June 27 2013

elb2 Greetings from the front rows of the FESE Convention 2013 where there have been interesting speeches already from the likes of Buba Boss Wiedmann and ESMA’s Stephen Maijoor.

Bloomberg’s Nandini Sukumar chaired an excellent opening panel where Andreas Preuss was keen to promote the possibility for deals which expand the offering of exchanges in contiguous business areas. Meanwhile Christian Katz of Swiss Exchange was sensibly noting that pure exchange/exchange corporate action was now in a “deconsolidation” phase as opposed to that collective oxymoron ‘the conventional wisdom’ which still obsesses about platform mergers.

Last night, I enjoyed delivering a thought provoking data rich speech after dinner touching on multiple issues pertaining to the future of finance. A great event, already on track to be the best ever FESE Convention.

Finally, I am pleased to report a spontaneous round of applause when I described the FTT as a toxic tax; bad for freedom, markets and investment.

Public Markets

Eurex Chief Complains Of M&A Regulatory ‘Asymmetry’ (subscription)

Financial News

PLY: Andreas Preuss has been discussing this topic today at the FESE Convention. Clearly the wound still festers over ICE being able to buy NYX when DB could not. At the same time, there is some reasonable evidence that US markets are not as open to overseas competition as is the relative welcome mat provided by the EU. Perhaps not as stark as the way Andreas is presenting the message but there does seem to be credence that EU is a more open venue than the US for overseas financial markets participants…

Poland To Shrink Private Pension Funds (subscription)

Wall Street Journal

The Polish government, looking to shore up public finances, said it plans to reduce the role private funds play in the country’s mandatory pension system in a move that may put large stockholdings of listed companies in the state’s hands.

PLY: The Polish government under the weak PM Donald Tusk continues on a path to ignoring the difficult decisions of restructuring required to move Poland to the next level while moving towards a more left wing approach to woo socialist voters to maintain the government’s majority. Not encouraging and very worrying for the Warsaw Stock Exchange where a liquid, deep pension fund market is vital to maintaining its leading position in the New Europe and currently they own a vast proportion of the bourse’s listed companies.

TMX Scales Back Global Ambitions (subscription)

Financial News

PLY: With the new ownership structure of TMX, clearly the focus on a domestic strategy first makes sense in the medium term, especially given the lack of particularly attractive major exchange assets currently for sale which can add to shareholder value.

BM&FBOVESPA And Chi-X Global Certify Chi-FX


Chi-X Global Holdings today announced that BM&FBOVESPA S.A.has completed the formal acceptance of its Chi-FX platform for commercial use. BEI will allow registered Brazilian brokers to provide retail and institutional investors based outside of Brazil quotes of Brazilian exchange-listed stocks in their local currency.

LME Clearing Fees Will Match LCH.Clearnet’s Just-Tripled Charges


LME expects its in-house clearer LMEClear will charge members fees similar to provider LCH.Clearnet’s recently tripled charges for clearing LME trades (from 5p to 15p).

Fundsquare To Be Operational July 1


Fundsquare, the newly-created subsidiary of the Luxembourg Stock Exchange, has announced that it will be operational on 1 July 2013. Fundsquare will operate as a market infrastructure for investment funds offering streamlined fund distribution processes for the fund industry.

Exchanges Agree To Add Smaller Trades To U.S. Stock Volume


Stock trades of fewer than 100 shares that have traditionally been excluded from U.S. share volume tallies are poised to be added to the count.

PLY: At last odd lots can stand up and be counted! It was a touch odd in a digital age not to be counting all known trades anyway.

Private Markets

Canada – New Stock Exchange Promises Stability

Winnipeg Free Press

Major backers are Canada’s largest commercial bank RBC as well as mutual fund operator CI Investments Inc. (TSX:CIX) and IGM Financial Inc. (TSX:IGM), Canadian pension fund PSP Investments and the U.K.-based Barclays.

Aequitas president and chief executive Jos Schmitt said the venture would provide investors a viable alternative to the Toronto Stock Exchange and other markets owned by TMX Group, which is controlled by a different group of banks, pension funds and financial services companies.

PLY: I am curious how Jos Schmidt managed to have his previous venture, Alpha acquired as part of the TMX takeover and then if I understand correctly, he has been cooking this up on his gardening leave since last autumn? Moreover, as I understood he was a key partner/shareholder in Alpha, how come he didn’t have a more restrictive covenant to keep him out of the Canadian marketplace? Competition is good but it strikes me somebody at TMX ought to have been thinking about a way to restrict Jos’ entrepreneurial activities?

Knight Capital Group & GETCO Approve Merger

Knight and GETCO have voted the merger through at their respective shareholder meetings…FINRA and FCA have approved the merger, maintaining scheduled closure for July 1st.

MCX-SX’s Clearing Arm Eligible For OTC Trade In Corp Bonds

Zee News

The Reserve Bank Wednesday approved stock exchange MCX-SX’s clearing arm as an eligible entity for clearing and settlement of all ‘over the counter’ (OTC) trade in corporate bonds.

The other two eligible entities are NSCCL and ICCL, which are part of NSE and BSE groups, respectively.

BGC Partners Sees Q2 Results Toward Higher End Of Prior Outlook


BGC Partners, Inc. (BGCP) expects Q2 financial results to be towards the higher end of the range of previously stated guidance.

NYSE Euronext And The Receivables Exchange Renew Strategic Partnership

NYX and The Receivables Exchange (TRE), today announced the renewal of their strategic alliance to market TRE’s Corporate Receivables Program (CRP) to potential accounts receivable sellers, including NYSE-listed companies.

PLY: CRP has surpassed $1 billion of corporate accounts receivables sold on the platform, providing a form of P2P factoring. A brilliant idea which has simply enormous potential world-wide in this era of declining banker power.

India – New Tax Will Have Limited Impact On NCDEX

Business Line

Samir Shah, Managing Director, National Commodity and Derivative Exchange (NCDEX), notes that any tax is bad for business, but one should also understand that it is the only means for the Government to raise funds to run the country. Shah, who took over the reins of the agriculture-focused NCDEX on June 1, was earlier the Chief Business Officer at Dubai Gold and Commodities Exchange.

Palestinian Stock Exchange Has Potential To Grow


PLY: One has to admire the Palestinian Stock Exchange and indeed the fact that there even is a Palestinian Capital Market Authority which we read “is increasing its efforts to protect the most important Palestinian economic bodies — such as the Palestine Stock Exchange — which have been negatively impacted by a lack of investment awareness, the internal political schism between Fatah and Hamas”, not to mention the knock-on effect of Fatah/Hamas causing significant problems with the neighbours..


Eurex Clearing Launches New Risk Management System

Automated Trader

Eurex Clearing has launched Eurex Clearing Prisma, a risk management system that applies a portfolio methodology which will be rolled out for all products cleared by Eurex Clearing and will replace the current Risk Based Margining methodology. The net result is to promote hedged positions and increases capital efficiency.

ASX Selects Emulex For Trade Latency Monitoring & Network Troubleshooting

Sacramento Bee

Emulex Corporation (NYSE:ELX), a leader in network connectivity, monitoring and management, today announced that ASX is deploying the Emulex EndaceProbe™ Intelligent Network Recorder (INR) as the infrastructure foundation for trade latency troubleshooting and monitoring.

Equinix Selected By MarkitSERV For Credit Centre

Broadway World

MarkitSERV, the most widely used electronic trade processing service for OTC derivative transactions has deployed its Credit Centre in Equinix IBX data centers in New York and Chicago.

PLY: Useful statistic: Equinix is “home to more than 100 exchanges and trading platforms.”


China’s SHFE Aims To Revive Interest In Oil Futures Trading With Asphalt Contract


China’s Shanghai Futures Exchange is hoping its new asphalt futures contract — to be launched next month — will revive interest in oil trading on the bourse, after activity on its fuel oil contract fizzled out.

Career Paths

Colombo SE Appoints Director

The Official Government News Portal of Sri Lanka

Sri Lanka’s Colombo Stock Exchange (CSE) has appointed reputed stockbroker Asanga Seneviratne, as a new Director of the Colombo Stock Exchange to replace Dr. Saman Kelegama with effect from Wednesday (25)..

Asanga Seneviratne is the founder of Anilana Hotels and Properties. He is a non-executive Director of Nation Lanka Finance PLC and Chairman of Nation Lanka Equities.

Analyst Notes

Betfair Group Given “Outperform” Rating at BNP Paribas (BET)
CBOE Holdings Upgraded to Strong Buy at Zacks Investment Research
TMX Group Price Target Cut to C$46.00 by Analysts at National Bank Financial
“Overweight” rating on Nasdaq OMX Group at Barclays Capital


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Other stories

CBOE To Host Second Annual Risk Management Conference Europe


The Chicago Board Options Exchange (CBOE) is to host the second annual CBOE Risk Management Conference (RMC) Europe, from 30 September to 2 October at Penha Longa Resort in Sintra, Portugal.

Last Call For The Kansas City Board Of Trade


In October 2012, Chicago-based CME Group acquired the Kansas City Board of Trade, the more than 150-year-old wheat exchange. Operations move to Chicago as of July 1 – and the last call on the Kansas City trading floor takes place on Friday. We take a look back at the long history of the Board of Trade – and the end of an era.

PLY: A history of the KCBT which readers ought to recall actually debuted stock index futures with the Value Line in 1982…

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