June 29 2016

elb2The noose tightens on DB1-LSE while some market manipulation discussion makes for somewhat perturbing reading if proven true.

In the parish, the ICDA CyberRisk conference in London, July 20th is an interesting upcoming event, secure a place at GBP 295 with the Exchange Invest code YOUNG295.

Meanwhile, you can now access my Brexit files in Premium through this contents directory: Brexit – Main File

Public Markets

Regulator Says HQ of Merged Stock Exchange Would Have to Be Moved From London (subscription)

Madeleine Nissen & Eyk Henning – Wall Street Journal

Felix Hufeld, president of BaFin: “It is hard to imagine” that the most important exchange operator in the euro zone would be steered from a headquarters outside the EU.

PLY: The anti-deal stuff is piling up against DB1-LSE. NB Anybody expressing surprise at this ‘news’ is clearly not reading Exchange Invest.

German Finance Ministry: Regulators Examining LSE-DB1 Merger After Brexit Vote


Can the LSE Give Up on London?

Chris Hughes – Bloomberg

The market thinks Brexit has killed the planned merger of the LSE and DB1. The companies may need to do something clever to prove investors wrong.

PLY: The problem is the DB1 and LSE management are just too clever, at least in their own hubristic bubbles.

QV Premium: DB1-LSE Merger Brief.


SGX & Baltic Exchange Extend Period Of Exclusive Discussions


SGX has agreed with the Baltic Exchange to extend the period of exclusive discussions regarding a cash offer for 100% of the share capital of the Baltic Exchange from 30 June 2016 to 31 August 2016.


Informa Said to Hold Joint Bid Talks for Thomson Reuters IP Unit

Kiel Porter & Alex Sherman – Bloomberg

Informa has held talks about providing capital to bidders for Thomson Reuters’ Intellectual Property & Science division, said people familiar with the matter.

The company has spoken with some of the remaining bidders, which include buyout firms Bain Capital, BC Partners and Carlyle Group, about investing alongside the eventual winner. The talks are preliminary and Informa is not yet formally part of any bid.

Thomson Reuters, which is working with JP Morgan Chase and Guggenheim Securities on the sale process, expects the unit to fetch about $3 billion. The company said in November it would sell the division, which employs more than 3000 people globally, because it is no longer core to the company. Final bids are expected this month.


Industry Groups Urge Focus On Risk Controls In CFTC’s Proposed Rule On Automated Trading


The FIA, FIA Principal Traders Group (FIA PTG), ISDA, Managed Funds Association (MFA), and SIFMA’s Asset Management Group (SIFMA AMG) sent a joint letter to the CFTC in response to the reopened comment period on its proposed rule on regulation automated trading (Reg AT).


U.S. Questions Whether Futures Markets Can Police Themselves

Matthew Leising – Bloomberg

A top executive at 3Red Trading reassured his co-founder about the future of the firm, even as federal regulators and two exchanges were investigating them for alleged market manipulation.

“Just finished up with the head honchos,” Edwin Johnson wrote about a meeting with ICE executives. “We will do a very basic phone interview next week. Then it will all go away,” he texted his partner in the spring of 2013. “I was given their word last night.”

Likewise, he texted, top brass at CME “are 100% behind us.”

The government introduced the messages in court, arguing that exchanges have failed to adequately police trading by Oystacher, one of their biggest customers. Those assertions emerged in a case brought by the CFTC, which is asking the court to immediately halt all trading by Igor Oystacher, 3Red’s co-founder and head trader, until the case accusing him of a type of manipulation called spoofing is decided next year.

PLY: Quite feasibly out of context but clearly the excerpt does not read well…then again to get into the media, do such excerpts ever read well?


LME Electronic Volumes Surge In Battle Over Traditional Trading

Eric Onstad – Reuters

Electronic trade on LME has climbed by nearly a fifth this year as the LME lures more speculators, sparking a battle with members who worry about threats to the traditional structure symbolized by the open outcry floor.


Eurex Launches OTC Clearing Incentive Scheme For Buy-Side

Joe Parsons – The Trade

The scheme will provide “registered customers”, including buy-side firms, a waiver from booking and maintenance fees until 30 September.


Traders: Quit Quibbling & Get Mifid II Done (subscription)

Tim Cave – Financial News

Private Markets

Sorry Shanghai, There’s a New China Stock Exchange King


Turnover on Shanghai bourse has plunged 86% in past 12 months.

The new leader is Shenzhen’s SME Board, a 12-year-old market for mostly non-state companies that first climbed to No. 1 on May 17. It has since jockeyed for position with the Shanghai, with both bourses handling about 180 billion yuan ($27.1 billion) of trades on average over the past five days.


Turkmenistan To Create Ashgabat SE


Turkmenistan is planning to create Ashgabat SE closed joint-stock company to implement the state program on the development of the securities market, the Turkmen government reported.


KRX To Offer Iranian Securities

Tehran Times

KRX has voiced readiness to offer Iranian securities, specifically Sukuk, Chairman of Iran’s Securities and Exchange Organization (SEO) Mohammad Fatanat announced in a press conference.


Taiwan SE & Bursa Malaysia Sign MoU To Jointly Study Potential Cross-Border Cooperation



Kraken Continues Acquisition Spree, Buys Dutch BTC Exchange CleverCoin

Avi Mizrahi – Finance Magnates

The acquisition is expected to help Kraken cement its hold on the European market and raise EUR pairs volumes.


New Chinese Civil Law Draft Classifies Bitcoin as Property


China may soon have a set of laws offering legal status to Bitcoin and other digital currencies in the country.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL up 1%.


Bombay SE To Launch New Debt Reporting & Settlement Platform

Financial Express

BSE has decided to launch a new debt platform to provide ease in reporting and settlement of corporate bonds, government securities, commercial paper and certificate of deposit.


Euronext: Brexit Delays Decision On How To Bolster Lisbon Stock Index


Career Paths

SEC announced that C. Dabney O’Riordan has been named co-chief of the Division of Enforcement’s Asset Management Unit, a national specialized unit that focuses on misconduct by investment advisers, investment companies, and private funds. She joins Anthony Kelly as co-chief of the unit and succeeds Marshall Sprung, who left the agency in April.


OCC, the world’s largest equity DCO and a leading provider of options education content through The Options Industry Council (OIC), announced that Geralyn Endo, VP at BAML; Gary Franklin, VP & Manager, Options Trading & Strategies at Raymond James; Frank A. Magnani, Global Prime Brokerage Institutional Sales at Interactive Brokers and Barry Metzger, SVP, Trading Services, Charles Schwab & CEO, optionsXpress, have joined the Options Industry Council (OIC) Roundtable.

The OIC Roundtable is the independent governing body of the OIC, and is comprised of representatives from the options exchanges, member brokerage firms, and OCC.


LeapRate reports that Plus500 added seasoned compliance executive Penny Judd as a NED. Judd is currently EMEA Head of Compliance in the London office of Nomura, although she plans to step down from that position to take non-executive board positions.


CFTC Charges ex-CBOE Director With Fraud

Tom Polansek

CFTC said Alvin Wilkinson fraudulently accepted at least $6.9 million from 30 people for trading from 1999 until now. Wilkinson served as a director of CBOE from around 2001 to 2004.

The CFTC is seeking restitution for investors, a fine and permanent registration and trading bans on Wilkinson.

Financial Calendar

30.06 – ICE Q2 $0.85 dividend payment

New! – 27.07 – Nasdaq Q2 2016 Results – press release

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


LendingClub Says Ex-CEO Took Loans To Boost Volumes

Michael Erman & Heather Somerville – Reuters

LendingClub to Cut 12% of Its Workforce as Loan Volumes Fall (subscription)

Peter Rudegeair – Wall Street Journal

LendingClub unveiled new responses to a slump in its business Tuesday, restricting investors from exiting from one of its funds and announcing job cuts totaling 12% of its workforce.

Other stories

Keynote Address, SEC Regulation Outside The US “The SEC At Home & Abroad”, Andrew J. Donohue, SEC Chief Of Staff




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