July 24 2014

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Istanbul IT system seems to want to be at the seaside, as Kotak eyes IEX stake (no, the energy exchange in India), while IEX supremo Brad Katsuyama speaks to UK upper house committee. Ludwik Sobolewski contract published while NASDAQ and MarketAxess report Q2 numbers. ICE completes Wombat sale and more, including news that the genial Robbie McDonnell has been elevated in the TT hierarchy…

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New: FTIL: The Divestment of MCX

New: The Democratisation of Swaps aka The Citadel Inverse Repo Breakthrough

NLX: Missed Opportunity

Public Markets

NASDAQ OMX Reports Strong Q2 2014 Results
NASDAQ OMX

Q2 2014 net revenues $523 million, up 16% YoY. Non-transaction based revenues 74% of total Q2 2014 net revenues, increased 19% from the prior year quarter. Company paid down $100 million of debt Q2 and returned to its long-term leverage target. Completing this de-leveraging allowed a resumption of the buyback program, $93 million of stock was repurchased during the period.

MarketAxess Q2 2014 Financial Results
MarketAxess

Record revenues of $65.0 million, up 2.3%, Pre-tax income $29.1 million, down 7.5% as reported; Diluted EPS from continuing operations of $0.48, down from $0.51 as reported or $0.49 as adjusted

ICE Completes Sale Of Wombat Financial Software To SR Labs
ICE

ICE has completed its previously announced transaction with SR Labs for the sale of Wombat Financial Software, a unit of NYSE Technologies. The transaction closed and terms were not disclosed. Evercore acted as financial advisor and Shearman & Sterling LLP acted as legal advisor to ICE on this transaction.

EI reported on June 19th that ICE made an agreement to sell Wombat Financial Software to SR Labs, and on June 24th the agreement ICE made with ULLINK to sell NYFIX and Metabit.

Uday Kotak Eyes FT’s 15% Stake In IEX
Nisha Poddar – The Economic Times

Uday Kotak is said to be eyeing more assets from FTIL, with Kotak Mahindra Bank interested in picking up a 15% stake in Indian Energy Exchange (IEX). FTIL may be expecting a valuation of Rs 1,700 crores (USD 283 mln) for its power trading arm, IEX. Jignesh Shah’s FT may garner close to Rs 400 cr (USD 66.6 mln) by selling it’s holding in IEX.

Kotak Mahindra Bank bought 15% of MCX from FTIL, as reported on July 21st. FTIL appointed Axis Capital to sell its 24.89% stake in IEX, as reported on July 22nd.

FAO/PLY: EI reported on March 25th that FTIL planned to sell 5% (1.36 mln shares) of IEX for Rs. 72.89 crore (USD 12 mln) to Golden Oak (Mauritius), valuing IEX at USD 240 mln, suggesting FTIL are expecting a higher valuation for their stake…

New Brokers On The Block At LSE-Owned Dark Pool (subscription)
Anish Puaar – Financial News

Turquoise, the equity market majority-owned by LSE, has set a date for the launch of its new block-trading facility and signed up three major brokers to use the service from day one (October 20th). Turquoise began consulting with the industry on its new service, known as Block Discovery, in April. JP Morgan, Instinet and BAML have already committed to using it.

ASX Lowers Fees For Interest Rate Futures Clearing Participants
ASX

From 1 October 2014, ASX will lower fees and increase growth incentives for clearing participants in its interest rate futures and OTC clearing business. This will be achieved by implementing a new fee schedule for interest rate futures and by providing volume discounts for OTC clearing.

PLY: If ASX are lowering fees this cannot be surely the act of a purely beneficent monopoly can it? Or are these ramifications from the spread of swaps trading outside the ASX’s own silo?

Flash Boys Hero Quizzed By Lords (subscription)
Anna Irrera – Financial News

Exchanges are in part responsible for creating the conditions that have benefited HFT firms and caused structural inefficiencies and market unfairness, the CEO of trading venue IEX Group told the House of Lords.

SEC Adopts Money Market Fund Reform Rules – Rules Provide Structural And Operational Reform To Address Run Risks In Money Market Funds
MondoVisione

SEC adopted amendments to the rules that govern money market mutual funds. The amendments make structural and operational reforms to address risks of investor runs in money market funds, while preserving the benefits of the funds.

Private Markets

NSE Price Its Shares At Sh9.5 (USD 0.1)
Standard Digital

The Nairobi Securities Exchange (NSE) IPO kicked off yesterday (one month after demutualisation) with the public expected to subscribe to at least 500 shares priced at Sh9.50 (USD 0.1) per share. The exchange is offloading a total of 66 million shares to the public in a development expected to set the stage for its eventual self-listing in September 9. 63.5 million shares are up for grabs by the public while 2.5 million shares have been reserved for the employees of the NSE.

The proceeds of the offer estimated at Sh627 million (USD 7.13 mln) will be used by the 60-year-old exchange to pay off an outstanding mortgage loan of Sh160 million (usd 1.82 mln) secured from KCB to partly finance the purchase of its six-storied Tosica Centre located at 55 Westlands Road.

NSE IPO previously discussed on July 11th and July 7th.

India – Another Commodity Exchange, Another Fraud
Ashish Rukhaiyar – Livemint

Signs of fraudulent trading practices have emerged in another corner of the commodity markets. Universal Commodity Exchange (UCX), which suspended trading operations last week citing “prevailing market conditions”, was, at the time, under the scanner of FMC for alleged fictitious trades conducted for the undue benefit of a certain set of investors.

The commodities market regulator issued notices to the bourse—the first was in March—seeking an explanation for a sudden increase in trade volume, trades executed by a set of investors familiar with each other, and buy/sell orders in certain contracts being punched at exactly the same time. Mint has a copy of the notices sent by FMC to the exchange.

NCDEX: Evening Trade In Agri-Commodities Helps Manage Price Risk Better
Commodity Online

NCDEX has reported an encouraging participation by members and clients after introducing the evening trading in select agri commodities from April 01, 2014. The Open Interest (OI) in these commodities has also increased, with OI in Ref Soya oil increasing by over 30% after introduction of evening trade.

BVC Joins UN’s SSE Initiative
SSE Initiative

Colombian Securities Exchange (BVC) announced that it will partner with the UN Sustainable Stock Exchanges (SSE) initiative. Colombia is now the second Latin American exchange to join the SSE, along with ten others from the US, Europe, Africa and Asia. This diversification enables shared learning, with sustainable business practices reaching greater parts of the world.

Angry Bitcoin Investors Demand Answers At Mt. Gox Meet In Tokyo
NDTV

Bitcoin investors voiced anger Wednesday after the first creditors’ meeting for failed Tokyo trading exchange Mt. Gox, whose spectacular collapse hammered the digital currency’s reputation and left a trail of unanswered questions.

More than 100 investors, mostly expatriates, attended the meeting at a courthouse in the Japanese capital, demanding to know how some $500 million worth of Bitcoins disappeared from the disgraced company’s digital vaults earlier this year.

Dividend News

NASDAQ OMX’s BoD has declared a regular quarterly dividend of $0.15 per share on the company’s outstanding common stock. The dividend is payable on September 26, 2014, to shareowners of record at the close of business on September 12, 2014.

MarketAxess‘ BoD declared a quarterly cash dividend of $0.16 per share of common stock outstanding, to be paid on August 21, 2014 to stockholders of record as of the close of business on August 7, 2014.

Special Section: FTI, NSEL, India at the Crossroads

PLY: No trades today, Jignesh Shah still behind bars, MCX up 2% and as excitement spirals about a sale of the IEX stake, FTIL is up 10%.

Technology

Technical Glitch Interrupts Trading On Turkish Bourse Two Days In A Row
Hurriyet Daily News

BİST has been hit by a technical glitch for the second time in two days, prompting an inquiry by the country’s capital markets watchdog. A technical breakdown caused the session to start at 9:50 a.m. on Wednesday, one day after trading at the exchange was stopped due to technical difficulties. A technical glitch interrupted trading on the BIST for 62 minutes on July 22, as a software issue caused by an order correction message sent from an investor damaged BIST’s processing system.

LME & Colt Collaborate To Launch LMEnet
MondoVisione

LME is working with Colt Technology Services to launch LMEnet, a dedicated network that will provide market participants a fast, reliable and secure connection to LME’s electronic systems, including LME Clear.

Thomson Reuters Increases OTC Data Coverage Through Expanded Partnership With BGC Partners
MondoVisione

Thomson Reuters and BGC Partners announced a strategic agreement to expand customer access to OTC pricing data. BGC’s OTC pricing data is now available to customers of Thomson Reuters Eikon, Thomson Reuters Elektron Real Time, Tick History and DataScope Select, as well as BGC’s trading system. The agreement incorporates a consolidated licensing solution aligned to individual clients’ business models.

Algo-Logic Systems Launches Ultra-Low-Latency Highly Scalable Key/Value Search (KVS) Solution For Datacenters
MondoVisione

Algo-Logic Systems, Inc., a recognized leader in providing Gateware Defined Networking (GDN) products and solutions for datacenters, accelerated finance and data acquisition industries, announces the launch of their ultra-low-latency 10G/40G/100G Key/Value Search (KVS) solutions capable of running on multiple Altera Stratix V platforms.

Products

LSEG’s UnaVista Partners With Omgeo To Boost Matching Of Synthetic Equity Swaps
LSEG

LSEG’s UnaVista and Omgeo, the post-trade solutions provider, announced a partnership to support tri-party matching of synthetic equity swaps between executing brokers, prime brokers and investment managers.

The new offering links UnaVista, LSEG’s global hosted platform for matching, validation and reconciliation, with Omgeo Central Trade Manager (Omgeo CTM), Omgeo’s strategic platform for the central matching of cross-border and domestic equity, fixed income, repos, ETD and equity swaps transactions.

Malta Launches Its First Alternative Investment ETF Under New Securitization Act
Opalesque

The first Exchange Traded Instrument (ETI) issued under the Malta Securitization Act went live recently on the European Wholesale Securities Market (EWSM). The “Dynamic Trading Strategies ETI” is linked to and backed by a performance linked bond issued by a Special Purpose Acquisition Vehicle allowable under the Securitization Act of Malta with the sole purpose of holding Managed Accounts at Interactive Brokers LLC and Sensus Capital Markets plc.

The EWSM is a joint venture between Malta SE and Irish SE and acts as an EU regulated market for arrangers and issuers of wholesale debt products.

PLY: Good to see the EWSM gaining traction…

Indexes

On Winklevoss Bitcoin Index, It’s Open Season For Developers
Daniel Roberts – Fortune

The twins are opening up the API to developers on their WinkDex. Why? In an uncertain market, they’re hoping it will help make their pricing index the standard.

PLY: A potentially wise move.

Career Paths

Ludwik Sobolewski (BVB CEO) Employment Contract (Romanian version only)
MAKE & Adina Ardeleanu – Bursa

Ludwik Sobolewski signed a 4 years contract with BVB for a monthly gross salary of 16.667 Eur, and performance bonuses of 80% – 150% of this monthly gross salary ( between 160k and 300k Eur) and an additional bonus of the precedent year income (salary + performance bonus – between 360k-500k Eur) according to the draft contract reviewed by Bursa.

Check the draft contract here.

FOW reports that BCS Financial Group, the largest trader on the MOEX, has bolstered its London-based derivatives team with the appointment of Matthieu Ressencourt as head of equity derivatives trading. He joins from VTB Capital.

Markit, the provider of financial information services, has announced the appointment of Matthew Kolby as head of IR. He reports to Jeff Gooch, CFO, and is based in New York.

Trading Technologies appointed Robbie McDonnell to EVP Global Sales from VP/MD of Asia/Pacific. McDonnell will relocate from Sydney to TT’s headquarters in Chicago, where he will report directly to CEO Rick Lane and be responsible for leading TT’s worldwide sales operation.

PLY: Marvellous news! I am delighted for the excellent Robbie McDonnell on news of his accession to global sales EVP which is richly deserved. Good move by TT.

Financial Calendar

Today

NASDAQ OMX Q2 2014 Financial Results
DB1 Q2 2014 Financial Results

This month

Tullett Prebon H1 Financial Results – Tuesday, 29 July 2014
Thomson Reuters Q2 2014 Financial Results – Wednesday, July 30, 2014
SGX – Financial Year 2014 (FY2014) Financial Results – 31 July 2014
BGC Partners Q2 Financial Results – Thursday, July 31, 2014

New announcement

SunGard Q2 Financial Results – Friday, August 1, 2014

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

Other Stories

Statement At SEC Open Meeting On Money Market Fund Reform, SEC Chair Mary Jo White, Washington, D.C., July 23, 2014
MondoVisione

Strengthening Money Market Funds To Reduce Systemic Risk – SEC Commissioner Luis A. Aguilar Washington, D.C., July 23, 2014
MondoVisione

Statement Of Commissioner Kara M. Stein – SEC Commissioner Kara M. Stein, Washington, D.C., July 23, 2014
MondoVisione

Statement Of Commissioner Daniel M. Gallagher, SEC Commissioner Daniel M. Gallagher, Washington, D.C., July 23, 2014
MondoVisione

Statement At Open Meeting Regarding Money Market Fund Reform – SEC Commissioner Michael S. Piwowar, Washington, D.C., July 23, 2014
MondoVisione

SIFMA Statement On SEC Money Market Fund Reform
MondoVisione

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