JUNE 14 2017

Welcome to Issue 1015 of Exchange Invest and good to have you back lest you spent the past 4 days immersed in the 96 hour Katie Perry live stream. Choosing a corresponding chassis of the day takes me to an early (Cord pre-selector transmission) moss green coloured Tucker of 1951. Marvellously elegant beast, as featured in the eponymous George Lucas film which is of course a wondrous lesson for tech innovators everywhere (and nowhere more so than in fintech): The incumbent big beasts have all manner of legacy power at their fingertips to preclude your innovations surviving into the mainstream.

Prosperity UK Video

More relevant than ever given the overnight news, the Prosperity UK Panel – Brexit, Euro Clearing & Financial Market Structure: panel ably chaired by Barney Reynolds headlining parish luminaries Jeff Sprecher and Michael Spencer and PLY lurking…

In Today’s Exchange Invest

Euro clearing is the major order of the day today as the EU produces proposals which avoid the nuclear button but set up a tense negotiating scenario for the delivery of either a global trade war and capitulation to Euro-protectionism or the status quo of successful economic competition.

On that topic, the UK’s leading free markets/thinking blog Capx yesterday published my outline to try and aid understanding for the lay folks and non clearing pros alike: “The EU’s Clearing Plan Is An Act Of Protectionist Self-Harm.”

And there’s more, happy scrolling:

In BigWorld

Fascinating day in Bigworld, even beyond the ongoing immolation of British politics, with President Macron reaching peak smug by suggesting the British can stay in the EU (clearly the new spin on “Liberte! Egalite! Fraternite!” is now one of “shut up and do what the ancien regime wants, there’s cake a the back if you’re peckish”).

While Theresa May continues to skate on thin ice in Britain, the latest Canadian scaremonger tour promoting global warming has, embarrassingly enough, been cancelled due to the thickness of ice precluding much in the way of summer sailing on the upper reaches of the Hudson Bay. Naturally the closed minded scientists blame “climate change” which leaves them as well plugged in as the hubristic Mr Macron. Clearly the one casualty of the climate change cult has been any vestige of lateral thinking.

Public Markets

The EU’s Clearing Plan Is An Act Of Protectionist Self Harm
CapX

PLY: Frustrated by the lack of a sound basic article which outlines the core issues in the Euro clearing debate, I contributed this to the excellent pro-free market British blog site CapX, founded by the Centre For Policy Studies think tank.

EU To Tighten Grip On Euro Clearing After Brexit
Reuters

“Simon Gleeson, a regulatory partner at international law firm Clifford Chance, said there is no question of UK clearing being forced to relocate.

“The issue is whether and to what extent the EU wishes to prevent EU banks from clearing euro trades outside the EU,” Gleeson said.

“I think what is really going on here is the EU trying to create a bargaining chip that it can employ to get a more substantial say in the way that London clearing is regulated post-Brexit.”

The draft law will need approval from EU states and the European Parliament, with changes likely.

“The Commission has lost its courage when it comes to euro clearing. The rule must be that euro clearing must be done under EU jurisdiction, no ifs or buts,” said Markus Ferber, a vice chair of the parliament’s economic affairs committee.”

PLY: Markus Ferber continues into the valley of the deranged (a common side effect of prolonged membership of the EuroParliament) while Simon Gleeson sounds spot on.

UK Government Complacent As Europe Launches New Raid On London
BBC News

PLY: A BBC Business correspondent, Simon Jack spoke at IDX last week. Here he quotes Jeff Sprecher whose frustration is self-evident with the corroded concept of British infrastructure for investment encouragement (the smug remainanian pillocks of the Corporation of London deffo need to bear their element of blame here but overall the British government is abysmally analogue in the modern digital age).

From the article, Jeff Sprecher at IDX last week: “Countries around Europe are trying to attract us to move our business out of London – they are offering relocation packages, low tax rates, light regulation – you name it.

“At the same time President Trump is asking us how he can help us grow our business. Those conversations are not going on here (in the UK). As a business leader here, I wish I had a better relationship with government. Just to hear the words ‘we want your business, we want you to stay here’, but that’s not happening at the moment.”

EU Clearing Row Shows Limits Of UK Taking Control
Reuters

PLY: “Breaking Views” was founded by one of the most drippingly pro EU remoaners and the project retains a complete incapacity for reasoned thinking. Whatever possessed Reuters to buy them is a moot point. At its core Reuters remains an unbiased news source – however this is inaccurate drivel which brings shame on the reputation of the Baron. This piece is even poor compared to the dismal standard of Bloomberg’s scribblings on Brexit.

PLY: Takeaways for the day:

The UK government framework is not fit for purpose (not news, Britain has not had a coherent government for at least a decade);
The EU is not fit for purpose but at least is held together by a vague sense of purpose (more Europe at all costs, ignore the great unwashed) and a vague sense of mortality (which escapes UK gov);
So far the clearing proposals are not overly prescriptive and provide a base for coherent negotiation. However, trust is low and the danger is the EU will after the initial agreement continue to ratchet up what looks currently like a basis for agreement on information sharing as the maintenance of the Euro is in all parties interests.

Private Markets

Algo-Trading Case: Sebi Asks NSE Why It Didn’t Cooperate In Probe On Unfair Access
Livemint

MMMTC To Exit ICEX, Starts Process To Divest 9.5% Stake In The Exchange
Business Standard

State-run trading company MMTC has initiated the process of divesting its 9.55 per cent equity in the Indian Commodity Exchange (ICEX).

Insight: A Financial Lesson From Jamaica
Bahamas Tribune

PLY: Interesting comparison of Jamaica JSE with the Bahamas BISX.

Liv – Ex Makes Lwin Free ‘Forever’
The Drinks Business

Liv – ex the Fine Wine Exchange has announced that its LWIN system has been given a Creative Commons licence and is now completely free.

PLY: This is Live-ex’s attempt at a wine ISIN.

Special Section: FTI, NSEL, India at the Crossroads

No news today.

Technology

I am at an EU Presidency IT conference today discussing IT Professionalism. After an hour of simply the worst Powerpoints I have seen for ages, any sentiment on #EU surviving the digital age looks low.

Products

Nasdaq Seeks To Block Bats Push For Market -Close Orders
Reuters

Sebi Permits Options Trading In Commodity Futures
Livemint

Sebi Allows Options In One Commodity Per Exchange
Business Standard

NFEX And LME To Do Battle Over Use Of Settlement Prices
Metalbulletin.com (subscription)

The Non-Ferrous Exchange (NFEx) is looking into the prospect of using London Metal Exchange prices to settle its trades, but could face a battle to do so…

PLY: What next, will Martin Abbott ask Matt Chamberlain to post over a few shirts?

Nigerian SE To Launch Exchange Traded Derivatives
The Nation Newspaper

B3 And S&P Dow Jones Indices Launch S&P/ Bovespa Non-State Owned Enterprises Index
Exchange News Direct

Career Paths

PLY: Remarkably it’s time for the actual AGM of the GPW, which a parishioners know, is generally peppered with a horde of EGMs in the interim, you can find the notices here including the appointment of Jarosław Grzywiński as Vice President of the Exchange Management Board.

Vikram Limaye’s Impending Exit Big Loss For BCCI COA
Hindustan Times

PLY: Indian cricket mourns the loss of the new NSE boss…

Matt Dellarocca Joins LMAX Exchange
LMAX Exchange

PLY: and finally today, following the general election where the Labour Party won a stunning landslide re-election, the Finance Minister Professor Scicluna has reappointed Chairman Joe Portelli and the board of the exchange – good news for all parties involved as the Maltese capital action plan moves forward.

Crowdfunding

Seedrs Hails ‘Successful’ Debut For Secondary Market
The Scotsman

Other Stories

U.S. Plans Threaten To Undermine Global Bank Reforms
Reuters

PLY: America first

Countries Where A Stock Exchange Operating Within The Law Of That Country Is HMRC Recognised
Gov.uk

PLY: Instructive given how few there actually are, only 16 countries…

Ray Kurzweil Says He Wouldn’T Put His Money In Bitcoin But Doesn’T Dismiss Blockchain
Futurism
Renowned author, futurist, inventor and Google’s head of engineering, Ray Kurzweil, spoke on his reticence to embrace bitcoin . He is not the only …

BSE -Listed Cos Witness A High-Profile Resignation Every Nine Days: Report
Moneycontrol.com
Enjoy a sunny day, even if it may be sunnier in Malta.

All the best,

Patrick

Patrick L Young
Executive Director DV Advisors