indiegogo Could Soon Dominate Equity Crowdfunding

Jeremy Quittner – Fortune

Other stories

Cleaning Up Tarnished Financial System & Making Top Bankers Face Justice Is Least That Ordinary Citizens Should Expect

Alex Brummer – Daily Mail

Four years have passed since ‘Master of the Universe’ Bob Diamond revealed that something rum was going on in the Libor market.


ASIC Crackdown On Unlicensed Retail OTC Derivative Providers




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