July 22 2016

elb2NYSE raised the most money for IPOs, NASDAQ collected the most IPO mandates, DB1 struggles to collect voting shares while Curve Global is shuffling staff in a fashion which suggests it expects to launch – whether this is as part of DB1 or the still independent LSE remains to be seen…

Public Markets

KCG Q2 2016 Results


vs Q2 2015: consolidated revenues of $319.9m, up 22%, pre-tax income of $54.6m (compared to a loss of 57.1m), includes a gain of $33.4m from the sale of a portion of the company’s investment in Bats.

Following the sale, KCG retained a 13.7% stake in Bats.


DB1- LSEG: HLDCO123 PLC – Announcement Pursuant To Section 23 Para. 1 Sent. 1 No. 1 Of The German Securities Acquisitions & Takeover Act


QV Premium: DB1-LSE Merger Brief.

PLY: The arcane paperwork which only underlines the unfortunate state of play we are now in where the deadline will keep moving until the shareholders realise what is good for them. Not much of a way to run a business and as for an enterprise charged with self-regulation? Anyway, it’s 201 days to go on the countdown to the zone where EU anti trust says no…


Control Conflicts Of Interest In ‘Dark Pool’ Trading

Huw Jones – Reuters

UK’s FCA Publishes Thematic Review Into Dark Pools


UK’s FCA TR16/5: UK Equity Market Dark Pools – Role, Promotion & Oversight In Wholesale Markets


Dark pools, or anonymous share trading platforms, must handle conflicts of interest better, Britain’s markets watchdog said on Thursday in a review that stopped short of proposing major changes ahead of tougher EU rules in 2018.

PLY: FCA overall suggests improvement in the UK dark pool market…


NYSE Leads in U.S. IPO Proceeds Raised to Date in 2016


NYSE remains the premier venue for global capital raising with over $5.1 billion in proceeds from U.S. IPOs YTD as of July 19, 2016. Activity for IPOs at the NYSE strengthened as H1 2016 progressed, particularly in the technology sector.

The Nasdaq Stock Market Leads All US Listing Exchanges with 38% of ETP Listings & Switches in Q2 2016


In H1 2016, Nasdaq Stock Market captured 39% of new ETP listings and switches across all exchanges. In total, 61 ETPs have chosen Nasdaq thus far this year, among which 37 are new ETP launches, including products from BlackRock, State Street, Janus and AccuShares, and 24 are product switches from other US exchanges, bringing Nasdaq’s total ETP listings to 277. Of Nasdaq’s H1 listings and switches, 29 track an index calculated and operated by Nasdaq.

FAO: Check Nasdaq’s H1 2016 New Listings announcement earlier this month – reported here.


Can HKEX Avoid Another ‘Mess’ When Closing Auction Session is Revived On Monday? (subscription)

Enoch Yiu – SCMP

Stockbrokers claim order prices capped at 5% from the reference price will not prevent the chaos that ensued after the pricing mechanism’s first launch in 2008.

PLY: I think this has to be the most brutal headline of the week. Hope HKEx can launch the revived closing auction smoothly Monday.


Singapore, Hong Kong Take Steps To Remove Conflict Of Interest

Michelle Price & Anshuman Daga – Reuters

Hong Kong and Singapore are taking steps to curb the regulatory powers of their local bourses to remove a perceived conflict of interest and improve the quality of listed companies.


ASX Listing Rules Could ‘Lock Out’ Potential (subscription)

Elizabeth Redman – The Australian

ShareRoot CEO Noah Abelson backed some elements of the planned changes, but raised concerns that high-potential, fast-growing companies could be locked out by the proposals, which seek to increase the minimum net tangible assets a company must have to float from $3 million to $5m. The alternative test – a minimum market capitalisation measure – is set to be increased from $10m to $20m.

PLY: Just as the rest of the world has spent years obsessing about moving to smaller listings in the nanotech world which is approaching, the ASX demonstrates all the foresight of a typical lumpen monopoly by trying to move away from the business it presumably cannot cope with, as opposed to where there will be a lot of demand in the future. Perplexing is one word for this behaviour which undermines the Australian economy’s prospects. Hopefully other players can take up the slack from the ASX’s wholesale move towards representing its fellow blobsters as opposed to showing agile thought and practice.


CFTC Staff Issues Guidance to Clearinghouses on Recovery Plans & Wind-Down Plans


Statement Of CFTC Chairman Timothy Massad On CFTC Staff Guidance Regarding Clearinghouse Recovery Plans & Wind-Down Plans


Concurring Statement Of CFTC Com. Sharon Y. Bowen Regarding The Division Of Clearing & Risk’s Memorandum To All Registered DCOs Regarding Recovery Plans & Wind-down Plans Maintained By DCOs & Tools For The Recovery & Orderly Wind-down Of DCOs


Private Markets

NSE Could Get A Market Cap Of Rs 40,000 cr (USD 5.95B) (subscription)

Krishna Kant & Sheetal Agarwal – Business Standard

India’s only listed exchange, MCX, had debuted in stock market at a P/E of 37 and is currently valued at 67.

National SE (NSE) could get a market capitalisation of Rs 40,000 crore (USD 5.95B), going by the price-earnings (P/Es) ratios of global stock exchanges. HKEX trades at a P/E of 29 times its trailing earnings (profits) while the CME trades at 28 times. Nasdaq and LSEG trade at about 25 times.

PLY: That is quite a number and a multiple which must make Xavier jealous.


EPEX SPOT SE: Austrian-Slovenian Border Successfully Coupled




The News

Pakistan Mercantile Exchange (PMEX) and Iran Mercantile Exchange (IME) signed a MoU.

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL slips slightly, MCX up 2%.

Govt: FTIL-NSEL Merger Won’t Hurt Minority Shareholders

Jayshree P. Upadhyay – Livemint

Most decisions at FTIL are controlled by a few large shareholders, says the government in reply to a writ petition.

QV Premium: NSEL Scandal Brief – Part 16 & NSEL-FTIL Merger Brief.


LME Trading Resumes After Four Hour Delay On Technical Outage


LME Resumes Trading After Connectivity Issue


LME resumed trading after a near-four hour delay caused by users being unable to access its platform.

The opening of electronic trading on LMEselect was halted while the exchange worked with its network provider to resolve a connectivity issue. Trading, which normally begins at 1 a.m. in London, didn’t resume until shortly before 5 a.m.

LME’s trading ring in the U.K. is operating from its disaster recovery site in Chelmsford, 40 miles from London, due to a structural fault at its usual building in the capital. The exchange moved trading there on Monday and was expected to stay until today.


OTC Clear Receives Regulatory Approval to Clear USD/CNH Cross Currency Swaps


OTC Clear expects to launch the service in August of this year.


Sebi To Finalise Options In Commodities

Rajesh Bhayani  – Business Standard

Net worth norms for warehouse service providers also likely to be tightened.


ITG Launches ITG Smart Market Indicator Forecast App


…an application that helps traders anticipate market volumes, spreads and volatility.


CME Announces Launch of S&P 500 Total Return Index Futures & S&P 500 Carry Adjusted Total Return Index Futures

CME Group


FTSE Russell Confirms Compliance With IOSCO Principles, Noting Enhancements


Career Paths

FOW reports that CurveGlobal is set to part ways with its COO Cathryn Lyall. Lyall became COO in February. Meanwhile CurveGlobal appointed Richard Walker as Head of Business Development. Richard joins from another LSE Group company LCH, where most recently he was Head of EMEA Client Sales & Marketing. In his five years at LCH, Richard helped grow the client clearing business at SwapClear.


HKEX appointed Jacky Mak as MD, Head of OTC Clearing, effective Monday, 25 July 2016. Mr Mak will be in charge of business development and operations of OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of HKEX.  He will report to Calvin Tai, HKEX’s Head of Clearing.


RTT News reports that KCG’s Mike Blum, who joined the firm in January as Global Head of Client Technology, has been named CTO, effective October 1, 2016. Jon Ross, KCG’s CTO, will be leaving the company to pursue a variety of personal projects in the technology space, unrelated to trading and markets.


SEC announced that Wesley R. Bricker has been named the Commission’s Interim Chief Accountant responsible for the activities of the Office of the Chief Accountant as James V. Schnurr, current Chief Accountant, recovers from a serious bicycle accident.


The Treasury Committee publishes its report ‘Appointment of Andrew Bailey as CEO of the Financial Conduct Authority‘. The Committee endorses the appointment.

Financial Calendar

27.07 – Nasdaq Q2 2016 Results

27.07 – SGX Full-Year Results FY2016

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

Other stories

New City of London Group To Help Government With Brexit talks

Huw Jones – Reuters

Daniel Hodson, a former CEO of LIFFE said the new group – initially known as City United – aimed to bring together under one roof those in the financial sector who backed and opposed Brexit. Hodson was director of Vote Leave which campaigned for Brexit in last month’s referendum.

He said other members of the group included another City of London veteran, Anthony Belchambers, a former head of the FOA. Graham Bishop, a pro-EU consultant who has advised EU institutions, is also a member.

PLY: Parishioners will note both Daniel and Anthony serve as NLX NEDs. A good idea given Daniel’s longstanding leave credentials and Graham is an obvious choice as a longstanding Europhile of impeccable standing. While sentiment is good, the body will also benefit from some more lateral thinking capacity to add to its rather establishment mien.

Watch Out London, Amsterdam Is Coming to Get You

Elco Van Groningen & Corina Ruhe – Bloomberg

PLY: Funny thing is as I recall when there was a likelihood that a certain Dutch CSD would garner a vast share of European equity CCP business, many felt the Dutch were reluctant to be so prominent.

This is another of those local mayors trying to show their constituents they mean business but materially it is broadly ill-conceived.

Frankfurt’s Trading Importance Set to Grow Post-Brexit: Chart

Julia Hirsch – Bloomberg

PLY: Dreams of My Fatherland to paraphrase President Obama’s most famous book. In other surveys, turkeys thought Christmas was outmoded while 100% of schoolchildren voted for Christmas every day as a replacement for Quantitative Easing. Thank goodness for Brexit, if not just think what utter drivel the mainstream media would have been reduced to printing during the summer.


ESMA Fines Fitch Ratings Limited €1.38 million


ESMA has fined Fitch Ratings €1.38 million for a series of negligent breaches of the Credit Rating Agencies (CRA) Regulation and has published the Decision of the ESMA Board of Supervisors and a Public Notice in relation to this action.


Corzine, Others Settle Most Litigation Over MF Global Collapse

Jonathan Stempel – Reuters

PLY: Little sting in tail, we end with a viable story:  Governor Corzine settles up most of the litigation over the MF Global debacle… Hopefully he is remembering to wear his seat belt these days too.


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