March 15 2016

elb2As head of a major utility gambling entity, the former McKinsey consultant Elmer Funke Kupper made his reputation to catapult him to the job as monopolist in chief of market structure as CEO of ASX. A blockbuster story has emerged overnight in Australia about activities which would appear unbecoming to the activity of a major public CEO and are acutely worrying when it comes to the stewardship of a self-professed monopoly.

These are worrying times for management, there are questions being raised and if more emerges it is tricky to see how anybody, especially the ASX board, let alone ASIC and others can feel comfortable about his position…

Public Markets

‘Foundation’ Laid for DB1-LSE Merger (subscription)

Giles Turner & Tim Cave – Wall Street Journal

The holding company created for DB1’s planned merger with LSE comes in the form of a Dutch legal vehicle typically used to thwart rival takeovers.

Stichting HLDCO123, created March 7. Lisa Condron, LSEG’s company secretary, and Marcus Lehmann, DB1’s head of corporate strategy, are its only two named directors. The stichting is the sole shareholder of HLDCO123 PLC, a U.K. company founded on March 9, with the same directors.

Stichting, “foundations” in Dutch, increasingly have become a useful tool used by multinational firms to protect themselves against a range of factors, including hostile takeovers. The entities don’t have any legal owners, and therefore can veto any potential takeovers and shift assets outside the reach of rivals and shareholders.

PLY: Deal vehicles are part and parcel of M&A. …BUT! My simple concern here is that if the arbiters of market structure were to resort to shabby tactics of anti-democracy which are not shareholder value centric, will it not result in a tectonic shift in the political-regulatory nexus?

Public Opening Position Disclosure by a Party to an Offer

ICE

Public Opening Position Disclosure by a Party to an Offer

ICE

QV Premium: DB1-LSE Merger Brief.

 

Exchange Leaders To Size Each Other Up In Boca Raton

John McCrank – Reuters

PLY: Media to justify expenses in Boca Raton too. Neat angle though, means John McCrank has something to show for his endeavours before the event kicks off.

Private Markets

Jindal Power Sells 4.12% Stake In Indian Energy Exchange

Business Standard

Debt-ridden power producers Jindal Power and Reliance Infrastructure are selling their stake in India Energy Exchange (IEX) to raise capital for servicing debt.

Jindal Power holds a 4.12% stake in IEX, which it is now selling. Terms are not disclosed.

 

Valuation Of Exchange Relies On Its Regulatory Prowess: Ashish Kumar Chouhan, BSE

Palak Shah – The Economic Times

After a nearly two-year wait, Asia’s oldest exchange, the BSE, was given a go-ahead for its IPO (reported yesterday). The exchange may go public this year, where large institutional investors will offer a part of their stake to widen investor base. Ashish Kumar Chauhan, MD of BSE spoke to ET on how the Exchange plans to attract investors.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL off 1%.

Technology

Bats Successfully Operates U.S. Businesses From Disaster Recovery Site

Bats

 

Bitstamp Uncovers Bitcoin-Stealing Chrome Extension

Charlie McCombie – Cointelegraph

Bitstamp revealed in a Tweet that it had uncovered a Google Chrome extension that replaced all QR codes.

Products

HKEx’s Relaunch Of Gold Contracts Unlikely To Succeed (subscription)

Enoch Yiu – SCMP

HKEx plans to launch gold futures again but there is reason to doubt whether the third such attempt will be any more successful than two ill-fated predecessors.

 

CFTC Staff Provides Relief In Connection With Swap Trade Confirmations

CFTC

 

FX Clients Demand An Independent Stamp Of Approval (subscription)

Joel Clark – Financial News

Asset managers would prefer independent providers to analyse the cost and quality of their FX trades, but not everyone is happy with what’s on offer.

 

China Drafts Rules For Tobin Tax On Currency Transactions

Bloomberg

China’s central bank has drafted rules for a tax on fx transactions that would help curb currency speculation

The tax is not designed to disrupt hedging and other fx transactions undertaken by companies.

QV Premium: China Capital Markets Transformation Brief – Main File.

 

Bahrain’s Bourse Sets Up REITs Market

Reuters

Under the plan, REITs licensed by the central bank can be listed and traded by investors in the secondary market.

 

More Trouble in Bonds Backed by P2P Loans

Tracy Alloway & Matt Scully – Bloomberg

In mid-December, shortly before Christmas, Moody’s Investors Service gave a gift to investors in the fast-growing marketplace-lending space: the chance to buy a junior slice of a securitization of “peer-to-peer” loans with a credit rating and a spread of 6% over benchmark swaps.

Eight weeks later, investors found Moody’s in a much less generous mood. The rating agency announced it was considering downgrading the riskiest portion of the deal, along with the junior tranches of two similar securitizations that had been previously sold to investors.

Indexes

SGX Looks To Tap Into China Investor Wariness (subscription)

Philip Stafford – Financial Times

SGX is looking to capitalise on investors’ concerns about direct exposure to Chinese markets by offering a series of equity derivatives based on the popular MSCI indices.

Career Paths

ASX CEO Elmer Funke Kupper Needs To Set The Record Straight

Elizabeth Knight – SMH

Explosive allegations of a $200,000 payment to the family of the Cambodian Prime Minister Hun Sen by Tabcorp in 2010 during the reign of the now head of ASX, Elmer Funke Kupper, need to be cleared up as matter of urgency.

As head of the ASX, Funke Kupper needs to be both beyond reproach and to be seen to be beyond reproach.

Given he is responsible for the oversight of the stock exchange, he is expected to be the one setting set a high benchmark with regards to the law and corporate governance.

He is also one of Australia’s most prominent and well-connected businessmen.

PLY: #Worrying

 

SEC Nominee Lisa Fairfax Is Diversity Advocate and Law Professor (subscription)

Andrew Ackerman – Wall Street Journal

Lisa Fairfax wasn’t the White House’s first choice to fill a vacancy at the nation’s securities regulator. Fairfax has written extensively in favor of shareholder rights, shareholder activism, and gender and racial diversity on corporate boards.

 

The Formation Of A New Senior Executive Committee For EGX

MondoVisione

Financial Calendar

16.03 – Record date ICE $0.85 Q1 dividend

16.03 – Record date NZX 3.0 cents 2015 final dividend

16.03 – BGC Partners $0.14 quarterly dividend payment

18.03 – CBOE $0.23 quarterly cash dividend payment

18.03 – ITG $0.07 quarterly dividend payment

15-18.03 – FIA Boca 2016

New!  29.04 – CBOE Q1 2016 Resultspress release.

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

Crowdfunding

London Turns to Crowdfunding to Open Up IPO Market (subscription)

Max Colchester & Simon Clark – Wall Street Journal

LSE made Syndicate Room a member of the exchange on Monday, allowing the startup’s customers to invest in IPOs and private share placements.

 

Soros, Jefferies Back P2P Startup of Ex-Mortgage Trader

Matt Scully & Dakin Campbell – Bloomberg

Soros Fund Management and Jefferies Group are investing $5 million in a startup founded by former mortgage-bond trader Perry Rahbar that analyzes consumer debt for professional investors. Rahbar’s company, called DV01, helps institutional investors decide which consumer loans to finance through marketplace lenders like Prosper Marketplace and Lending Club.

Other stories

Keynote Address Of CFTC Commissioner J. Christopher Giancarlo Before The National Grain And Feed Association Annual Conference – “What Washington Giveth, Washington Can Taketh Away”

MondoVisione

 

HKEx Publishes Its Annual Fact Book

MondoVisione

 

 

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