July 18 2013

elb2 Well what a fascinating day. EuroCCP and EMCF inked the deal to merge while we lead with the outstanding news of Deutsche Boerse offering a facility for block equity trading through co-operation with Liquidnet. Meanwhile there are LSE numbers and the best staff news in ages: Warsaw SE founder Wieslaw Rozlucki is the new Chairman of the exchange. There is a lot in here today, so read on:

Public Markets

Deutsche Boerse & Liquidnet to Co-Operate in German Block Equities

PLY: Hot off the presses and with full disclosure (I am an NED of Liquidnet Europe), this is a great deal for both parties. DB gains a facility to block trade equities, which ought to be a total win win for the institutional marketplace and hopefully too Institutional Liquidity Pools such as Liquidnet will now be appreciated for their great merits as opposed to being attacked alongside less economically worthwhile broker dark pools which do not have the same positive impact in reducing costs for large counterparties dealing in equities. An excellent move all round and one which was presaged by Seth Merrin’s brilliant keynote speech at this year’s FESE Convention.

EuroCCP-EMCF Sign Deal To Form Pan-European Clearinghouse


PLY: Confirming the deal agreed in March, the DTCC’s EuroCCP and EMCF will merge. An interesting move, although I am tempted to suggest that yesterday’s move by LSE to add a Luxembourg CSD will put this unit under pressure as they try to get the post merger structure rationalised….

CME’s Duffy Warns Senate That Proposed CFTC Rule To Hurt Brokers


A proposed U.S. rule meant to protect futures customers’ money in a collapse like MF Global Holdings Ltd. could “fundamentally change” how the market functions, according to CME Chairman TerryDuffy

The CFTC proposal that futures brokerages set aside enough of their own money to cover customers’ collateral deficits throughout the day may end up driving clients from the market and companies out of business, the FIA and two Chicago firms, Rosenthal Collins Group LLC and RJ O’Brien & Associates LLC, told the agency earlier this year.

PLY: Given that the failure of MF Global was caused by extraordinary proprietary trading only marginally related to the futures business itself, the CFTC’s action here looks frankly moronic. Placing an onus of capital on brokers equivalent to de facto their daily risk will cause clearing costs to explode to the upside and render the US futures business utterly uncompetitive with the rest of the world. This rule is so ill-conceived it would have been a challenge for even the worst of European regulators to create it. There is no “could’ about it, this rule is utterly toxic to US exchanges and US FCMs.

LSE – Interim Management Statement To 17 July 2013

Mondovisione (press release)

PLY: They state themselves: “Good Group performance – revenue up 39 per cent on Q1 last year at £249.7 million, reflecting growth across all business divisions…” No doubt these are good numbers and again Xavier Rolet, seems to be transforming the LSE. From his FTSE deal all those months ago to his Luxembourg CSD move this week, there is tangible evidence that LSE is making a serious impression in its efforts to become more than just a cash equity leviathan.

Deutsche Boerse Strengthens Latin America Ties

4-traders (press release)

German exchange operator Deutsche Boerse AG (DB1.XE) said Wednesday its Clearstream clearing, settlement and custody arm is strengthening ties with financial markets in Latin America by signing Latin Clear Panama as the first transfer agent onto its Vestima investment fund platform.

Latin Clear Panama is the region’s central clearing hub for investment funds.

Private Markets

FINRA Commences Market Surveillance Of Direct Edge Exchanges

During a two to three month transition period, Members may receive surveillance inquiries from ISE, Direct Edge’s previous provider of market surveillance services, as well as FINRA.

This is an interim step toward Direct Edge’s transition to a more comprehensive suite of market surveillance services to be provided by FINRA,

A Bitcoin Prediction Market


PLY: The frankly ghastly named “Predictious” has been much discussed in bilateral client calls. Using Bitcoin, it neatly circumvents a lot of regulation currently and is otherwise similar to Intrade.

Decision fails To Excite Commodity Bourses

Hindu Business Line

PLY: A straw man reform: you can have 49% of the company owned by foreigners but only 5% each. Such rules harm exchanges materially and are a good arbiter of protectionist regimes the world over. Once again India, sadly, disappoints when it comes to exchange regulation.


Vietnam Plans New Bond Products


Vietnam plans to introduce new bond instruments such as futures, related indexes and cross currency repurchase agreements to boost trading in the market, as the government ramps up debt sales to a record this year. Implementation is expected in 2014.


NYSE Century Index Outperforming Other Broad-Based Indices as CEOs Gather for Second Annual Century Club Gathering (subscription)

Wall Street Journal (press release)

PLY: That country club thing NYX (and NASDAQ) are doing with their listings franchise…well this is the process writ large, a genuine country club meeting to go with the country club approach I have been discussing in client calls for some time…


CQG Integrates with KCG Hotspot For FX


Denver, Colorado-based CQG today announced the addition of foreign exchange (FX) trade execution to its services through integration with KCG Hotspot, the New Jersey-based electronic communication network (ECN) for foreign exchange.

SE Thailand Improves Business Operations & Consolidates IT

Stow Sentry

The Stock Exchange of Thailand (SET) has implemented Cisco’s Data Center architecture to increase operational flexibility, improve its business operations and streamline its online trading platform.

Career Path

Tel Aviv SE CEO To Step Down At Year-End


PLY: It is a shame to see Ester Levanon stepping down in the wake of the TASE board not supporting her plans to boost trading volumes, having been CEO since 2006 and overseen great growth in the marketplace. Ester, we wish you every success.

Warsaw Bourse Appoints Founder As Its Supervisory Board Chairman


Warsaw SE has appointed its founder and first chief executive, Wieslaw Rozlucki, as the new chairman of its supervisory board.

Rozlucki, who set up and ran the bourse between 1991-2006, returned to the exchange in June as a member of the supervisory board. He replaces Leszek Pawlowicz.

PLY: From disappointment to sheer delight. While those with a short term memory recall only Ludwik Sobolewki, it was thanks to the dogged single-mindedness of Wieslaw Rozlucki that Warsaw has an exchange and it was he, with help from the likes of Finance Minister Leszek Balcerowicz who helped craft the GPW’s strategy for success.

Proof that there is justice in the world is served by the return of a brilliant man who having rejoined the board some weeks back now becomes the sort of Chairman who we fully expect will help drive the Warsaw SE forward with gusto.

Ian Axe To Step Down As LCH. Clearnet Chief


PLY: Ian Axe is to step down as Chief Executive of LCH.Clearnet Group Limited and LCH.Clearnet Limited now the handover to LSE is in order. An increasingly standard post takeover procedure (qv Martin Abbott at LME last month), so presumably we can expect a Duncan Niederauer departure from NYSE around February 2014?

Again we wish Ian all the best.

NASDAQ OMX Group Conducts Election For Subsidiary Boards


NASDAQ Announces the appointment of nine directors to The NASDAQ Stock Market LLC, NASDAQ OMX PHLX LLC, and NASDAQ OMX BX, Inc. Boards for a one year term.

The name and title of directors appointed to the Boards of The NASDAQ Stock Market LLC, are highlighted below:

— Leonard J. Amoruso, Executive Vice President of KCG Holdings, Inc
— Daniel Bigelow, President and Managing Partner of Monadnock Capital Management L.P
— Michael J. Curran, retired Chairman and Chief Executive Officer of the Boston Stock Exchange
— Merit E. Janow, Dean, Columbia University’s School of International and Public Affairs
— William M. Lyons, retired President and Chief Executive Officer, American Century Companies, Inc.
— John D. Markese, Vice Chairman, American Association of Individual Investors
— A. Douglas Melamed, Senior Vice President and General Counsel, Intel Corporation
— Eric W. Noll, Executive Vice President, Transaction Services, The NASDAQ OMX Group, Inc.
— Wendy S. White, Senior Vice President and General Counsel, University of Pennsylvania

Financial Calendar/Dividend News

Interactive Brokers will pay a quarterly dividend payable of $0.10 per share Friday, September 13th.

Analyst Notes

Goldman Sachs Group Inc. Reiterates Buy Rating for CBOE Holdings
CBOE Holdings Given New $42.00 Price Target at Compass Point, reiterates “neutral” rating
Goldman Sachs alters recommendation on Tullett Prebon to buy from conviction buy
Analysts at UBS AG raised their target price on shares of Charles Schwab reiterating their “neutral” rating.

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

All Analysts, Baenks and Brokers are welcome to contribute to this section.


How Crowdfunding Is Changing the Way Local Causes Raise Money

Street Fight

The fundraising tools that local nonprofits have traditionally had at their disposal are typically events like galas, walk-a-thons, and other types of community volunteer events. These sorts of offline events will always be powerful for bonding donors to the cause, but they are resource intensive, often costly to produce, and generally don’t have much reach beyond the locality.

Crowdfunding is the new mediaspeak for the practice of online project fundraising made popular by sites like Kickstarter. It adds personality to the “donate” box.

Seedrs Has Incredible Year, Plans Expansion Outside UK

Crowdfund Insider

Their first active year of equity crowdfunding raised £1.4 Million for 27 crowdfunded campaigns – where the average amount invested was £631.

Crowdfunding For Life Sciences Companies: To Seek Or Not To Seek

Bio News Texas

Microryza is another crowdfunding platform exclusively for scientific research projects, available only to PhDs and professors who can attempt to raise money through this private channel instead of applying for grants.

PLY: The niches for crowdfunding are simply endless…

Other Stories

Women ‘Key’ to Safeguarding Japan Equities’ Future


Japan Exchange Group Inc. needs to attract more female investors.

Female respondents said they don’t invest because the risks look very high, they don’t feel they have the knowledge and they believe investing is speculative or only for rich people, the survey, commissioned by in March, showed.

NYMEX building bids due tomorrow

New York Post

Bids are due next Thursday, July 25th for the NYMEX building at One North End Avenue in the World Financial Center. NYMEX operator CME Group would like to take back a two-year master lease and then consolidate its energy market trading floor in 220,000 square feet in the lower portion of the building for 13 years, according to bidders.

This would give the new owner the opportunity to lease about 300,000 square feet on the upper floors to other companies.

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