June 11 2015

elb2 The main business of IDX has ended and the global futures camel train starts heading in a disparate series of destinations…while some are still rattling around London. Out of all delegates, some sort of plaudit must go to the truly indefatigable John Lothian, whose daily newsletter has long been the ‘go to’ for anybody with any involvement in the futures business. Fresh from a few new parts being added to his increasingly digital corpus, he had to fly home as his wife suffered an appendicitis. Best wishes to all parties concerned.

This AM there will be a lot of counting to work out the totals on the Futures for Kids gala last night. Amongst others on the team, a huge tribute must be paid to the truly indefatigable David Setters who leveraged much of the old FOW team to help raise funds.

A great job at IDX by FIA. Another fabulous event although, as I have long said, the City of London’s lack of a world class conference venue is very disappointing. Years ago this event used to take place in the Barbican which remains, as I said at the time, “the Guantanamo Bay of conference centres” despite the best efforts of organisers to render it more human. The Brewery is a tad small for the 1500+ attendees – with some stands now apparently in air conditioning ducts and broom cupboards. I began feeling a bit like a lab rat as I sped around some of the warrens between events. Not the FIA’s fault, this is infrastructure the City of London desperately needs to consider to promulgate its world class financial centre status. FIA IDX is merely a victim of its own success in “a derivatives world.”

Hmmm, perhaps we ought to crowdfund a solution?

Exchange Invest Premium, is on a roll discussing market failures, oversights and ugly stuff this week which I expect will roll into next week too:

New! Will the Plus500 Takeover Survive?

New! Dear Carsten – An Open Letter to the New DB1 CEO

Meanwhile, Premium Briefs keep you abreast of various industry issues, updated daily, condensing past stories from our daily bulletins. All topics covered can be found on our dedicated Briefs page via Exchange Invest Premium.

The latest include:

Plus500 Turmoil & Deal – Brief – Part 1 New!
SunGard IPO Brief
HKEx – SSE – Stock Connect Brief Part 4
BBY Collapse – Brief 
Saudi Arabia Opening Capital Markets – Brief 

Our Premium service is a unique source of industry insight in a low latency environment if you like. Can you afford not to be a subscriber? $120 per user/year helps keep Exchange Invest daily Free. Subscribe here or reply to this email and I will invoice you forthwith.

Today in Exchange Invest:

Odey opposes the Playtech bid for Plus500, setting off a disagreement with management as the leveraged soap opera continues. Jefferies pares KCG stake as regulators ponder CCP probity without too much thought given to open access proposals….and, as always, much more, right through to Vietnam’s new derivatives laws…

Public Markets

Plus500 – Odey Asset Management Opposes Teddy Sagi’s Offer
Globes

Plus500’s Management Were Paid £14 Million On The Same Day Thousands Of Customer Accounts Were Frozen
Oscar Williams-Grut – Business Insider

Crisis-hit trading firm Plus500 paid out $US23 million (£14.8 million) to executives on the same day it froze thousands of customers’ UK trading accounts under orders from the financial watchdog.

A final dividend and special dividend worth a combined $US65 million (£42 million) were paid to shareholders on May 15, according to company filings. Plus500’s management own 35% of shares in the business, meaning they would have taken home $US23 million of the payout.

Read our Premium post Will the Plus500 Takeover Survive? and Plus500 Turmoil & Deal – Brief – Part 1

Jefferies Pares Stake In Market-Maker KCG As Rescue Reaps Profit
Zeke Faux & Sam Mamudi – Bloomberg

Jefferies Group reduced its stake in market-maker KCG Holdings Inc. as the investment bank disposed of 6.53 million shares in the firm it helped rescue in 2012. The shares were sold at $14 apiece, according to a regulatory filing Wednesday. KCG rose 0.3% to close at $13.48 in New York and has climbed 16% this year. Jefferies, sold the stock back to KCG as part of a tender offer in which KCG purchased 23.6 million of its shares for about $330 million.

Read our Premium Exchange Deals Brief

Regulators See Slow Progress On Who Pays For Failed Clearing House
Huw Jones – Reuters

Global regulators have yet to agree on who would pay the trillions of dollars that would be needed to bailout any failed clearinghouse for derivatives.

“We must start looking and be prepared for the possibility that a globally important CCP could enter into default,” Patrick Pearson, a senior European Commission official involved in the drafting, told IDX.

PLY: My point precisely. As Patrick Pearson says: “What happens after the waterfall?” Into the midst of this unresolved issue, which requires a lot, lot more thinking by lateral and linear heads, there is also an ill-considered move to create open access clearing (whatever that actually means: it’s a kind of oxymoron in practical terms). So, CCPs could be a problem if one goes down but the EU is busy trying to ensure everybody can pipe their own flammable liquids into any CCP gasometer. Er…

Asia Appeals For Exchanges As Regulators Get Bogged Down (subscription)
Philip Stafford – Financial Times

For delegates gathering at IDX in London this week, there were two main items on the agenda; regulatory clarity and growth.

PLY: Also known as ‘confusion and preparations to leave Europe.’

HM Treasury & The Bank Of England: Fair And Effective Markets Review Releases Final Report
MondoVisione

FINRA May Cut Or Drop Fees For Dark Pool Reports
John McCrank – Reuters

FINRA may cut the fees it charges to professional users, like banks, of its weekly report on off-exchange trading volumes in order to make the information more accessible following industry complaints.

Private Markets

Vietnam – New Laws To Govern Derivatives Sector
Viet Nam News

The Prime Minister last Friday issued Decree 42/2015/ND-CP on derivatives and the derivative trading market in Vietnam, which will become valid next month. Under the new decree, companies that trade derivatives for profits on the derivative trading market must have at least VND600 billion (US$27.8 million) in chartered capital.

Brokerage firms on the new market should have at least VND800 billion ($37 million) in chartered capital and will be allowed to trade derivatives for their own profits.

PLY: Those strike me as enormous numbers for the local market.

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL flat, MCX down 2%.

Technology

Amman SE, Muscat Securities Market, Beirut SE & Bourse De Tunis: UTP-Hybrid Project – UTP-H User Group Meeting With Euronext In Paris
MondoVisione

Neonet Launches New Liquidity Seeking Algorithm – “Capture” The Latest Addition To Neonet’s Algorithmic Trading Suite
MondoVisione

JPX Published An English Version Of JPX Working Papers, Vol.9 “Impacts Of Speedup Of Market System On Price Formations Using Artificial Market Simulations”
MondoVisione

Products

Euroclear’s SetClaim To Transform Payment Claims Management – SetClaim Offers Much-Sought Efficiency, Transparency, Client Service & Funding Optimisation To The Capital Markets’ Back Office
MondoVisione

ESAs Consult On Margin Requirements For Non-Ce‎ntrally Cleared Derivatives
MondoVisione

Career Paths

FOW reports that Nigel Manthorp and Malcolm Baker, two senior FX directors at CME, have stepped down from their London-based roles.

Trading Block, a fintech and services holding company and parent company of AOS, which does business as TradingBlock and MoneyBlock, appointed Paul Finnegan as CEO.

PLY: Good to see Paul Finnegan who I first met when he was at CBOE, hmmm, some years ago, moving onwards and upwards!

The Global Legal Entity Identifier Foundation (GLEIF), supporting the global rollout of the legal entity identifier (LEI), appointed Karla McKenna as its new Head of Standards.

Financial Calendar

This week

HKEx second annual RMB fixed income and currency (FIC) conference – June 11
Record date Nasdaq $0.25 quarterly dividend – June 12
TMX $0.40 dividend payment – June 12

New announcements

CME Q2 2015 Financial Results – Thursday, July 30, 2015

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

Share Notes

BGC Partners Director Stephen T. Curwood sold 4,000 shares Monday, June 8th at an average price of $9.16 (bargain $36,640.00).

Analyst Notes

Stifel Upgraded LendingClub From “Hold” To “Buy” – $25 Price Target
LendingClub Upgraded By KeyBanc Capital Markets To “Overweight” From “Sector Weight” – $23 Price Target

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

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

Crowdfunding

China’s Leading P2P Lender Delays IPO In Favour Of Innovation (subscription)
Kwong Man-ki – SCMP

Securities Commission Malaysia Advances Greater Inclusivity In Market Based Financing – Six Equity Crowdfunding Platforms Registered
MondoVisione

PLY: Good progress.

Other stories

Japan’s Financial Services Agency: The Exchange Of Letters On Cooperation With SEC Of Cambodia
MondoVisione

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