June 26 2013

elb2 The beast is not dead yet but the FTT continues to have a protracted birth process. The fact that the EU’s own Commission economists reckon it to be highly deleterious to the European economy might make some people think twice but the genus of Euro-politician who supports it is usually entirely bereft of any insights into the real world where people try to make a dollar as opposed to sponging it off taxpayers.

Not mentioned in these stories is the highlight of IDX where Jeff Sprecher continued his crusade to kill payment for order flow. Frankly I am all for this – good for shareholders, will hurt some proprietary traders and brokers who have long over-valued their position in the food chain but ultimately will be good for transparent and transparently priced markets as well as shareholder values – the subject so close to the entrepreneurial Sprecher’s heart.

I am on a train right now trundling across the old Prussian rail network from Poland to Berlin, more on FESE’s Convention tomorrow perhaps along with some updates on my after dinner remarks at tonight’s dinner.

Public Markets

European Financial Transaction Tax Delayed (subscription)

The Wall Street Journal

A plan by 11 European countries to tax financial transactions will be delayed by at least six months as participating governments have yet to agree on key aspects of the new levy.

PLY: We remain in the deep danger zone here and need to kill this toxic tax dead not see it try to morph into another ridiculously dangerous proposition to drag markets into the mire of socialist shambles…

Vienna, Warsaw Bourse Merger Talks Have ‘Gained Momentum’

Warsaw Business Journal

PLY: Vienna Borse/CEESEG chief executive Michael Buhl has said “We must work out a common concept that will be advantageous for all shareholders and for the market.”

Here’s some free advice: ‘don’t do the deal!’ That will be hugely advantageous to shareholders in Poland and the market as a whole. True Buhl has his back against the wall to do a deal and is being pushed by desperate Austrian bank shareholders trying to sell a failing model from Vienna. Nobody else benefits from this deal, it is a dog which will be born with fleas if anybody is foolish enough to complete it.

The fact that Buhl is so keen to promote in public news of confidential negotiations ought to be a red flag of just what a dreadful tie-up this potentially is. I am not even clear it sits easily with WSE’s status as a public company to have Buhl as public cheerleader for a deal he is clearly desperate to do.

Gensler Rejects Cross-Border Compromise As Delay For Wall Street

Businessweek

U.S. Commodity Futures Trading Commission Chairman Gary Gensler insisted the agency push through its cross-border derivatives rules next month, a goal he said would be delayed by a fellow Democrat’s proposal.

PLY: Simply pushing through rules to repent at leisure when Gensler’s term is up typifies everything which is wrong with regulation the world over…

SGX Aims To Raise Retail Investor Participation Rate

Channel News Asia

The Singapore Exchange (SGX) aims to raise retail investor participation rate in Singapore from the current 8 per cent to 15 per cent.

Taiwan Cuts Capital Gains Tax On Share Sales, Removes Threshold

Businessweek

Taiwan lawmakers voted to roll back provisions of a capital gains tax on stock sales of more than NT$1 billion ($33.3 million) and removed an index price threshold that depressed shares.

New Global Issuer Hub Launched By Clearstream

Clearstream launches its Global Issuer Hub in the run-up to the 50th anniversary next month of the first Eurobond issuance by Italian motorway network Autostrade. The Global Issuer Hub is new in that it consolidates all issuance services into one access point, making issuances more efficient. Through the Global Issuer Hub, customers have access to end-to-end issuance services and can reach investors anywhere in the world.

PLY: All such initiatives to ease bond issuance and trading are good things, especially in Europe where the bank system needs to be pruned and more non-bank centric funding released at all levels of the economy. Another good incremental move by Clearstream.

European CEOs Lock Horns Over NLX (subscription)

Futures and Options Intelligence

Eurex CEO, Andreas Preuss’ candid comments came on a panel which is sometimes rather reserved in their responses, as he questioned the motives behind those funding the NLX project.

PLY: Reportage from the IDX in London which is, frustratingly overlapping with the FESE Convention in Berlin.

Moscow Exchange: Results Of The Annual General Meeting Of Shareholders

At the Moscow Exchange AGM, shareholders approved payment of 2,901,756.8 thousand rubles (USD 88,3 mln) (35.4% of annual net profit under IFRS, or 49.5% of annual net profit under RAS) as dividends for 2012, representing a dividend of 1.22 rubles (USD 0,037) per share to be paid within 60 days.

JSCC/JGBCC Conclude Merger

On the assumption that approval will be received in the general shareholders meetings of each company, the Board of Directors meetings of both companies held today made resolutions to conduct a stock swap Japan’s securities and bond clearing corps make progress with their merger.

Private Markets

New Canadian Stock Exchange Seeks To Challenge Dominant TMX

Business Standard

Canada’s largest bank and some of its most influential fund managers plan to set up a new stock exchange to challenge the dominant TMX Group Ltd, one that would limit the role of controversial high-frequency trading strategies.

The new exchange operator, Aequitas Innovations Inc, will be backed by Royal Bank of Canada and other institutions not involved in the 2012 takeover of TMX.

PLY: A fascinating development which ought to have TMX on its mettle. Presumably it is close to the end of Tom Kloet’s reign, it will be interesting to see who replaces him as TMX CEO.

Technology

NASDAQ OMX Launches Pre-Trade Risk Management Service

Commodities Now

NASDAQ OMX has launched its Pre-Trade Risk Management (PRM) service for Commodities. Genium INET PRM is developed by FTEN, a NASDAQ OMX company and a world leading provider of pre-trade and at-trade risk management technology. PRM facilitates real-time pre-trade protection to mitigate erroneous orders and transactions.

Indexes

NASDAQ OMX Global Large Mid Cap Index Receives Special FINRA Designation

MarketWatch

The NASDAQ OMX Group, Inc. today announced the Financial Industry Regulation Authority (FINRA) has designated the NASDAQ Global Large Mid Cap Index as an alternative index to allow member firms to calculate position limits on conventional equity options on foreign listed securities. Beginning June 27, member firms may use securities in the NASDAQ Global Large Mid Cap Index for purposes of position limit and quote criteria, pursuant to FINRA Rule 2360.

Products

London Exchange Seeks To Add To Its Menu (subscription)

Wall Street Journal

Xavier Rolet is that rare executive who makes his own wine, so it is perhaps appropriate that the French-born head of the London Stock Exchange wants to add an offering for Europe’s bread and pasta makers to the menu.

Mr. Rolet, after four years in charge, has stitched together an array of acquisitions and new products including pushes into commodities, derivatives, bonds and clearing in an effort to create a one-stop-shop exchange company.

Career paths

Is LME Ready For A Woman CEO?

Reuters

Whisper it: The next chief of the London Metal Exchange (LME) that last (sensible) bastion of open outcry may be a woman who prides herself on speaking softly.

Industry sources say Harriet Hunnable, managing director of metals at the CME Group, is among potential candidates to be LME chief executive when Martin Abbott leaves the post at the end of this year.

Analyst Notes

CME Group Upgraded To “Neutral” By JPMorgan
CME Group Given New $85.00 Price Target at Sandler O’Neill

Crowdfunding

Crowdfunding Platforms: What You Should Know

Triple Pundit

Crowdfunding is the updated internet version of an activity that has been around for more than 500 years: collecting money from a bunch of people, the crowd, to support a project or effort, like publishing a book or helping a deserving person through hard times.

Other stories

Hong Kong ‘Not Ready To Be A Commodities Trading Centre’ (subscription)

South China Morning Post

Commodities brokers and buyers say Hong Kong does not yet have the trading infrastructure to be a major commodities centre.

PLY: At the same time, Hong Kong has always been utterly dynamic in meeting consumer demand – how much wine did they trade 3 decades ago to give one simple example. Watch HK build as a major commodities centre as gateway to and competitor with, China and China’s mainland exchanges.

Farmers Smell The Coffee As Exchanges Set Down Roots

BDlive

When Ethiopia set up its commodity exchange in 2008, few foresaw the ripple effect it would have — least of all its founders. Countries are now falling over themselves to set up their own exchanges.

PLY: Once again proof the dynamic activity is often at the bottom not at the massive department stores at the top – the more exchanges the merrier fulfilling core commodity and consumer requirements…

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