March 29 2016

elb2Unhappy ending to the Filipino dream  – after more than a year of drama, the regulators nix stock-bond exchange tie up…there may be a lesson in there for some first world folks methinks.

Better news for ICAP: Tullett shareholders have approved the great voice broker bulk up strategy leaving CEO Phizackerley to play the ebitda shuffle by edging revenue up while losing headcount. At the same time, it means a real star is born in the electronic platform world – and the ICAP stock is surely headed up with some gusto…

Welcome to Yangon SE whose first trade adds it to this parish while regional access topics are big on the agenda as STT deploys in the Caribbean and EBRD touts its SEE Link ahead of launch today (Good luck!).

Meanwhile if you missed the last fortnight through holiday, start the first day after Easter with a Twix to help you Understand CCP & the AntiTrust DB1-LSE Merger.

Public Markets

Tullett Prebon Shareholders Approve ICAP Deal


Tullett Prebon press release

ICAP press release

QV Premium: Exchange Deals Brief.

PLY: With Markit betrothed to a big data control play, ICAP is now the undisputed pure play belle of the ball in London’s market structure albeit with the caveat that Michael Spencer drove the business from nothing to here and hasn’t expressed a desire to pack his bags… Then again, as I noted in Premium weeks ago, there’s a vacancy at the top of LSE and actually an ICAP-LSE tie-up is a lot more sensible than DB1-LSE and doesn’t hit the semi-inevitable buffers with antitrust either.


SEC Nixes Merger Of Philippine Stock, Bond Exchanges

Cliff Venzon – NIKKEI

SEC rejected Philippine SE’s proposal to take over Philippine Dealing System Holdings, which owns the companies that operate the nation’s bond exchange. PSE failed to present “clear and convincing evidence” that it is exempt from a ban on ownership of more than 20% of the voting rights in an exchange, the SEC said.

QV Premium: PSE – PDEx Merger Brief.

PLY: Finally the soap opera is over, albeit the SEC could surely have made a decision earlier?


Where’s the Bid Battle for LSE?

Chris Hughes – Bloomberg

LSEG shareholders are starting to doubt whether there will be an auction for company that sends their stock soaring. They may be being too nervous.

PLY: QV the dynamics of the Starwood bid in horeca…why bother competitively bidding before a long holiday weekend? Much better to let the investment bankers guzzle Easter eggs nervously with their families than let them have days to digest a rival bid…

German Resistance Grows To LSE Merger

Marion Dakers & Ashley Armstrong – Daily Telegraph

LSE’s merger with DB1 is coming under fire in Germany, with politicians and industry veterans speaking out against the deal amid fears that Frankfurt’s status as a financial hub will be eroded.

PLY: I suspect Frankfurt will do more to kill the bid prior to going to antitrust although it is based on a delightfully fallacious observation – that the niche regional centre Frankfurt, is actually a major financial centre.

Let the LSE’s Ill-Matched Union Go No Further

Ben Marlow – Daily Telegraph

With almost every passing day, it seems, the likelihood of LSE pulling off a merger with DB1 diminishes that little bit more.

PLY: “Deutsche Boerse’s bungling boss Carsten Kengeter…” notes Mr Marlow. It has to be said the man nicknamed “CarCrash” by some London brokers, does exude the air of a man whose coat tails retain flames licking around his rear flanks as a result of a baptism of fire leaving him internally exposed…that said there’s a bit of movement in the Career Paths section.

QV Premium: DB1-LSE Merger Brief.


Smaller Exchanges Fight To Survive In World Of Behemoths

Claire Milhench – Reuters

If smaller exchanges don’t find a way of clubbing together, they will be taken over, or squeezed out altogether, said Hannes Takacs, a senior manager at EBRD.

In an effort to boost liquidity in some of the smallest markets, EBRD has given a 540,000 euro ($600,000) grant to start SEE Link, a regional platform for trading securities on south-east European bourses. SEE Link’s order routing system is expected to go live on March 29 with the participation of its founder members, the Bulgarian, Macedonian and Croatian stock exchanges. Serbia and Slovenia have confirmed they will join and Bucharest SE CEO Ludwik Sobolewski told Reuters that Romania could sign up later this year.

QV Premium: SEE Link Project Brief.

PLY: I disagree with the squeezing out notion – the scale dynamics suggest otherwise..the big cannot get down to the regional level (even Warsaw at its zenith was an unpalatable morsel for the majors).  First up, CEE SEE exchanges need their governments to engage – on which point I think we all agree. The difficulty is establishing niche presence which is where SEE Link can clearly help as a means to regional market access. Then again, is the problem really the exchange dynamics or the legacy vendor oligopoly who squeeze access?


Appeals Court Upholds Determination That CBOE Patents Are Invalid


Gary Katz, ISE President & CEO, said, “We are very pleased that the Appeals Court upheld the PTAB decision which invalidated the CBOE patents and that we can finally put this matter to rest.”

PLY: Good for markets methinks, as various entities reduce a stranglehold on market access which harmed options (& beyond…).


HKEx Responds to Media Enquiries on HKEx- SZSE Stock Connect


PLY: Li speaks, media scrum ensues, HKEx not privy to speech…but enthused by the tone of the remarks.

QV Premium: HKEx – SZSE Stock Connect.


U.S. Judge Rejects 14 Banks’ Bid To Throw Out Rate-Rigging Lawsuit


A federal judge in Manhattan on Monday rejected an effort by 14 of the world’s biggest banks to throw out a private lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.


FESE Response To ESMA Consultation Paper On Guidelines On Transaction Reporting, Reference Data, Order Record Keeping & Clock Synchronisation


Private Markets

Saudi SE: Converting The Securities Depository Center To A Joint Stock Company



Myanmar Stock Exchange Opens Trading

Japan Times

Yangon SE (YSX) officially started trading Friday, more than three months after its official opening, though only one listed company was available for transactions.

PLY: One listing is better than none and Yangon is a welcome addition to the exchanges of this parish.


‘Fantasy’ Stock Trading In ASIC Sights

Georgia Wilkins – SMH

The corporate watchdog has warned online gaming companies offering fantasy stock trading they could be in breach of the law.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL down 2%.


New Trading Platform Puts Caribbean SE In Sight

The Gleaner

The stock exchanges in Jamaica, Barbados and Trinidad & Tobago will migrate to a new Web trading platform this year that will bring the exchanges closer together with the option of integration.

Securities Trading Technology (STT) has won the contract to provide the new trading platform to the three exchanges, said JSE GM Marlene Street Forrest.

PLY: Good win for STT and an interesting development in the Caribbean.


Regulator Moves to Create New Fintech Framework (subscription)

Rachel Witkowski – Wall Street Journal

Office of the Comptroller of the Currency to issue white paper this week aimed at kicking off discussion on how best to regulate fast-growing sector.


ISE Mercury Completes Additional Product Rollout – More Than 3,200 Products Listed For Trading Since February Launch


PLY: Typically adept management by ISE.


MOEX Interested In Developing Diamond Exchange Trade



DCCC Expands Collateral Basket To Include Major Currencies


Dubai Commodities Clearing Corporation (DCCC), the CCP for DGCX, said that clearing members will now be able to deposit cash collateral to the corporation in the form of euro, GBP and JPY in addition to UAE dirhams and USD.


OCC Comment Letter On SEC Fund Use Of Derivatives Proposal


Career Paths

Bloomberg reports that DB1’s chief lobbyist, Frank Klaas, will leave at the end of this month (DB1 press release), potentially weakening the exchange operator’s lobbying muscle in Brussels at a time when the company is attempting to buy LSEG.

PLY: Sorry to see anybody lose their job (particularly a fellow petrolhead) but this must be the start of a radical upheaval of management if DB1 is to actually be capable of managing its PR, IR, Marketing & Communications. Maybe it has a short term impact in Brussels but it is a price worth paying to achieve coherence. The chaos which has left the CEO branded “CarCrash” amongst other stinging epithets marks DB1 as dysfunctional…where once it had a strong reputation for brand management. I don’t believe this is a panic reaction but clearly the process needs to speed up – even an independent DB1 post bid failure will benefit enormously from a revamp to unleash the value already within the enterprise that is going unnoticed due to the ongoing buffoonery of the utterly incoherent marketing/PR/IR nexus.

Reuters reports that Nasdaq appointed Tal Cohen, the former head of Chi-X Global, to run its North American equities business. Cohen, who was a MD at Instinet before becoming CEO of Chi-X Global, will report to Tom Wittman, Nasdaq’s global head of equities, starting April 12.

Walt Smith, who currently leads Nasdaq’s North American equities business, will transition to a new role as head of Nasdaq’s Global Access Services business, which includes exchange connectivity and post-trade services.

PLY: Interesting new hire for NASDAQ.

TASE Chairman Reportedly Trying to Oust the CEO of Israeli Exchange

Shelly Appelberg – Haaretz

Amnon Neubach thought to be disappointed with the performance of Yossi Beinart, who took the reins of the Tel Aviv SE in 2014.

PLY: Generally not much news emerges from TASE and what does hit the streets beyond Israel is nowadays a tedious cycle of daggers drawn. I have no doubt TASE has a huge mentality problem which needs to be more “startup” nation but it’s tough at this distance to know who can drive that forward…

Financial Calendar

New! – 28/29.04 – SIBEX EGM & AGMpress release

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

Other stories

Bursa Malaysia Amends Listing Requirements To Strengthen Framework For Disclosure & Exercise Of Shareholders’ Rights



ASEAN Capital Market Regulators Roll Out Initiatives Under ACMF’s New 5-Year Roadmap


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