BGC gains control of GFI after 56.3% of shares are tendered while KCG and BATS have all approvals to close the Hotspot acquisition and KCG separately may issue some new debt. Possible regulation change in Singapore…as SGX mull selling their PDS stake. Indian budget reveals impetus for FMC-SEBI merger Gujarat IFSC and much more with rounds of Bond platform poker, a new, er, crypto-public Bitcoin market and much more – happy scrolling!
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Public Markets
BGC Partners Gains Control Of GFI Group
Chad Bray – NY Times
BGC Partners & GFI Group Announce Successful Completion Of Tender Offer
BGC Partners
Stockholders Representing 56.3% Percent of GFI Shares Supported BGC’s Offer; Payment for Shares Tendered Expected on March 3. Independent GFI Board Members Resign; BGC Appoints 6 out of 8 Directors on Expanded GFI Board.
Read our Premium brief: BGC – CME – GFI Brief.
PLY: A Brazilian soap opera draws to an end – presuming there are no actions from shareholders pertaining to the previous actions (or inactions) of GFI management.
KCG & BATS Obtain All Approvals For Hotspot Transaction
Victor Golovtchenko – Forex Magnates
Read our daily updated Premium brief: Exchange Deals Brief.
FTIL Updates On Sale Of Stake In MCX-SX
FTIL
As communicated by MCX-SX, that the six existing investors cannot hold additional warrants in the form of warrants in their name, to be converted upon expansion of equity capital (including holding in Escrow A/c), as the same is not in compliance with the provisions of SECC Regulations, accordingly:
a) the six investors with whom the Warrant Purchase Agreement (WPA) was already executed has agreed to purchase 61 760 000 of additional warrants collectively;
b) Mr. Uday Shah, an existing investor has agreed to purchase 20 000 000 additional warrants by signing amendment to WPA;
c) three new investors viz., M/s Aadi Financial Advisors, Alchemi Equity Research and Securities and KIFS Securities have agreed to purchase 90 900 000 warrants and accordingly WPA has been entered between the parties separately on the same;
d) the above said warrants shall be converted by all the investors to ensure that each investor does not exceed their holding beyond 5% of the existing paid-up capital of MCX-SX.
After the completion of the above transactions, FTIL will be completely exiting from MCX-SX.
Read our Premium brief: FTIL Stakes Sales Brief.
SGX Mulls Sale Of PDS Stake To PSE
Reuters
SGX is open to selling its 20% stake in Philippine Dealing Systems Holdings Corp, which owns the country’s fixed income trading platform, to Philippine SE (PSE).
Read our Premium brief: PSE – PDEx Merger Brief.
KCG – Expected Capital Markets Debt Transaction
KCG
KCG Holdings announced that it expects to launch a capital markets debt transaction in the next week, subject to market conditions. The net proceeds from any offering would be used to repay KCG’s maturing convertible notes and redeem KCG’s existing senior secured notes as well as for general corporate purposes, which may include share repurchases.
CEO Exit Seen Perfect Time For SGX To Lose Regulatory Role
Anshuman Daga & Rachel Armstrong – Reuters
SGX may have just begun its search for a new CEO but investors and brokers already know what change they want to see: the bourse stripped of its regulatory powers and a rebuilding of its stock market business.
Unlike other major financial markets, Singapore does not have a dedicated securities watchdog. Instead SGX is the front-line regulator and is in turn regulated by the central bank, the Monetary Authority of Singapore.
FAO: Last week EI reported that Magnus Bocker is stepping down from his role, not seeking an extension of the contract which ends in June this year.
PLY: Read our Premium post: Magnus Bocker – SGX Reflections.
India – Budget 2015: Arun Jaitley Says FMC & Sebi Will Be Merged
The Economic Times
India’s Regulatory Shakeup Could Revive Commodities Markets
Rajendra Jadhav – Reuters
MCX shot up nearly 15% in trade after the finance minister Arun Jaitley said that Forward Markets Commission (FMC) will be merged with Securities Exchange Board of India (SEBI).
PLY: A good move provided the unified agency is shaken up at the same time to be a modern pro market regulator.
Sebi-FMC Merger: Soon, Commexes May Start Equity Trading
Rajesh Bhayani – Business Standard
Merger of FMC with Sebi allows a commodity exchange to expand in segments permitted under a stock exchange and vice versa.
Modi’s Pet Project, GIFT-IFSC, Inches Closer To Reality
Rutam Vora – The Hindu Business Line
India’s first International Financial Services Centre (IFSC) at the Gujarat International Financial Tec-City (GIFT City) near Gandhinagar is now well placed to become a reality. The Finance Minister Arun Jaitley on Saturday announced that the Government would bring regulations on IFSC in March, thereby putting Prime Minister Narendra Modi’s dream project of GIFT on a fast track.
FAO: Both BSE and NSE plan to set up exchanges in India’s first International Financial Services Centre (IFSC), GIFT as reported here and here.
HKEx Expected To Profit From Stock Link With Shanghai (subscription)
Enoch Yiu – South China Morning Post
HKEx sees strong rise in turnover in the two months after link-up with Shanghai, while subsidiary LME also enjoys trading boom.
No Short Selling Of A Shares On First Day (subscription)
Enoch Yiu – South China Morning Post
No turnover was recorded on the first day of northbound short selling under the Shanghai-Hong Kong stocks through-train scheme.
Louis Tse Ming-kwong, a director of VC Brokerage, said there was no short selling of A shares via Hong Kong because investors were worried the market might go up as a result of Saturday’s interest rate cut on the mainland.
Tyler Rameson Of California’s Gray Whale Capital Takes 6% Stake In LCG
Andrew Saks-McLeod – LeapRate
Newly revitalized British electronic trading firm London Capital Group (LCG) is continuing to attract the attention of top international talent, this time in the form of Tyler Rameson, trustee and member of the senior management of Californian quantitative proprietary trading and security brokerage firm Gray Whale Capital LLC.
Mr. Rameson joined London Capital Group’s fundraising exercise led by Charles-Henri Sabet in October last year, in which he participated alongside Mr. Sabet and Hargreave Hale in raising £17,500,000, through the issue of convertible loan notes to GLIO and institutional investors.
BoE Paper Says EU Market Plans Don’t Need New Supervisor
Reuters
Bank Of England – Financial Stability Paper 33: A European Capital Markets Union: Implications For Growth And stability – Niki Anderson, Martin Brooke, Michael Hume And Miriam Kürtösiová
MondoVisione
The benefits from the EU’s planned CMU do not depend on putting in place a new, single regulator, a Bank of England research paper said on Friday.
Previous mentions and discussions on the CMU topic here, here, here, here,here and here.
China Plans Yuan-Denominated Gold Fix This Year
A. Ananthalakshmi – Reuters
China plans to launch a yuan-denominated gold fix this year derived from a new 1 kg contract to be launched on the state-run Shanghai Gold Exchange.
PLY: I am not sure this so directly applies to the London Gold Fix but it is distressing to see how little Europe realises the extent of Asian growth while relying on its historical central position in the world.
China Plans To Levy Capital-Gains Tax On Foreign Investors (subscription)
Shen Hong – Wall Street Journal
Chinese regulators are planning to levy a 10% capital-gains tax on the country’s first foreign investors.
Any decision to enforce the tax, which has long been the subject of much uncertainty, is likely to deal a blow to some investors. But for funds that have already made provisions to pay, a move on the tax would provide much-needed clarity, allowing money managers to accurately value their stock holdings.
PLY: …Then again, China, like Europe is still struggling to get to grips with free market thinking…
Managers Turn To Dark Pools To Carry Out Trades (subscription)
Attracta Mooney – Financial Times
Asset managers need another way to trade bonds now that dealer banks have scaled back their operations. Fortunately, electronic platforms are rising to the challenge.
PLY: Albeit that there are too many, who are vastly too optimistic and have few plans in the event of the bond market turndown which is more a matter of time than pure speculation…
Private Markets
Vietnam – Work To Merge Two Stock Exchanges To Start In 2015
Reuters
Vietnam will take the first steps this year to prepare for the merger of its two stock exchanges, the Ho Chi Minh SE (HOSE) and the Hanoi SE. HOSE accounts for 90 percent of Vietnam’s stock market value.
CSE To Commence Central Counterparty Clearing System
News.lk
Colombo SE (CSE) is to commence a CCP system and has already signed contracts in this regard.
Bitcoin Swaps Exchange Gets Public Listing Via Reverse Merger (subscription)
Michael J. Casey – Wall Street Journal
Tera Group announced Friday that it has entered into a merger agreement with MGT Capital Investments, a NYSE-listed company that runs online gaming sites. Under the terms of the deal, Tera will take a controlling stake in MGT, which will issue common stock shares worth 70% of its pro form equity to Tera’s owners. MGT has a market capitalization of about $5.2 million.
Press release here.
Special Section: FTI, NSEL, India at the Crossroads
PLY: FTIL in orbit – up 20% (whatever happened to limits?) presumably as the budget is ingested and speculators reckon a forced merger may be off? Or is it the ‘we might get rid of Jignesh if the MCA suppresses the board and thus all bets are off for the future?’ Meanwhile, post budget, MCX is ‘only’ up 3%!
FTIL To Challenge Ministry’s Petition To CLB
K R Srivats – The Hindu Business Line
The board of FTIL had on Sunday “strongly opposed” the Corporate Affairs Ministry’s (MCA) petition to the Company Law Board (CLB) seeking removal and supersession of FTIL board.
This petition to CLB is a clear attempt by the MCA to render ineffective, and in fact defeat FTIL’s challenge and opposition to the proposed amalgamation of NSEL with FTIL, the FTIL said in a statement.
FTIL will challenge the MCA’s move (to file petition with CLB) in the Bombay High Court, the statement added.
Read our Premium brief: NSEL-FTIL Merger Brief.
Technology
MSM Reports Technical Issue
Zawya
Oman’s stock exchange, Muscat Securities Market (MSM), said on Sunday it was trying to resolve a technical issue that has affected its trading platform.
MSM follow-up here.
FAO: Market is now open.
Clients Use Trayport’s REMIT Reporting Prototype
MondoVisione
Trayport announced the general availability of its prototype online REMIT reporting tool to enable energy trading firms to meet their regulatory reporting requirements.
Products
Transparency Rule Puts New Spanner In The Works (subscription)
James Rundle – Financial News
Bond markets in Europe – already struggling to function as banks step away from market making – are about to face a new challenge.
CME To Align Price Limits In Chicago, KC Wheat Markets
Farm Futures
CME says aligned daily Chicago soft red winter wheat and Kansas City hard red winter wheat limits to start May 1.
Career Paths
Scoop reports that NZX’s head of policy and legal Robin Dey has resigned after seven years with the company, and her role has been split by the stock market operator.
NZX said Hamish Macdonald will become head of policy, while Kristin Brandon will assume a newly established head of compliance to ensure NZX meets various laws and regulations it operates under, with both reporting directly to CEO Tim Bennett. The management changes take effect from March 2. Head of market supervision Joost van Amelsfort will continue to report directly to the board.
Channel NewsAsia reports that Director of the Commercial Affairs Department (CAD), Mr Tan Boon Gin, will join SGX on June 15 as Chief Regulatory Officer.
Reuters reports that IEX Group hired a former NYSE official as chief regulatory officer. Claudia Crowley, a long-time executive with NYSE and affiliated companies, has been working as a consultant for IEX as the firm writes the rules and prepares its regulatory filing for the new exchange that it hopes will be operational by Q3. Crowley starts April 1.
NYSE Tech Vets Form Data Policy Startup (subscription)
Waters Technology
A group of former NYSE Technologies execs have set up a new company that provides an online platform for comparing and interpreting exchange policies to ensure that firms remain compliant and are aware of the impact of policy changes on their costs and entitlements. Dubbed Axon Financial Systems, the company comprises Chris Hutton as CEO, Aaron Garforth as CIO, John Donaghy as CTO, Andrew Johns as principal architect, and Steve Cowler as COO.
The News reports that The Securities and Exchange Commission of Pakistan (SECP) has initiated the process of overhauling the boards of directors of stock and mercantile exchanges to improve their effectiveness. SECP has appointed Khalid Aziz Mirza and Moin M Fudda on the Boards of Lahore SE (LSE) and Islamabad SE (ISE), respectively.
Financial Calendar
This week
CFTC will hold a public roundtable on March 5, 2015, from 9:00 a.m. to 5:00 p.m., to discuss issues related to recovery and orderly wind-down of Derivatives Clearing Organizations (DCOs).
TMX $0.40 dividend payment
New announcement
ICE 2015 Annual Meeting of Stockholders – Friday, May 15, 2015 at 8:30am ET at the Four Seasons Atlanta, located at 75 14th Street Northeast, Atlanta, Georgia 30309 (press release here)
All forthcoming exchange / investment related events are now listed in our Events page.
Share Notes
CME insider Derek Sammann sold 4,770 shares Wednesday, February 25th at an average price of $96.54 (bargain $460,495.80). He now owns 21,043 shares.
MarketAxess Holdings CFO Antonio L. Delise sold 7,000 shares Thursday, February 26th at an average price of $80.92 (bargain $566,440.00). He now owns 43,239 shares.
Analyst Notes
Compass Point Reduced Their Price Target On Lending Club From $19.00 To $16.00 – “Sell” Rating
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.
Other stories
Esma Claims It Is Handcuffed By Mifid II (subscription)
James Rundle – Financial News
ESMA held an open hearing on Mifid II last week, during which transparency requirements for non-equity instruments were discussed. Questions from the industry, as expected, centred on Esma’s liquidity definitions, and the various concerns on pre- and post-trade transparency mechanisms.
PLY: Who’d have thought that not defining things properly (or at all) before embarking on a political witch hunt masquerading as new regulation, could end up with such a situation?