March 23 2016

elb2First up, if you are thinking of going to the ICDA event, the former SFOA have given us a discount code for their Blockchain extravaganza. To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUN320” to claim your discount. Here is a link to More Info & I look forward to seeing you there!

In today’s Exchange Invest, JP Morgan backs IEX, shareholders worried DB1 will overpay for LSE, BATS targets an April IPO, BIST looks at 2017…

Meanwhile, as I correctly predicted as they swamped the airwaves, a year ago, it appears FanDuel & DraftKings have agreed to shut down in New York. Readers may recall last year I questioned the logic of their blanket advertising campaigns which in a whole different way defined “March Madness.”

Public Markets

LSEG  Annual Report & Accounts

MondoVisione

Total income £2,381.5 million, up 72%, adjusted operating profit £709.6 million, up 27% and operating profit £499.9 million, up 44%.

PLY: The difficulty is that on the strip out, the numbers don’t look so scintillating, if I understood correctly on a scan, even clearing was suffering margin pressure. Thus investors are wise to prompt:

DB1 Cautioned Not to Pay Too Much for LSE

John Detrixhe – Bloomberg

Some of the biggest shareholders of DB1 are cautioning management…

PLY: A multi-legged stalemate appears to be approaching…perhaps nobody can get LSE through antitrust on CCP (maybe NASDAQ but then they need a lot of leverage…calling the Emirates anybody?…oops $40/barrel, maybe not this week…) & everybody seems to have missed Markit. It has already been an interesting week and indeed exchanges have done nothing so far.

LSE’s Rolet Earns £6.6m (USD 9.4m) In 2015 (subscription)

Tim Cave – Financial News

LSE handed its CEO Xavier Rolet, who is set to step down after its planned merger with DB1, a pay package worth £6.6m (USD 9.4m) for 2015 – the highest annual package since he joined the group – and is set to hike his salary to reflect his success at the helm.

PLY: Hardly a staggering number – significantly less than e.g. Bob Greifeld last time I looked.

Stock Exchange Chiefs Face Takeover Quiz: MPs Set To Question Bosses Because Tie-Up With German Rival ‘Must Not Go Unchallenged’

James Burton, Daniel Martin & James Salmon – Daily Mail

PLY: I think the questions in the upper House from Lord Myners are the most pinpoint in their resolute concern about London losing power in the Frankfurt takeover.

Let’s Not Rush This SE Merger

Nick Goodway – Evening Standard

PLY: If the LSE’s Dickensian Department of Agitprop already has the London Evening Standard pushing back, this suggests the battle for hearts and souls is being lost. The Standard is traditionally a pro Business and heavily pro City cheerleader. (One thing interested onlooker outside the parish find confusing is how – if LSE was such a titan of doing deals, it has suddenly folded for zero premium into the arms of a competitor… – “XavRol,” “petard” and “hoist” are the words to arrange in an optimal sentence here methinks).

QV Premium: DB1-LSE Merger Brief.

 

LSE Pushes CurveGlobal Launch To Q3 (subscription)

FOW

LSE has delayed the launch of its new rates exchange, CurveGlobal, to Q3 of this year.

PLY: Already 24 months and more in the making but with this consistency of non-delivery, the Groundhog Day jokes just won’t go away…

 

Jefferies Seeks $4 Million Fee in Suit Against BGC, Gooch

Zeke Faux & Patricia Hurtado – Bloomberg

Jefferies Finance says it’s owed $4 million, and it wants broker BGC Partners & Michael “Mickey” Gooch to pay. In a lawsuit filed Monday, Jefferies demanded fees it claims it earned after agreeing to provide financing for GFI Group’s 2014 plan to sell itself. According to the complaint, Gooch’s investment vehicle first said it would pay the fees and later refused.

The case is at least the sixth growing out of the GFI transaction. In lawsuits that settled last year, GFI investors claimed board members, including Chairman Gooch and CEO Colin Heffron, pushed to sell the firm to CME for $4.55 a share while hiding the fact that Howard Lutnick’s BGC made a better offer. Directors agreed to a $10.75 million settlement.

QV Premium: BGC – CME – GFI Brief.

 

J.P. Morgan Executives Say Regulators Should Approve IEX As Exchange (subscription)

Dave Michaels – Wall Street Journal

The country’s largest bank is siding with upstart market IEX Group in its effort to create a new stock exchange that pledges to be a haven for long-term investors.

PLY: Big sell side endorsement for IEX as the SEC continues to vacillate over a decision.

Is the Stock Market Still Rigged?

Taylor Tepper – Time

 

SEC’s White: U.S. Should ‘Harmonize’ Broker-Dealer Rules Across Agencies

Reuters

Testimony On FY2017 Budget Request Of SEC, by Chairman Mary Jo White, Before The Subcommittee On Financial Services & … House Of Reps

MondoVisione

 

LME Walks Fine Line Between Beasts Of Aluminium & Regulation

Andy Home – Reuters

LME has just announced proposals for a new layer of regulatory oversight in the form of “accountability levels”. At first glance they look like position limits. But they don’t actually limit the size of positions held and won’t prohibit the sort of massive position that has just created another bout of turbulence in LME aluminium spreads.

 

ESMA To Cooperate With South Korean Regulators On CCPs

MondoVisione

PLY: ESMA doing well as finally EU CCP recognition is pushing forward – late but at least the movement is in the correct direction.

 

Esma Keen To Remind Commission Of Deadlines As Mifid II Rumbles On (subscription)

James Rundle – Financial News

Esma will start work immediately on amending key Mifid II rules that were sent back to it for revision earlier in March, but warned that proper procedure is not being followed.

Private Markets

BATS Set to Move Forward With April IPO Plans

Charlie Gasparino – FOX Business

In January Bats has officially filed for an IPO with US regulators.

 

BIST Plans 2017 IPO

Claire Milhench – Reuters

Borsa Istanbul (BIST) plans to sell around 40% of its share capital next year via an IPO, its CEO, Tuncay Dinc, said on Tuesday. Dinc had said last September that earlier plans for an IPO in 2016 would likely be derailed by low market valuations. The ratio of shares allocated for the IPO is expected to be around 42.75%, corresponding to the Turkish government’s majority stakeholding. Dinc declined to give an estimate of the stake’s potential value.

PLY: Interesting. Turkey has political issues but the biggest problem for a BIST IPO may be that the cornerstone round only seems to have snagged EBRD last year… Certainly there appears to be a marked reluctance to value BIST currently at anything above the level NASDAQ entered when they swapped tech for equity, although I don’t believe EBRD ever made it clear what they paid for their 10% stake.

 

Interview: NSE Sees ‘Strong Pipeline’ For IPOs

Reuters

National SE (NSE) expects to see a good number of IPOs this year across a variety of sectors, its CEO Chitra Ramkrishna said on Tuesday.

PLY: Good. NSE remains a great entity while it has to be said, dig below the surface and we are finally seeing evidence of economic reform by the Modi government which can only benefit the nation and its citizenry alike…

Special Section: FTI, NSEL, India at the Crossroads

PLY: …but alas NSEL still festers unresolved, showing how much work needs to be done on the Indian blob. MCX is flattish, FTIL down 1%.

Products

CME & Thomson Reuters to Enhance LBMA Silver Price Benchmark

CME

These new measures follow the introduction of a circuit breaker in January 2016 aimed at further developing the LBMA Silver Price Benchmark and protecting its integrity. The auction may be stopped, reset & restarted to address significant price movements during the auction, which are inconsistent with the underlying market.

The new measures are:

  • Introducing a blind auction
  • Sharing the imbalance in the auction
  • Increasing the predefined threshold

The measures, which have been approved by the independent Oversight Committee, will be implemented on 16 May 2016 and become part of the Participant Rule Book and Platform Calculation Methodology.

 

Securitisation Does Not Deserve Toxic Tag (subscription)

Alexander Batchvarov (head of international structured finance at BAML Global Research)- Financial Times

Sector must be revived to help the European economy.

PLY: Mr Batchvarov uses the Brussels Blobs’ daily comic to make a very serious point. If securitisation is toxic, then clearly so too is Brussels, the EU as a whole, vast swathes of the Eurozone and much else. Equally, there is every reason to increase securitisation as a means to see some life in EU economies, even if the Euro or the Union itself cannot survive the upheaval of such surgery.

 

Violin Memory & Stream Financial Launch FlashSync for Ultra-high-performance Data Aggregation

Violin Memory

PLY: Today’s distinctly interesting data news.

Indexes

CESC Announces Launch Date For Gaming Index

MondoVisione

Further to 29 February 2016 announcement, the CES Gaming Top 10 Index (CES G10) will launch on HKEx 18 April 2016.

Career Paths

Broadridge named Robert Revesz as Senior Director, with a focus on reference data client services and implementations. He joins Nathan Wolaver, Michael Sunwoo & Tim Versteeg, all of whom have joined the firm recently from Asset Control and are focused on strengthening the Managed Data Service solution.

Financial Calendar

24.03 – ICAP – TNT – vote on transaction

New! – 20.04 – SGX Q3 Results FY2016

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

Share Notes

In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has sold a total of 2049 shares. New holding is 5007 shares. Employees paid a share price of NOK 84,01, but were allowed a discount of 20% on purchases up to NOK 625.

Other stories

AFME: What Would ‘Brexit’ Mean For Europe’s Capital Markets? – Clifford Chance Report Analyses The Legal And Regulatory Challenges

MondoVisione

 

Regrouping For A Renewed MiFIR Compliance Effort

Michael Shashoua – Waters Technology

Inside Reference Data gathers together leading data management professionals to discuss issues raised by the Markets in Financial Instruments Regulation.

 

ESMA Publishes Translations Of Its Guidelines For The Assessment Of Knowledge & Competence

MondoVisione

 

ASIC Consults On Remaking ASIC Class Orders On Financial Services Disclosure

MondoVisione

 

British & Australian Financial Regulators Sign Agreement To Support Innovative Businesses

MondoVisione

 

IOSCO Annual Conference 2019

MondoVisione

PLY: ASIC / IOSCO Chairman Greg Medcraft to host the event in Sydney.

 

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