June 07 2016

elb2PLY: LSE and BOAT combine, as ICAP – TNT suffers an (energy) antitrust referral. DB1 CEO now argues LSE needs DB1 in the event of a Brexit – reminds me of that old feminist badge of the 1970’s: ‘a woman without a man is like a fish without a bicycle.’ Looks as if the desperation-ometer in the Frankfurt-Wimbledon bunker nexus is touching new highs.  Going back to the antitrust referral – if there are such worries about oil/energy brokers, what does that suggest for the “Merger of Equal Desperation” which egregiously bulks up on CCP monopoly and, from the look of their own investor presentation, a rapacious desire to exploit the data monopoly too… Martin Abbott looking at leading a new metals market in London to compete with his alma mater LME.

My Premium post DB1 LSE Marking The Deal is garnering a fair bit of conversation. Worth the year’s sub to EI Premium alone methinks, just $300 per user year adding neatly to the free stuff you already have here. So you get the gist of the latest analysis, here’s a free sample of the marking applied to DB1-LSE’s rather lacklustre attempt to sell the “Merger of Equal Desperation.”

DB1 Page 3 Industry Defining and Value Enhancing Combination-2

Don’t forget next week’s FESE Convention – Malta, 15/16th June, where I am chairing a terrific panel on the EU funding outlook while ICDA have their upcoming CyberRisk conference in London, July 20th: Secure a place at GBP 295 with the Exchange Invest code YOUNG295.

Public Markets

Tullett Prebon’s Bid for ICAP Unit May Face U.K. Antitrust Probe

Patrick Gower, Will Hadfield & Aoife White – Bloomberg

Statement Regarding Transaction With Tullett Prebon

ICAP

ICAP notes the statement from the CMA announcing that the proposed Transaction to dispose of ICAP’s global hybrid voice broking and information business to Tullett Prebon is being referred for a phase 2 investigation solely as a result of potential concerns in respect of the voice/hybrid broking ‎of oil products unless suitable remedies are offered.

ICAP “Confident” Will Get CMA Clearance For Tullett Prebon Deal

Reuters

QV Premium: Exchange Deals Brief – M&As.

 

Management Board & Supervisory Board of DB1 Recommend Acceptance Of The Offer Made By HLDCO123 plc

DB1

The Management Board and the Supervisory Board of DB1 recommend that shareholders of Deutsche Börse accept the offer made by HDLCO123 PLC (“HoldCo”).

PLY: When you leave a board alone inside a bunker and nobody can hear their decisions, can they still be wrong?

Analysis of the deal as proposed by DB1-LSE in their docs last week is here in Premium: DB1 LSE Marking The Deal.

DB1 CEO Says LSE Merger ‘Key’ If UK Leaves EU

Marion Dakers & James Quinn  – Daily Telegraph

Carsten Kengeter said that if the UK were to leave the European Union, the £21bn merger he is forging with his London counterpart would be essential in maintaining economic links between the two blocs.

PLY: I don’t call this the “Merger of Equal Desperation” for nothing. At the same time, Carcrash might be onto something here… Albeit, I see that a Eurozone post Brexit would be a protectionist disaster area crumbling so fast, Carcrash will need a non-EU wing  for the opposite reason.

Analysts Point To Merger Dividend At LSE/DB1 (subscription)

Philip Stafford – Financial Times

LSE & DB1 could be about to promise a special dividend after their merger in order to help convince shareholders to back the deal, according to analysts at Citi.

QV Premium: DB1-LSE Merger Brief.

PLY: Having apparently bought off the OTC Derivnet shareholders with a street sweep, now it’s time for that desperate “oh we just found some cash to distribute” ploy. Wonder if the payment will be scheduled before or after the antitrust decision…

 

CFTC Signs MOU with the ESMA Related to Recognized CCPs
CFTC

PLY: A moment of detente hopefully ends a period which has rightly seen renewed cynicism about regulators and their empire building as opposed to actually delivering a service to the public.

 

CurveGlobal Chief Andy Ross Targets September Launch

FOW

PLY: Trebles all round, Rita-Curve continues to pay its regiment.

 

Former LME CEO in Talks to Start Metals-Trading Platform

Agnieszka De Sousa & Eddie Van Der Walt – Bloomberg

A study group is being formed to explore the potential for a metals marketplace that could include an exchange, Martin Abbott, former CEO of LME said in a phone interview on Monday. It follows months of discussions between brokers and other users about the need to to build an alternative to existing venues, he said.

PLY: Interesting. The battle is on in all forms of metals, it seems…

 

Bats Europe May Set Up EU Office Outside UK In Event Of Brexit

Atul Prakash – Reuters

Bats Europe may consider setting up a second office elsewhere in the EU if Britain votes to leave the EU later this month, its CEO, Mark Hemsley, said.

PLY: Logical defensive hedge. Albeit, on a broader sweep, the crazed hysteria of the UK dropping out of EU regulation at the drop of a hat is not merely shamefully illogical, it is in fact helping the Europhiles push voters to the exit camp…

 

The SEC Could Be About To Destabilize The Stock Market

Keith Ross, Jr., PDQ Enterprises – Business Insider

Public confidence in the stock market is eroding.

PLY: The millisecond argument may be highly plausible but for the average man in the street it just doesn’t play out – it’s like those demonstrations of the size of the universe based on a peanut in Johannesburg and a satsuma in Bermuda… The industry has not broken its arguments down coherently enough yet to make an impact against the perception that low latency, systematic internalising, payment for order flow, Wall Street is feathering its own nest.

 

Multi-Venue Trading Increases Liquidity In EU Equity Markets Despite Duplicate Orders, ESMA Says

MondoVisione

PLY: Competition is good for markets and consumers. Good to have some confirmation even if it may rankle some of the EU’s blobsters.

 

IRS Says Fines Paid to Finra Aren’t Tax-Deductible (subscription)

Michael Rapoport – Wall Street Journal

Fines paid to Finra aren’t deductible just as fines paid to the SEC aren’t, the IRS said in a memo from its associate chief counsel’s office released Friday.

PLY: Finally it appears there is something not tax deductible in the USA….

 

ESMA Updates Its EMIR Q&A

MondoVisione

Private Markets

Taiwan SE Seeks To Develop Links Across Asia

Allen T. Cheng – Institutional Investor

CEO Michael Lin pursues new links with SGX, seeks Tsai government maintaining positive relations with China.

 

Market Making Set To Return To ADX

Reuters

Market making is set to return to the Abu Dhabi stock exchange (ADX) later this year.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL up 1%

Brokerages Face Sebi Fire In NSEL Scam

Shrimi Choudhary – Business Standard

Market regulator asks third-party auditors to conduct forensic audit as brokers’ order books don’t tally with those of the exchange.

PLY: I haven’t mentioned the classic chief of police remarks during that bar scene in Casablanca for some time…

Technology

Shenzhen Stock Exchange New Generation Trading System Goes Online

MondoVisione

 

Nasdaq To Unleash The Machines On Insider Traders Through Smarts Investment

Vesna Poljak – SMH

Nasdaq aims to roll out “machine learned” market surveillance technology in two years to detect suspicious trading patterns in what could be the biggest blow yet to market manipulators and insider traders.

PLY: The SMARTS system designed by the good offices of Professor Mike Aitken acquired by NASDAQ in 2010, is the core of the NASDAQ surveillance effort.

 

​TTC & RHT Compliance Solutions RHT – Collaborative Partnership

​TTC & RHT

PLY: Alex Lamb and a cast of many names known to the parish have formed ​The Technancial Company (TTC) which is partnering with RHT Compliance Solutions (RHT) to aid regulatory, legal and compliance frameworks.

 

Japan’s Financial Services Agency: Establishment Of “Payments Council On Financial Innovation”

MondoVisione

Products

LSEG & Boat Services Launch TRADEcho – New Multi-Asset Class MiFID II Trade Reporting Solution

Cinnober

TRADEcho brings together LSE and Boat Services’ existing trade reporting services. Pre & post-trade solutions will cover all MiFID II asset classes. Complements LSEG’s UnaVista’s MiFID II transaction reporting service.

PLY: A coherent deal for both parties, offers variation for LSE and an interesting new future for BOAT.

 

SEC Moves to Curb Leveraged ETFs (subscription)

Dave Michaels – Wall Street Journal

During a deregulatory heyday a decade ago, the SEC approved a type of ETF allowing mom-and-pop investors to try to double or even triple the daily return of stock markets or bet on such swings in the opposite direction.

 

Nasdaq IR Insight Boosts its Services & Technology Capabilities with New Analytical Suite

Nasdaq

Indexes

New Green Revenues Model From FTSE Russell Tracks Global Transition To A Green Economy

LSE

PLY: In other news, anybody seen any global warming lately?

Career Paths

Eduardo Refinetti Guardia, BM&FBOVESPA Chief Product Officer, has announced his decision to leave the Company as of June 13, 2016. He accepted the invitation to become Deputy Minister of Finance.

The functions of Chief Product Officer will be temporarily exercised by Cicero Augusto Vieira Neto, COO.

PLY: Good luck to Eduardo Guardia as he works to rebalance the Brazilian finances ravaged by political upheaval and the Zika virus amongst other problems…

The BoD of the Nairobi Securities Exchange (NSE) appointed Mr. Samuel Kimani as the new Chairman of the Board, effective from June 6, 2016. Mr. Kimani, takes over from Mr. Eddy Njoroge, who stepped down from the Board on June 2, 2016 after 9 years, (6 as Chairman).

The Board also re-elected Mr. Bob Karina as Vice-Chairman.

Shareholders also re-elected Ms. Sharon Maviala and Mr. Hosea Kimutai Kili as Non-Executive Independent Directors, and elected a new entrant- Mr. Paul Vollant. The appointment of Mr Paul Vollant is subject to his clearance by the CMA.

UK’s Martin Wheatley Touted As ASX CEO Contender

Sarah Thompson, Anthony Macdonald & Joyce Moullakis – AFR

Street Talk understands that one candidate featuring high on headhunter Korn Ferry‘s list is former chief of the UK’s FCA, Martin Wheatley. Internal contenders include Peter Hiom, ASX’s deputy CEO.

ASX CEO Elmer Funke Kupper resigned in March after allegations he knew of a $200,000 payment to the family of Cambodian Prime Minister Hun Sen made by gaming giant Tabcorp when he was CEO.

PLY: Will Peter Hiom remain the bridesmaid? Curious to see Martin Wheatley on the list although some might suggest he has the arguably prerequisite swaggering arrogance to be ASX CEO.

Financial Calendar

07-08.06 – FIA IDX

10.06 – CFTC Division of Market Oversight – public roundtable meeting, to discuss certain elements of the Commission’s notice of proposed rulemaking (NPRM) regarding Regulation Automated Trading

10.06 – Record date CME $0.60 Q2 2016 dividend  

10.06 – Record date Nasdaq $0.32 quarterly dividend

10.06 – TMX $0.40 dividend payment

22.06 – WSE AGM – amended agenda

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

 

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