June 20 2013

elb2 Heading out of Frankfurt soon after a fascinating dinner with a key MEP last evening. Competition, Evolution and Regulation are the key themes in today’s news. Also, a pragmatic partnership agreement that ought to benefit both exchanges…

Public Markets

New Brazilian Exchange, ATS Brasil, Poised To Start In 2014

Forex Magnates

PLY: The battle for Brazil is going to be one of the most fascinating competitive frontiers for the next few years. BM&F Bovespa have merged their way to a remarkable monopoly at front and back in equities and futures/options but how they will cope with the sudden rush of competition will be a defining issue for them.

ATS Brasil created by ATG and NYX is preparing for launch in 2014, it will be interesting to see how the local political and regulatory environment deals with their application. Certainly the competitive thrust ought to benefit customers.

HKEx Says ‘Cash Only’ For New Products (subscription)

South China Morning Post

PLY: With rents sky high, HKEx are reluctant to open warehouses. It will be interesting to see how this impacts the markets themselves which could clearly suffer some added volatility through being cash settled…

Private Markets

Carbon Rescue Plan Wins Support Of EU Parliamentary Panel

Businessweek

A panel of EU lawmakers approved a watered-down rescue plan for the world’s biggest carbon market, after a record surplus of emission permits pushed prices to an all-time low.

Carbon allowances for December fell after the European Parliament’s environment committee voted for a change to EU law that would allow delaying the sale of some carbon permits in an effort to support prices.

PLY: By the time the lumbering EU bureaucracy ‘solves’ their carbon market problems, I suspect we will have moved on from being concerned about the theory of global warming…

Products

Moscow Exchange Via Deutsche Börse Partnership To Introduce Five German Single Stock Futures

4-traders (press release)

Moscow Exchange and Eurex will trade single stock futures on 5 well-known German companies on Moscow Exchange as of September 2013.

PLY: Deutsche Bank, Siemens, BMW, Volkswagen and Daimler are all good names with global cachet and likely to prove an interesting option for Russia’s massive retail trading community. Remember, the Moscow Exchange has long been one of the largest venues for SSFs world-wide. A sensible cooperation for both exchanges.

Technology

CameronTec Signs CEE Stock Exchange Group

Finextra

CameronTec, the global standard in connectivity technology and trading infrastructure today announced that CEE Stock Exchange Group (CEESEG) has selected the Catalys line of products.

Indexes

NYSE Euronext Launches CAC 40® Ext Index

NYSE Euronext (NYX) is adding the CAC 40® Ext, which tracks the market’s benchmark CAC 40®, but with extended calculation and distribution hours – from 8.00 am to 6.30 pm CET compared with 9.00 am to 5.30 pm CET for the CAC 40®. The CAC 40® Ext index is calculated on the basis of CAC 40® index future traded on the NYSE Liffe exchange, adjusted for dividends and interest payments.

Crowdfunding

Indiegogo Mulls Equity Crowdfunding, But Only If Rules Won’t ‘Stifle Innovation’

Ottawa Citizen

PLY: An interesting piece. Many entrepreneurs have been waiting for the equity crowdfunding regulations to evolve into something which will either kill the exciting concept or allow it to run in a reasonable, regulated fashion. At the same time, the industry has exploded in size to such a degree that actually regulating it now is going to be hard without an incredibly ruthless crackdown which could make government look like the enemy of commerce.

Pragmatic and simple regulation is urgently required but so far despite the JOBS act, the US has not codified their proposals and the Canadians are like many other nations, awaiting news. This uncertainty is not good – similarly the EU is trying to act (and in a sensibly light touch way) but some nations have already taken a harder line, while the UK has effectively tried to fit crowdfunding into the FCA’s existing system.

Other stories

ESMA Publishes Compliance Table For Guidelines On Market Making

The European Securities and Markets Authority (ESMA) has published a Compliance Table in relation to its Guidelines on Exemption for market making activities and primary market operations under the Short Selling Regulation. The table indicates which national competent authorities have declared that they comply or intend to comply with the Guidelines and which do not comply.

Africa: Commodity Exchanges Catch On (subscription)

Financial Times (blog)

Nigeria’s agriculture minister Akinwumi Adesina hopes that the privatised bourse will increase the efficiency of the agricultural sector.

CME Group Announces Partnership With 4-H Council

The Options Insider

The CME Group Inc. (NASDAQ:CME) announced on Wednesday that it has entered a partnership with the National 4-H Council, connecting the exchange’s work to the local level of the 4-H mission.

The two entities have developed a “Commodity Carnival” together, which will increase the public’s understanding of the important role of agriculture commodities and future hedging play in successful farming, according to a press release. In an interactive initiative, it will emphasize what it takes to successfully manage the risks in bringing them to market while building agriculture literacy nationally.

PLY: Only good can come of any initiative where exchanges endeavour to help the public understand what they do. A good move by CME.

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