MARCH 16 2017

Exchange Invest celebrates Issue 953 with a look at the magnificent Porsche 911SC Group B evolution, deployed more in rallying than racing. Four wheel drive turbo monsters soon took over but the sheer elegance of this ultimate 911 rally car was nowhere in greater evidence than on the Irish tarmac championship where I recall following a Circuit of Ireland rally with the Billy Coleman and Bernard Beguin – simply brilliant drivers both – in a brace of magnificent Rothmans liveried cars.

Quote of the Day:

Quote Of The Day

“It is interesting to note that in 2016 there were more IPO companies with a market cap between £0-£20 million on the Main Market than on AIM, whereas there were more on AIM between £100 million and £500 million. Is this a sea-change?”

From the QCA Investor Survey
In Today’s Exchange Invest

ICE moves forward, Reuters reckons some banks are struggling to keep up. Former WFE boss lets rip at US Congressman, GPW has a temp boss until they find a suitably pliant doctrinaire candidate to suit the government’s erratic whim. Interesting survey from the UK Quoted Companies Alliance (as quoted above)…

The highlight of Boca has clearly been the Giancarlo speech which outlines a focussed approach to the deregulatory agenda I have for several years, noted was on the launch ramp.

And there’s more, happy scrolling:

In BigWorld

Interest rates are up – sightings of the yield curve alleged to be breaking out across middle America. Let the good times really get rolling for the STIR markets folks at CME and ICE, those Euro-contracts have lain relatively dormant for too long.

Relief in the Netherlands that the rather odious racist stream of politics has been halted may be premature – the governing parties all lost seats but they can still combine to keep Geert Wilders’ out of office (‘underpopular populists’ as it were – although his party did increase its parliamentary representation). The raw maths looks to be at odds with what may prove short term relief if the blob doesn’t get with understanding the voters’ problems. Ironically Britain has been accused of harbouring radical politics because voters chose to leave the EU but that was a pragmatic outcome drawing support across the political spectrum whereas the raw politics of mainland Europe look increasingly ugly in many places as the establishment tries to close ranks and keep the EU dream alive.

Meanwhile in the UK, the May government has U-turned away from the worst of its recent tax raising budget.

Public Markets

Exclusive: London Gold Rush – ICE To Launch Clearing Before Banks Are Ready

PLY: A curious slant on an interesting issue. ICE has prepared, organised and managed. Some banks are not capable of this but there is a suggestion here that the exchange must wait to provide the service when all parties are ready. That surely surmises the problems of the gold market. ICE cures problems, banks are variable in the latter regard.

Acting CEO For Warsaw SE

PLY: Now the regulator has agreed the outgoing CEO can be put out of her misery and allowed to leave her office (not that she ever left it when she was, ahem, ‘in charge,’ allegedly), the Warsaw SE can now be run by supervisory board member Jarosław Grzywiński, until they find a replacement and anyway not longer than 3 months from March 15th. I must admit I can’t wait to see who passes ideological muster for their political masters this time around…

QCA/RSM Investor Survey

PLY: Interesting survey from the UK Quoted Companies Alliance discussing attitudes to SME listing / AIM et al which is overall positive. Some good pointers such as the importance of investor pro active Chairmen in smaller caps and a sensibly pragmatic and practical guide for companies approaching the Brexit uncertainty.

Give Us Global Standards or Give Us Chaos – Open Letter to US Congressman McHenry

PLY: Former WFE Secretary General Tom Krantz lets rip at a member of the political class who appears in danger of photosynthesis.

Remarks Of Acting Chairman J. Christopher Giancarlo Before The 42nd Annual International Futures Industry Conference In Boca Raton, FL – “CFTC: A New Direction Forward”

PLY: Clearly the headline draws the conclusion that there has previously been “a new direction backward” and this era is now over. A very interesting speech. The manifesto for the Giancarlo Chairmanship emphasises quality over quantity “right-sizing” the regulatory footprint as Chairman Giancarlo calls it, as well as a generally pragmatic approach to helping derivatives function which marks a welcome break from the recent past. POTUS may have his flaws but if his team can deliver more competitive US markets then it is great news for the world albeit very bad news for those regions in max atrophy mode.

SGX Plans To Use Baltic Exchange As Beachhead Into Europe
Financial Times

PLY: Pretty obvious stuff but given this is a very rare sighting of a low profile CEO outside his office, it is worth reporting.

FXCM (Non-US) Volumes Drop 21% In February To $201 Billion

Retail Forex broker FXCM has announced its volume results for February, the last month for which FXCM had both US and non-US volumes to report.

PLY: Could this be the death throes of an operator proven dodgy by the SEC?

Exchange Chiefs Play Down Regulatory Divergence
FOW magazine

The world’s top exchanges sought to play down the possibility of regulatory divergence between the US and Europe.

PLY: Logical politics, why would exchange execs want to get in the crossfire between a US which wants economic growth and an EU which wants verdant green fields by strangling anything which isn’t grass?

Virtu In Unsolicited Offer For HFT Rival KCG
Financial Times

PLY: Life moves on and the news is outside the rats’ mouth. Struggling KCG is being bid for after another couple of troubling quarters.

Pensioners Sue Euronext Scheme For Mismanagement

Three former Euronext staffers are suing Mercurius which was the pension fund for communication watchdog Authority Financial Markets, Euroclear Netherlands and LCH Clearnet Amsterdam amongst others.

PLY: Perhaps remarkably, it is difficult to pin the blame for this on Duncan the Value Destroyer. However who knows, more data may yet emerge.

China Enhances Crackdown On Capital Market Fraud
Global Times

Private Markets

Qatar Exchange Says IPO Requires Decision By Shareholder

“There are no discussions taking place about an IPO between the exchange and its shareholder currently,” Rashid Ali al-Mansoori told reporters.

DTCC-Euroclear Global Collateral LTD. Launches New Service To Deliver Cross-Border Collateral Mobility

MSCI Denies Takeover Talk After Report Of S&P Global Bid

PLY London Evening Standard apparently first mentioned an $11 billion bid may be emerging…

Funderbeam See Platform Expands To Slovenia To Support Startups

Misys Merges With Canadian Rival

PLY: So the PE owners will try to IPO a yet bigger, fatter, legacy vendor soon enough… Does anybody think there may be a slight flaw in this plan or am I just mansplaining again?

Special Section: FTI, NSEL, India at the Crossroads

No news today.


Eris Swap Futures Now Supported On Bloomberg TOMS – Sell-Side Clients Equipped To Add Capital-Efficient Eris Swap Futures To Their Fixed Income Portfolios

Bitcoin User Base Doubling Every 12 Months: Google Trends

NBU Seeks To Stir Up Transactions With Currency Swaps

PLY: That’s National Bank of Ukraine before you start wondering if it’s a US basketball playing institution of political correctness and arguably education.

BTW a gremlin got into the system yesterday and replicated the NASDAQ release on the cash system a while back as opposed to the BIST derivatives market going live on NASDAQ which actually happened this week. Apologies for that.


CME Group To Serve As Administrator For Market Agreed Coupon Swaps Contract

CME will serve as the administrator for SIFMA Asset Management Group’s (AMG) Market Agreed Coupon (MAC) swap contract, which was previously administered by SIFMA. MAC swaps are interest rate swap (IRS) contracts with pre-defined, market-agreed terms developed by SIFMA AMG and ISDA in 2013.

BM&FBOVESPA Presents Final Proposals For The Novo Mercado And Level 2 Regulations That Will Be Put Before A Closed Hearing – Voting Phase Of The Closed Hearing Occurs June 01-23,

Derivatives Exchanges Want Multi-Product Retail Customers. Why Not Offer Odds On The Cheltenham Festival?
FinanceFeeds (blog)

PLY: Much more exciting than Boca Raton and with arguably even higher per capita alcohol consumption, the Cheltenham festival is the world’s greatest horse racing extravaganza for jump jockeys. An old idea revisited here as posited by the likes of me over 20 years ago (and not in isolation, albeit at least I had a punt as a cofounder of GSX/Intrade/Tradesports as did Betfair who of course eventually went semi-ex-growth as a pure exchange and got bought by a bookmaker, Paddy Power…). On course betting turnover at Cheltenham btw is 150,000,000 GBP annually and with tomorrow’s Gold Cup falling slap bang on St Me’s Day, expect a bumper day’s betting.

Singapore Exchange Risks A Race To The Bottom On Dual-Class Shares
Financial Times

PLY: Unlike the Cheltenham Gold Cup this tawdry race won’t bring joy to millions of fans.

Career Paths

PLY: FINRA has appointed Nathaniel Stankard as Senior Advisor to the CEO, effective immediately. In his new position, “Stankard will provide counsel and strategic advice to President and CEO Robert W. Cook and FINRA’s senior management, and will assist with special projects.”

The hugely experienced Per Andersson formerly of Orc and Pantor, has been appointed Head of Sales and Business Development for specialist exchange vendor Baymarkets.

The IMF has created a high level advisory group on FinTech with members:

Jeremy Allaire, Chief Executive Officer of Circle
Dr. Long Chen, Chief Strategy Officer of Ant Financial Services
Santiago Fernandez de Lis, Chief Economist of Financial Systems and Regulation at BBVA
Robert Garrison, Managing Director and Chief Information Officer at the DTCC
Chris Larsen, Executive Chairman of Ripple
Adam Ludwin, Chief Executive Office of Chain
Blythe Masters, Chief Executive Officer of Digital Asset
Greg Medcraft, Chairman of Australian Securities and Investments Commission
Professor Robert Merton, MIT Sloan
Patrick Murck, Fellow at the Harvard Berkman Klein Center
Marco Santori, Partner at Cooley LLP
Alex Tapscott, Chief Executive Officer of Northwest Passage Ventures
Carolyn Wilkins, Senior Deputy Governor at the Bank of Canada,
Bradley J. Wiskirchen, Chief Executive Officer of Kount


Crowdfunding Will Change Philanthropy—But How?
The Nonprofit Quarterly (registration)

Could Crowdfunding Help Solve Sweden’s Housing Woes?
The Local Sweden

P2P Lender Zopa Introduces Waiting List For New Investors

Other Stories

PLY: Clearly our ruthless approach to the worst excesses of Boca-bilge PR hooey is abbreviating this newsletter – welcome news.
Many thanks for reading Exchange Invest, interesting times are upon us once more…


Patrick L Young
Executive Director DV Advisors

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