June 18 2013

elb2 While the Irish Presidency is congratulating itself on its ‘breakthrough’ with MIFID II etc the unfortunate truth is that unless there is a mega-change at the finance ministers’ ‘likely nod-through’ or in Triologue, this legislation is likely to be mired in court action, The UK has hit back for free markets against the Stalinist concept that only the Eurozone can clear Euros (shades of the stupidity of the JFK withholding taxes which creating the Eurodollar market).

All to play for, lot’s happening, enjoy the read…

Public Markets

EU Said to Raise No Objections To ICE Takeover Of NYX

Businessweek

European antitrust regulators have lodged no objections to IntercontinentalExchange (ICE) Inc.’s takeover of NYSE Euronext (NYX) as a decision on the transaction approaches.

PLY: So the commodity issue appears to be of no significance after all. ICE-NYX is one step closer…

Britain Wins Safeguard In EU Rules Deal

4-traders

Britain won backing from its European Union partners on Monday to prevent parts of its financial services sector potentially having to relocate to the euro zone.

Britain is already taking the European Central Bank to the bloc’s highest court for its policy of requiring clearing houses which help process a significant amount of euro-denominated transactions to be based in the single currency area.

PLY: So the UK has clipped the wings of ESMA and EU to define where markets happen or are cleared which is progress but ultimately we are closer to legal action on multiple fronts I fear. The suicidal bid to destroy European’s pension funds through swingeing restrictions on Institutional Liquidity Pools trading blocks continue to be not only proposed but hailed as an achievement! Frankly I am ashamed to be Irish today given the profound ignorance of whoever negotiated this shambolic ‘breakthrough.’

Relaxed Japan Short-Selling Rules To Be Permanent From November

Businessweek

Rules making it easier for investors to short Japanese stocks will become permanent in November.

PLY: More liberal short selling rules permit more liquidity. Progress in Japan.

ICE Adds Interval Price Limit Circuit Breaker

The TRADE News

ICE Futures US today launched interval price limit (IPL) functionality on futures contracts; a temporary circuit breaker to help reduce the likelihood and effect of short-term price spikes or unusual market movements.

Prosecutors Probe Market Manipulation On Frankfurt Exchange

Reuters

German prosecutors are investigating possible market manipulation of some individual shares on the Frankfurt Stock Exchange by liquidity providers artificially inflating order volumes for small and midcap companies.

How CBOE’s New Boss Differs From The Old Boss (subscription)

Crain’s Chicago Business

While few expect Ed Tilly to make major changes in the company’s direction, there could be day-to-day differences, particularly in handling the newly sensitive topic of regulation.

PLY: It will be fascinating to see how Ed Tilly evolves as a CEO. Bill Brodsky has been marvellous at process and management but lacked vision. Hopefully Tilly can make the case for CBOE to be more than just a market waiting to be bought by CME Group.

Will Sebi Ever Fine Indian Exchanges?

Livemint

In India, stock exchanges have received censures from Securities and Exchange Board of India, or Sebi, (hardly ever publicly); but they have never been fined. Regulators are generally reluctant to impose financial penalties on stock exchanges, because of an underlying belief that this will shake investor confidence. The stock market plays the important economic role of aiding Indian companies raise equity capital; large monetary fines on stock exchanges, however, may reinforce concerns that the stock market is run like a casino.

PLY: An interesting comparison between the USA where the SEC has been very active in fining exchanges having only begun the practice about 9 months ago…

Private Markets

UAE Revives Bourse Merger Proposal

Peninsula On-line

The United Arab Emirates has revived a proposal to merge its two main stock exchanges in a state-backed deal. Talks between the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) have occurred on and off since at least 2010.

PLY: One UAE exchange could be a move in the right direction. At the same time, neither exchange really gives the impression that it wishes to be the agent of corporate development at the heart of a potentially pulsating post-recessionary economy. There is a great deal of opportunity in the UAE, a merger doesn’t address that.

Technology

Markit Acquires Corporate Actions Validation Service From DTCC

Markit, a leading, global financial information services company, today announced that it has acquired the assets of Global Corporate Actions Validation Service (GCA Validation Service), a leading provider of high quality, validated corporate actions data, from the Depository Trust & Clearing Corporation (DTCC).

The acquisition expands Markit’s reference data offering and the company’s ability to provide managed services to the global financial markets.

PLY: A canny purchase from Markit, adding value to their asset base.

Products

ICE Sees Late Trade In Credit-Default Swap Futures (subscription)

Wall Street Journal

IntercontinentalExchange’s futures tied to credit default swaps traded Monday afternoon in their market debut, after seeing no trades earlier in the session.

PLY: After several hours of eerie silence it looked as if it might be EUREX pre-Lehmann all over again but fortunately late in the day some trading was done… It will be interesting to see how this product develops, at least it has started trading…

Day In Derivatives (subscription)

Futures and Options Intelligence

Eurex will be rolling out a second wave of derivatives contracts based on the MSCI indices at the beginning of July. The products will be introduced three months after the initial offerings were launched on the European exchange.

Indexes

Nasdaq BulletShares Indexes Announced

IndexUniverse.com

The NASDAQ OMX Group, Inc. (Nasdaq: NDAQ) and Accretive Asset Management, LLC. today announced a new partnership involving Accretive’s innovative BulletShares®Corporate Bond Index family. NASDAQ OMX and Accretive have agreed to co-brand the indexes and work jointly to promote the BulletShares concept around the world.

Changes in investors/shareholders

Hellenic Exchanges S.A.: Notification About A Significant Change In The Number Of Voting Rights

JPMORGAN ASSET MANAGEMENT HOLDINGS INC. informed the Company in writing on 07.06 and 11.06.2013 that, because of a triggering transaction on 04.06.2013 it indirectly holds, through its subsidiary JPMORGAN ASSET MANAGEMENT (UK) LTD, 5.06% of the share capital of HELEX.

Crowdfunding

Crowd Funding Arrives In The Isle of Man

International Finance Centre

Nicole Bodell, founder of www.letscrowdit.com has launched a multi-faceted crowdfunding platform servicing the 80,00 population of the Isle of Man…

Crowdfunded Real Estate Limitations

Wall Street Pit

The crowdfunding phenomenon is now taking on real estate investing. Sites like RealtyShares and iFunding are enabling small-time retail investors to become silent partners in projects they could not otherwise afford. Passive investments in real estate have been around forever in the form of limited partnerships. Crowdfunding things like trust deeds just lowers the entry barrier. It does not change the threshold for due diligence.

Other stories

How the Triborough Bridge Led Me To An Investing Epiphany

Globe and Mail

My investment thesis for CME is simple.

I cannot tell you if oil is going to outperform gas. I don’t know if platinum will outpace pork bellies. I have no idea – okay, almost no idea – about whether interest-rate futures are a better bet at the long end or the short end of the curve. I hold no opinion on the direction of the yen, the euro or the yuan.

But here’s what I do know. The CME trades them all – interest rates, credit, foreign currencies, energy, metals and nearly everything in the agricultural space. And it gets paid whether the investor behind the transaction makes money or not.

How profitable is the business? Very. In 2012, it reported an operating margin of just under 60 per cent. Certain products, such as S&P E-mini futures, are only traded on its exchange. (For oil, agricultural and other commodities, currencies and equities futures, the CME competes against other exchanges, including the Intercontinental Exchange.)

PLY: A useful primer…

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