July 26 2016

ei 800

Lovers of Round Numbers will note this is Exchange Invest issue 800 today. Thank you to all our sponsors and corporate subscribers who help sustain this, the only daily brief for exchanges and marketplaces. More support will always be welcome!

In video, I appear fleetingly around the 2 minute mark in this TV Malta report discussing the excellent new tax incentives to encourage startup investment on the islands wearing my “Mission ToRun Business” startup hat, which were launched last Friday in the Prime Minister’s offices at Auberge de Castille. Back in the parish Anna Irrera quotes me in Financial News: Asia Leads Share Trading Slump

Germany mounts a bid for mutually assured parish destruction with a ‘global’ FTT, just as various American bills are seeking the same thing while the Winkelvoss twins have been beaten to it – the Gibraltar exchange has listed a Bitcoin ETP to lead the world…

Meanwhile in Bigworld, the new Bourne movie is out. Apparently in this action packed sequel Jason takes on the evils of the blob’s cover ups by trying to find Hillary’s old email server.

Public Markets

DB1 Says 58.06% Of Shares Tendered In LSE Merger Offer

Reuters

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

MondoVisione

PLY: Creeping along now up to 58.06%. Rumour has it they have DB1 staff combing the care homes of Hesse lest they can locate any OAPs with a few shares they might tender. Meanwhile, countdown to antitrust pushback zone hits 197 days.

 

E*TRADE Announces Acquisition of OptionsHouse

E*TRADE

E*TRADE entered into a definitive agreement to acquire Aperture New Holdings, the ultimate parent company of OptionsHouse, for $725 million in cash. The transaction will boost E*TRADE’s derivatives capabilities while expanding its customer profile with the addition of OptionsHouse’s highly active, derivative-centric traders.

E*TRADE intends to finance the transaction through the issuance of up to $400 million of noncumulative perpetual preferred stock, with the balance paid in cash. The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions and regulatory approvals.

OptionsHouse, which merged with tradeMONSTER in 2014, is an indirect subsidiary of Aperture New Holdings, a General Atlantic company, headquartered in Chicago and currently has 154,000 customer accounts with $3.6 billion in customer assets, including $1.4 billion in cash. The Company executed 27,000 Daily Average Revenue Trades for the twelve months ended June 30, 2016, of which 63% were in options. Revenues for the last twelve months were $104 million. E*TRADE expects the transaction to be relatively neutral to earnings in 2017 and accretive in 2018, when full run-rate synergies of approximately $65 million annually are expected.

QV Premium: Exchange Deals Brief – M&As.

PLY: The most interesting number is how a relatively lesser known options broker has some 154,000 accounts…

 

Bursa Malaysia H1 2016 Results

MondoVisione

vs H1 2015: PATAMI at RM99.4m (USD 24.4m), up 3.0%, Operating revenue at RM248.4m (USD 61m), up by 3.3%.

 

DFM H1 2016 Results

MondoVisione

vs H1 2015: total revenue AED 227m, down 22%, net profit AED 139.6m, down 30%.  

PLY: Disappointing.

 

Schaeuble Is Putting FTT on Global Agenda

Rainer Buergin – Bloomberg

German Finance Minister Wolfgang Schaeuble said on Saturday he’s putting efforts to tax financial transactions on the global agenda after attempts in Europe have stalled, even if results will only materialize after “years.”

PLY: Profoundly disappointing but standard German protectionist fare I fear. In other news, S&P notes what I have been saying for ages that the EU is unsustainable in its current form, particularly post Brexit. (Albeit S&P appear to naively believe that more Europe is the solution and the UK will stay in – clearly I am immune to this hyper-bizarre mania).

QV Premium: EU FTT Brief Part 2.

 

HKEX Successfully Launches Closing Auction Session for its Securities Market

HKEX

HKEX successfully introduced its Closing Auction Session (CAS) for securities after extensive preparations and testing conducted in conjunction with market participants.  There were 290 Exchange Participants that took part and 282 stocks were traded in the CAS on its first day, contributing 2.2% of the full-day turnover.

PLY: Gosh it couldn’t be that the Hong Kong media predicted doom and HKEx delivered a coherent solution, again, could it?

 

City of London Eyes ‘Equivalence’ As Post-Brexit Link With EU (subscription)

Financial Times

PLY: The shock is that it has taken a month for the Brussels Bugle, once a financial paper of record but now a husk of blind Euro-psychosis to work out the notion of equivalence and how actually passports are just an EU form of wrapping to take into account the inherently protectionist nature of the Brussels-centric customs union.

 

Break Up Financial Watchdog, MPs Demand (subscription)

Financial Times

PLY: Treasury Select Committee unhappy with the UK regulator’s inability to deal with HBOS leads to break up calls.

 

CFTC Staff Issues Advisory Clarifying Chief Compliance Officer Reporting Line Requirements

CFTC

Private Markets

Baltic Exchange Sets Out New Agreement With Shipbroker Panellists

Marcus Hand – Seatrade-Maritime

Baltic Exchange has sent a new agreement to all its panelists that should pave the wave for the finalisation of an offer by SGX to make a offer to buy the London-based shipping institution.

QV Premium: Exchange Deals Brief – M&As.

 

BSE, Mauritius SE Tie Up To Promote Financial Mkts

Business Standard

BSE entered into an agreement with Stock Exchange of Mauritius (SEM) for collaboration in areas including investments, products and cyber security.

 

ESMA Issues Warning On Sale Of Speculative Products To Retail Investors

MondoVisione

Since mid-2015, ESMA has coordinated a group of national regulators focused on issues relating to a number of Cyprus-based investment firms that sell CFDs and binary options throughout Europe. The Cyprus Securities and Exchange Commission (CySEC) has imposed fines on, or reached settlement agreements with, eight firms – Depaho, Reliantco, IronFX Global, WGM Services, Pegase Capital, Rodeler, Banc de Binary and Ouroboros Derivatives Trading – totalling EUR 2,072,000. It has also suspended the license of Pegase Capital. CySEC’s work is ongoing in this area.

 

Disruptive Technology Comes To UK Share Trading With First Commission Free Platform

MondoVisione

Freetrade will be launching its disruptive new platform for trading stocks and shares, which brings proven commission-free trading technology and fractional share dealing to the UK for the first time.

PLY: “Lunch is free” – why does that statement not ring true? It seems the notion remains that millennials will take up stock investing by trusting the something for nothing concept whereas I remain concerned that sooner or later this all blows up in everybody’s faces when they discover they did pay through the spread… I like fintech but I am not so convinced this is more than a short term play with a lot of ramifications.

 

Florida State Judge Rules Bitcoin Doesn’t Qualify as Money

Patricia Hurtado & Susannah Nesmith – Bloomberg

A Florida judge threw out state money-laundering charges against a man who was accused of illegally selling more than $1,500 in bitcoins to undercover detectives, concluding the virtual currency doesn’t qualify as money. Miami-Dade Circuit Judge Teresa Mary Pooler cleared Michell Espinoza in what prosecutors called the first state money-laundering prosecution involving the virtual currency.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL up 1%, Jignesh still in jail.

ED To Question FTIL MD Prashant Desai & Former Board Member Ravi Sheth In NSEL Probe

The Economic Times

The Enforcement Directorate (ED) has summoned four directors of Jignesh Shah promoted FTIL including Prashant Desai, company’s MD, and former board member Ravi Sheth in connection with the investigation in the NSEL fraud.

NSEL Case: ED Calls Five FTIL Board Members For Questioning

Business Standard

The Enforcement Directorate (ED) has summoned five board members of FTIL for questioning in connection with the NSEL money laundering case, to appear within a week. The members of the board called for interrogation are chairman, managing director and CEO of FTIL. The list also includes independent directors.

HC’s Final Hearing On Merger With FTIL After 4 Weeks

Dilip Kumar Jha – Business Standard

Once a merger is approved, the entire liability of the Rs 5,600 crore (USD 830m) of payments would come on FTIL.

NSEL: Review Meeting Held To Monitor Action Taken By Agencies For Violations Of Law

The Economic Times

A Review Meeting was held by Shaktikanta Das, Secretary, DEA, to monitor action taken by various investigating and enforcement agencies for violations of law, criminal offences and default in payments to investors on the platform of NSEL, the defunct subsidiary of FTIL.

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

Technology

Inflows or Outflows? JSE Error Triggers S. Africa Puzzlement

Neo Khanyile, Arabile Gumede & Xola Potelwa – Bloomberg

JSE Apologises For Foreign Trading Data Blooper

Ryk van Niekerk  – Moneyweb

An unprecedented error by Johannesburg SE (JSE) had everyone from stock analysts to economists and the central bank reassessing two whole months of data on the country’s investment flows.

About 70.2B rand ($4.9B) of net share purchases by foreign investors during a record run in May and June were, in fact, 36.4B rand ($2.55B) of sales, JSE said late on Sunday. JSE said the mistake was caused by a programming error and it was taking “immediate steps” to avoid a recurrence.

PLY: That pesky double entry book keeping stuff has clearly challenged JSE – whoops. New tech is claimed for a faux pas which has its origins in a system developed in Venice by Luca Pacioli in 1494 AD…

 

London FinTech Week 2016 – Innovation In RegTech: Speech By Christopher Woolard, Director Of Strategy & Competition At The FCA

MondoVisione

Products

Tokyo Commodity Exchange’s Physical Market For Gold Launched

MondoVisione

 

CME Launches Online Comparison of Futures vs ETF Costs

Shanny Basar – Markets Media

CME has launched an online tool to allow investors to compare the costs of futures against ETFs, as some ETF issuers have claimed the funds are now cheaper to use.

 

ESMA Publishes Updated Q&A On CFDs & Other Speculative Products

MondoVisione

 

Gibraltar SE Welcomes BitcoinETI

Ian Allison – IBT

The Gibraltar SE welcomes BitcoinETI an asset-backed Exchange Traded Instrument that is invested exclusively in Bitcoin, making it the first European regulated product for the digital currency.

PLY: The Winkelvoss twins just got beaten to it as Gibraltar exchange scoops the first ETP listing for Bitcoin… Well done to the Gibraltar exchange team and the various parties who brought this listing together.

Career Paths

BGC Partners announced that Dean Berry will be joining the company as an Executive MD in its Global Electronic and Hybrid Execution team.  In that capacity, Dean will join Phil Norton in leading all e-Commerce brands across BGC Partners and will report to Shaun D. Lynn, President, BGC Partners.

 

CalPERS has begun its search for a new Chief Actuary to lead its Actuarial Office and provide independent counsel to CalPERS leadership and Board on actuarial valuations, assumptions and policies, rate structure, and funding of the CalPERS System and related funds.

Financial Calendar

27.07 – Nasdaq Q2 2016 Results

27.07 – SGX Full-Year Results FY2016

28.07 – BGC Partners Q2 2016 Results

28.07 – CME Q2 2016 Results

28.07 – Euronext Q2 2016 Results

28.07 – ITG Q2 2016 Results

28.07 – Thomson Reuters Q2 2016 Results

29.07 – CBOE Q2 2016 Results

29.07 – WSE H1 2016 Report

03.08 – ICE Q2 Results

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

Share Notes

In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has sold a total of 2051 shares. New holding is 9377 shares. Employees paid a share price of NOK 85,06 per share, but were allowed a discount of 20% on purchases up to NOK 625.

Other stories

Joint U.S.-EU Financial Regulatory Forum Joint Statement

MondoVisione

 

Asia Leads Share Trading Slump

Anna Irrera – Finncial News

 

WFE Publishes H1 2016 Market Highlights

MondoVisione

Global equity trading activity dropped 24% to $44.9 trillion in the first six months of the year from $59.2 trillion a year earlier, according to figures published on July 25 by the World Federation of Exchanges. The slump was led by a 47% drop in activity in the Asia-Pacific region…

 

ISDA Publishes Hong Kong Clearing Classification Letter

MondoVisione

 

Tehran SE’s AGM In The Eyes Of A Foreigner

MondoVisione

The following note was sent by one of Tehran SE’s foreign shareholders after the annual meetings held on 17 July 2016.

PLY: Written by Stefan Kille, a prominent frontier investor leading the charge back into Iran post sanctions.

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