June 20 2016

elb2The great news Friday night was that the SEC has been convinced and the Flash Boys have their exchange licence. Plaudits, to Brad, Ronan and all the IEX team. Now, let’s see how this plays out.. Exciting times and opportunities abound.

Meanwhile in BigWorld, Toyota’s last minute loss in the 24 hours of Le Mans to Porsche was heartrending. This wasn’t an 11th hour defeat, it was a loss at the 50-somethingth minute of the 24 hour… Makes you wonder how folks will feel after the referendum. Lots of Sterling being talked lower media reporting: which is remarkable as UK exports might yet have a boom on Brexit such is the competitiveness of the Pound…

A big week lies ahead. The only thing I can be sure of it that I doubt it will turn out quite as we expect.

Public Markets

SEC Approves IEX Proposal to Launch National Exchange, Issues Interpretation on Automated Securities Prices

SEC

Letter From Brad Katsuyama, CEO, Investors’ Exchange LLC (IEX)

MondoVisione

SEC Approves IEX As National Stock Exchange

Chuck Mikolajczak – Reuters

IEX Outduels Citadel, NYSE as ‘Flash Boys’ Exchange Approved

Annie Massa & Nick Baker – Bloomberg

IEX Wins Battle To Become An Exchange (subscription)

Nicole Bullock – Financial Times

IEX has won its battle to become an exchange, ending a controversial fight that divided the US equities industry and marking a sea change in the way stocks will be traded.

IEX’s Next Challenge: Delivering on Its Promises (subscription)

Dave Michaels – Wall Street Journal

PLY: A delightful piece of news which rounded out Friday. Congratulations once again to Brad and the entire IEX team, a great result all round and now we have a fascinating opportunity to watch this experiment in market structure develop.

 

ICE To Acquire Majority Equity Interest in MERS & Build Updated Mortgage Registry Infrastructure

ICE

ICE will acquire a majority equity position in MERSCORP Holdings, owner of Mortgage Electronic Registrations Systems. In addition, ICE and MERS have entered into a software development agreement to modernize and enhance the MERS System. MERSCORP Holdings owns and operates the MERS System, a national electronic registry that tracks the changes in servicing rights and beneficial ownership interests in U.S.-based mortgage loans.

The transaction is expected to close at the end of June. Under the agreements, ICE will rebuild the MERS System infrastructure and is expected to shift its operation to an ICE data center in H1 2018. Price and terms of the transaction are immaterial to ICE, and were not disclosed.

PLY: Another fascinating big data play by ICE while at least 2 other possible competitors are not paying attention.

QV Premium: Exchange Deals Brief – M&As.

 

Brexit Could Derail LSE-DB1 Merger (subscription)

Eyk Henning – Wall Street Journal

LSE Should Be Based In Frankfurt If Britain Quits EU, German Politicians Say

Daily Mail

PLY: #Obvious rejoinder as I have noted in the past, including as recently as last week.

QV Premium: DB1-LSE Merger Brief.

 

Firms Launch Bids For Piece Of Thomson Reuters

Josh Kosman – NY Post

BC Partners and Bain Capital, have submitted separate bids and Carlyle Group and Onex Partners are partnering on a third bid for Thomson Reuters’ intellectual property and science business.

The intense auction process could produce a price near $3 billion, and that would be nearly 10 times Ebitda.

Large lenders are offering suitors more than the six times debt-to-Ebitda ratio outlined in federal guidelines for leveraged buyouts in order to get the deal done.

The lenders are willing to go above the guideline limit because there is a growing demand for scientific material, and Thomson division, which validates papers and studies, is not an actual editor.

 

Citadel Kicks Off New Role on NYSE Floor With Promptness Push

Annie Massa – Bloomberg

New changes revealed to get more stocks trading at 9:30 a.m.

 

HKEX Explores Collaborations To Further Develop Its Commodities Business (subscription)

Wilson Lau – SCMP

Operator looks at closer cooperation with exchanges in mainland China and around the world and signs MoU with the Shanghai Gold Exchange to explore areas of mutual interest.

Shanghai Gold Exchange Has No Plans To Work With LME On London Reform

Platts

The Shanghai Gold Exchange is continuing talks with HKEX, parent company of LME to give greater access to its contracts, but isn’t looking at direct partnerships with the LME according to SGE exeutive director, Lila Lu.

 

HKEx’s Proposed Third Board Draws Mixed Reaction From Industry Professionals (subscription)

Chris Davis – SCMP

Its 2016/18 strategic plan wants a third board for companies, unable to meet the profit requirements of the main board or the trading criteria of the Growth Enterprise Market (GEM).

 

SFC & HKEX Issue Joint Consultation On Listing Regulation

MondoVisione

Private Markets

Thai Bourse & Cambodia Securities Exchange Extend MoU As Part Of Plan To Strengthen Regional Competitiveness

MondoVisione

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat to small off, FTIL up nearly 2%.

NSEL Scam: Centre Asks Maharashtra Govt To Expedite Attached Assets Auction

Business Standard

To quickly auction Rs 6,116 crore (USD 900m) of assets and refund investors at the earliest.

Regular Review Meetings Being Held To Monitor Payment & Settlement Crisis In NSEL

Business Standard

PLY: More meetings, more talk, no resolution #Disappointing.

Technology

NSE To Launch Two-Factor Authentication For e-IPO Application

The Economic Times

The exchange launched its new e-IPO bidding system in January.

 

Humans Strike Back Against Stock Market Robots

John Detrixhe – Bloomberg

 

Bank of England Tests Blockchain In Fintech Push (subscription)

Anna Irrera – Financial News

The Bank of England has tested how blockchain technology can be used for payments settlement, as financial regulators around the world intensify their fintech efforts.

PLY: Interesting, see also BoE statement below…

Indexes

Bats To The Future For The LSE (subscription)

Neil Collins – Financial Times

LSE faces competition in its indices business.

PLY: Not before time and indeed another reason why DB1-LSE is ill-conceived with a bankers’ haste and lack of attention to detail.

Career Paths

MarketWatch reports that Reserve Bank of India Gov. Raghuram Rajan said Saturday he would leave his job as head of India’s central bank when his mandate expires in September.

Financial Calendar

20.06 – MOEX RUB 7.11 2015 dividend payment

21.06 – JPX AGM

22.06 – BGC Partners AGM 2016

22.06 – WSE AGM

24.06 – Nasdaq $0.32 quarterly dividend payment

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

Other stories

Enabling The FinTech transformation: Revolution, Restoration, Or Reformation? – Speech By Mark Carney, Governor Of The Bank Of England

MondoVisione

PLY: Very interesting.

 

ESMA Issues Opinion On Inside Information Disclosure Under The Market Abuse Regulation

MondoVisione

 

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