June 26 2015

elb2Today in Exchange Invest:

From Kazakhstan going T+2 via the Chinese and Russians signing a CSD MOU, when you read about the UK FCA boss fretting about customer protection to the exclusion of actually funding the future, you are inclined to ponder whether there might not be a better chance if Europe didn’t just gift its decline to the east… Meanwhile, SGE are looking at a CME contract agreement. Warsaw SE adds two government employees to the board while the Hong Kong regulators look to be on our side when it comes to the dreadful concept of dual share listing. IEX and Liquidnet launch a nifty new algorithm which ought to deliver a “win win” as staff buy shares in Oslo Bors. Happy scrolling:

Public Markets

Plus500 Spends Millions On Atlético Madrid Sponsorship Despite Troubles
Ashley Armstrong – Daily Telegraph

A takeover approach and an order by the City watchdog to review its anti-money laundering systems has not dissuaded Plus500 from spending millions “upgrading” its sponsorship agreement with Club Atlético Madrid to be the main shirt sponsor for the next two seasons.

Read our Premium Plus500 Turmoil & Deal – Brief – Part 1, Part 2.

PLY: Besides the direct turmoil and the generally pervasive air of unanswered questions around Plus 500, have any investors been watching statements by the likes of CFTC Commissioner Sharon Bowen? She is determined to drive leveraged forex into the exchange/CCP domain (and quite right too!). Where the CFTC treads, I would not be surprised the FCA / EU would follow – what’s the future then for the Plus 500 business model, even if all outstanding questions are answered satisfactorily?

NZX Sells Its 50% Stake In Link Market Services NZ
MondoVisione
NZX To Buy Apteryx
Radio New Zealand

NZX is selling its 50% stake in Link Market Services (NZ’s leading provider of share registry services), and has plans to reinvest in Apteryx, a digital services management company. Link would make an initial payment of $13.8 million to NZX, with an additional $450,000 to be paid in 12 months time, depending on Link NZ’s financial performance over that period.

NZX entered into a non-binding agreement to buy Apteryx (price not disclosed), a technology company focused on providing online services to investment companies, across a range of digital devices.

Apteryx had annual revenues of about $1.2 million in the year ended March, with more than $1 billion of funds administered on its platform.
PLY: An interesting shuffle.

CME Traders Face Uphill Battle To Delay Pit Closures
Tom Polansek – Reuters

U.S. regulators will likely allow CME to close most of its open outcry futures pits as planned next month, despite last-minute calls from a handful of traders and brokers for an extended review.

The final open-outcry session is expected to be on July 6. CFTC could also delay the pits’ closure by up to 90 days.

PLY: It’s tough to argue why CME pits ought to stay open. A decade ago, the Montreal Exchange won a total victory against protesting floor traders about the closure of their floor in the High Court of Quebec (disclosure: I was the expert witness at the court proceedings).

SFC Slams HKEx’s Proposal To Change Listing Rules
Reuters

SFC said its board had unanimously concluded it did not support the draft proposal put forward by HKEx.

Hong Kong’s SFC Statement On The SEHK’s Draft Proposal On Weighted Voting Rights
MondoVisione
HKEx’s Response To The SFC’s Statement In Relation To The Draft Proposal On Weighted Voting Rights
HKEx

Earlier this week HKEx published the conclusions to concept paper on weighted voting rights.

PLY: Hong Kong regulators appear broadly aligned with my own major misgivings about dual shareholding structures.

EU Capital Markets Plan Must Protect Investors Better
Huw Jones – Reuters

Martin Wheatley, FCA CEO – The EU’s plan for a unified capital market needs more work to protect investors from losses if it is to provide the economic boost policymakers’ are hoping for. The planned CMU was a laudable aim, but much would hinge on implementation.

Read our Premium EU CMU Brief.

PLY: NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO (ad infinitum).

It’s a tragedy that again we hear how the FCA obsesses about protecting clients before they worry about making the economy work. It seems despite a spell in a more capitalist clime, Hong Kong under de facto Chinese Communist Party rule, Mr Wheatley can only manage to show he is a bland one trick collectivist pony.

When faced with such inelegant risk averse defeatism even at the start of the CMU process from somebody who frankly ought to know better, it is abjectly apparent that the Euro-blob actively seeks poverty not prosperity. The comments by the Swiss Finance Council advisor is apt – the key is Europe needs to become a risk assessing – not nanny stated! – risk taking culture. Until then, Brussels can sue as many Google’s as it wants, all the way into European bankruptcy.

Oh and entirely unsurprisingly, the political pygmies didn’t make any progress on anything except consuming Olympian quantities of red wine last night in Brussels either.

Then again the implementation point is key – lots will hinge on national regulators not applying universal gold plate to support the wrong-headed customer protection at all costs mantra…

Russian, Chinese Central Securities Depositories Sign MoU
Maria Nikolova – LeapRate

Russia’s National Settlement Depository (NSD) and China Central Depository and Clearing Co. (CCDC) have agreed to cooperate in the sphere of depository and settlement operations.

PLY: Good. How long before China and Russia go (back) to T+0 and lead the world?

Private Markets

NCDEX’s Ambitious Growth Plan
Rajesh Bhayani – Business Standard

NCDEX says it sees a big opportunity in agri products, with the government and regulators both wanting this market to grow.

PLY: Good, I wish them every success.

KASE Index Shares Trading Using T+2 Scheme
KASE

Kazakhstan Stock Exchange (further – KASE) is pleased to announce that starting in June 29, 2015 trade participants will have an opportunity to trade shares of KASE Index under T+2.

PLY: Kazakhstan were the world leader with T+0 (after Russia gave up for the same reason:) but that didn’t work for the backwards west… Incidentally, on settlement topics, the Bank of England’s blog has a brilliant must read post on Herstatt – thanks to John Serocold for the heads up.

Dividend News

GPW’s AGM has approved a dividend from the company’s profit in 2014 at PLN 2.40 per share. The dividend yield is 4.9%. Record date 15 July 2015, dividend payout date at 4 August 2015.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL up 1%.

Technology

Xetra Trading Suspended For Technical Reasons
Reuters

PLY: What is the German for “D’oh!”?

Liquidnet & IEX Extend Access To Safe Trading Opportunities With Launch Of New Algorithm – Liquidnet Dark IEX Leverages The Safety Of The Liquidity Accessed Through Both Liquidnet And IEX
MondoVisione

PLY: Good move by the innovative end of the stock trading continuum. You can actually complete the entire algorithmic trading process in the time it takes to read this headline apparently.

Blythe Masters Quick Off the Block With Startup Buys
Sarah Krouse – Wall Street Journal

Digital Asset Holdings, the blockchain start-up led by former J.P. Morgan Chase executive Blythe Masters (appointment reported here) has acquired two smaller firms and is preparing for its first Series A funding round in the coming months. (The company was intending to acquire San Francisco-based ledger platform HyperLedger and blockchain software company Bits of Proof).

Products

SGE In Talks With CME To List Contracts
Bloomberg

Shanghai Gold Exchange (SGE) is in discussions with CME about listing each other’s contracts on their respective exchanges, according to Shen Gang, VP of SGE.

SGE will list contracts and prices on CME in the first phase of the cooperation. CME’s contract will then be available to SGE members during a second phase. An agreement will be signed in August and trading may begin in Q1 2016.

Read our Premium China Capital Markets Transformation Brief – Main File.

Career Paths

Mr Andrzej Ladko and Mr Bogdan Klimaszewski have been elected to Warsaw SE Exchange Supervisory Board.

PLY: Mr Klimaszewski works for the government (whose minority shareholding gives them a majority of votes in GPW) while Mr Ladko works for Bank Gospodarstwa Krajowego, which is Poland’s only state owned bank…

Diane Schueneman, an ICAP NED, was appointed as a NED of Barclays PLC & Barclays Bank PLC.

SEC named John C. Roeser as Associate Director & deputy head of the Office of Market Supervision in its Division of Trading and Markets.

LeapRate reports that ex-CFTC Chairman Dr. James Newsome and the President of the Institute for Liberty and Democracy, Hernando de Soto, joined BitFury’s Advisory Board.

Financial Calendar

Today

Nasdaq $0.25 quarterly dividend payment – June 26

New announcements

CFTC Division of Market Oversight public roundtable on July 15, 2015, to discuss the Commodity Exchange Act’s trade execution requirement and the process of making MAT determinations (announcement here).
Thomson Reuters Q2 2015 Financial Results – Wednesday, July 29, 2015 (announcement here)
CBOE Q2 Financial Results – Friday, July 31, 2015

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

Share Notes

Mandatory Notification Of Trades – Oslo Børs VPS Holding ASA
MondoVisione

In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has sold a total of 1552 shares. New holding is 10743 shares. Employees paid a share price of NOK 90,80 per share, but were allowed a discount of 20% on purchases up to NOK 625.

PLY: Good to see Oslo Bors staff keen to buy their own shares…

Analyst Notes

LSE “Outperform” Rating Restated By RBC Capital
LSE “Hold” Rating Restated By Numis Securities – GBX 2,300 Target Price

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

All Analysts, Banks and Brokers are welcome to contribute to this section.

Crowdfunding

RiverNorth Starting Fund To Invest In P2P Loan Market
Matt Scully – Bloomberg

The $3.5 billion Chicago fund manager is setting up what would be the first closed-end fund in the U.S. to invest primarily in loans, securities and equity tied to lenders such as LendingClub or Prosper Marketplace that participate in the P2P market.

Other stories

MEPs Escalate Concerns Over Mifid II Process (subscription)
Financial News

Senior politicians in Brussels have penned a letter to the European Commission voicing “major” concerns that the region’s top regulator is not sharing information on its efforts to overhaul trading rules.

 

 

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