March 30 2016

elb2The ASX has further reason to question the Elmer legacy of legendary proximity to government, as the Australian Treasurer correctly opens up clearing competition. Despite ASX agitprop, this is a smack in the face to the incumbent monopolist and welcome progress for free markets.

Meanwhile, BIST clearing house TakasBank has been designated QCCP by the CMB. Hopefully ESMA recognition will follow in short order now that IOSCO compliance has been recognised.

Bombay prepares its IPO paperwork as ICE unveils its annual report laden with nuggets to remind us just how stunning the Sprecherian success story has been.

XavRol makes remarkable statements to FT, which infer he is ahead of the game. Further evidence the the DB1 merger is hitting turbulence & CEO reputation shredding is the growing theme of 2016 (at least, unlike the hapless EFK, CarKen & XavRol are still in situ but both are holed and taking on water). Right now DB1-LSE deal rates about DesperationCon 4 to paraphrase a US security scale.

Elsewhere, in clearing land, talk remains focussed (without accompanying widespread comprehension) on the Blockchain. The former SFOA are offering Exchange Invest readers a discount code for their ICDA Blockchain extravaganza. To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUNG320” to claim your discount. Here is a link to More Info. I look forward to seeing you there!

Finally, if you are in London ahead of the ICDA Blockchain event, try to attend this: Motor Neurone Disease Association – City Vs MND Launch – April 18. David Setters, a fine member of the exchange parish is the man behind the enterprise and is a sufferer himself….  

Public Markets

Australia Ends ASX Equity Clearing Monopoly, Treasurer Says

Adam Haigh – Bloomberg

ASX will cut its equities clearing fees by 10% from the start of July and will remain the sole provider of cash equities clearing until the government’s conditions for effective competition are established. Australia will also loosen ownership restrictions on ASX, Treasurer Scott Morrison said.

PLY: I suggested some months ago the Turnbull government could take a turn towards free markets and indeed here is clear proof. Foreigners can now buy up to 15% in ASX while the equity clearing monopoly is up for grabs (presuming somebody can find the economies of scale to deal in a relatively small market with a hugely powerful monopolist).

ASX Welcomes Certainty On Market Structure For Equities Clearing & Change In Ownership Restrictions


QV Premium: ASX Monopoly – Brief – Part 3.

PLY: Admirable chutzpah from ASX in the face of what is a clear slap in the face for their ongoing legacy of Elmer being both a highly competent CEO and in close proximity to government, messaging. At the same time, the messengers of ASX deserve credit for at least maintaining a dogged professional approach. I don’t often see things the way they are paid to but their operation is highly professional. Moreover, as evidenced by the unthinking copy pasting of much domestic media, highly effective too.


ICE 2015 Annual Report


PLY: From 200 employees and $156 in revenue in 2005 to over 5500 employees and – wait for it – $3.3 billion in 2015 revenue! That fact alone underpins why every other market is just average in the face of the ICE decade. To keep the legacies on their toes, I note with excitement the simple statement by Chairman / CEO Jeff Sprecher in his opening remarks: “our drive to serve markets is only increasing.”

If other markets read that and feel a ‘fight or flee” response then at least legacy markets are finally starting to shake off their colloquial bygone days.


Rolet Warns Rivals Must Adapt As Markets Reshape (subscription)

Philip Stafford – Financial Times

LSEG says its rivals have to adapt to rapidly changing global financial markets or face losing customers, and the shifting sands have driven its proposed $20bn all-share combination with DB1.

PLY: Remarkably unquestioning agitprop reporting of what Xavier says with a tiny sprinkling of logic from Jean-Pierre Mustier at the end – presumably to show that even Frenchmen in the London diaspora don’t agree on this deal. What worries me is that Xavier is either delusional or just desperate to get his big payoff (a recurring theme in my Inbox). This remark is plainly bizarre: “The way we look at this is we’ve got to be pushing a little bit ahead of the rest of the industry.”

After all, the ‘Merger of Equal Desperation’ proposed by DB1 and LSE is precisely an attempt to catch up ground lost through previous generations of inept management. Pushing ahead involves being in the lead in the first place when in reality LSE is at least a lap behind while DB1 can just about glimpse the lead group on the longer straights.

Fighting to unlap yourself is no more leadership than a “merger of equals” is convincing. It’s gritty and it’s tough and that is what has been exciting about the now essentially ended Xavier era at LSE.

LSE has never been in front during the digital era while DB1 was right up amidst the leading peloton but clearly somebody fell off the bike and forgot to start pedalling again…

XavRol did a lot to make LSE into a serious competitor but now the overwhelming perception of my Inbox is that he seems to have just abandoned the cause of delivering LSE value to cash in…


NZX Annual Report 2015 Published



ICE Rule 2.10 Announcement


PLY: Rumour has it, that in corporate boardrooms from Eschborn to Paternoster Square, senior executives can’t even enjoy a calming gin after hours without the ugly phrase “and what about ICE?” rearing its ugly head…


IEX’s Ambitions To Test SEC’s Rules (subscription)

Nicole Bullock – Financial Times

Caught between a desire to promote competition and apply their own rules, the main regulator of the US equity market could well end up exacerbating the complexity of buying and selling shares for investors.

PLY: Given the whole thrust of Reg NMS was needless complexification why is there a problem now? The mindless scaremongering of protectionists scars the debate for both IEX regulation and the hideous pantomime of stupidity without factual recourse which is the debate about Britain’s EU referendum.


Exchanges Condoned Alleged Spoofer’s Trades, Ex-Partner Says

Matthew Leising – Bloomberg

Edwin Johnson, who co-founded 3Red Trading, is locked in a legal dispute with Igor Oystacher over terms of his departure from the firm. In a court filing this month in that litigation, Johnson described meetings he had with FBI agents in 2014 about his partner’s trading. He told those agents that CME Executive Chairman Terry Duffy and David Goone, the chief strategy officer of ICE, and two others had given him “false assurances” that “Oystacher’s trading practices were legal and legitimate.”

PLY: Quite a charge to make if there is no documentation to support it…


Sebi Tightens Noose On Commodity Exchanges

Business Standard

Sebi has directed commodity exchanges to comply with the provisions of client code modifications in equity markets within one month.

PLY: As always deft diplomacy evades SEBI enforcement in the wake of their takeover of the commodities regulator FMC.

Private Markets

Bats Global Markets to Acquire


Bats signed a definitive agreement to acquire, a leading provider of ETF data, news and analysis. The transaction is scheduled to close April 1, 2016, subject to customary closing conditions, and will become an independent media subsidiary of Bats.

PLY: An interesting content play as BATS realises the difficulty of competing for equity listings – at least for now – with the country clubs and concentrates on its ETF segment where the issuer & underlying index provides brand ‘coverage’ for the exchange.


BSE Aims For Up To Rs800 Crore (USD 120 mln) IPO This Year

Swaraj Singh Dhanjal & Ankit Doshi – Livemint

The stock exchange is working on regulatory aspects of the IPO; with the draft share-sale prospectus expected to be filed before end of April-June quarter.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 1.5%, FTIL up 3%.


Americas Trading Group Joins with Fidessa to Offer Brazilian Algorithms to a Global Audience


The new collaboration provides Fidessa OMS and connectivity network users with access to ATG’s highly specialized algorithmic trading models in the Brazilian market, which are locally hosted in Equinix data centers, close to the BM&F BOVESPA exchange in São Paulo.


ICAP’s Jenny Knott Explains Practical Post-Trade Blockchain Approach

Ian Allison – IBT

Recently ICAP released details of a proof of technology using blockchain including a partnership between ICAP and newly-launched enterprise blockchain provider Axoni.


Ghana CSD Successfully Migrated Accounts Onto New MCSD Platform

News Ghana

Central Securities Depository (Ghana) has successfully migrated securities accounts including bonds, treasury bills and shares from the dormant Ghana Stock Exchange Security Depository (GSD) and CSD onto a new platform, Millennium Central Securities Depository System (MCSD).


Euronext To Add More Wheat Silos At Ports, Mulls Inland Warrants

Valerie Parent & Gus Trompiz – Reuters

Euronext is to expand the number of port delivery points for wheat traded on its Paris-based futures market and is considering a system of storage certificates to cater for inland grain operators.


Blythe Masters Firm Gets Foothold In Repo Market With DTCC Deal

Annie Massa – Bloomberg

DTCC said it plans (press release) to work with Digital Asset to bring blockchain to repos. The project will begin immediately.

PLY: A side step into Repo is very interesting for DAH, the sort of tricky to reach spots that CEO Blythe Masters’ experience derives from.

Special Address Of CFTC Commissioner J. Christopher Giancarlo Before DTCC 2016 Blockchain Symposium – Regulators & The Blockchain: First, Do No Harm


PLY: Pity the Obama regime didn’t get that “do no harm” priority.


Cleartrade Coking Coal Launch Delayed (subscription)

Julie Aelbrecht – FOW

…as CLTX awaits the regulatory approval for the new products.


REGIS-TR Enhances Services For Swiss Reporting Requirements



Tokyo Financial Exchange: Extension of Discount Program In 3-month Euroyen Futures



Buyside Body Latest To Call For Mifid II Bond Changes (subscription)

Tim Cave – Financial News

Europe’s fund management trade body has pressed for further changes to be made to bond transparency rules under Mifid II, which is undergoing a last-minute revision by EU regulators.


GPW Extends Reduced Transaction Fees


Reduced transaction fees on trade in WIG20 futures will apply until the end of H1 2016. Furthermore, GPW waives fees charged to market makers of SME stocks until the end of September. The reduced transaction fees are in place since 1 January 2016.

PLY: GPW remains an expensive venue in the region overall and now faces the worst environment for cost cutting: a government hostile to markets and has abandoned privatisation but then again political tinkering behind the scenes has robbed the Warsaw Exchange of corporate advantage over recent years. It’s difficult to see how it survives without radical surgery.

Career Paths

Bats signed a definitive agreement to acquire ETF.comDavid Lichtblau, CEO of, will remain in that role and report directly to Bats EVP & Head of U.S. Markets Bryan Harkins.

Financial Calendar

30.03 – NZX 3.0 cents 2015 final dividend payment

31.03 – ICE $0.85 Q1 dividend payment

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

Other stories

SEC Chairman Mary Jo White: The Fund Director In 2016: Keynote At Mutual Fund Directors Forum Policy Conference


SIFMA Asset Management Group Recommends Improvements To The SEC Proposed Rule Regulating Fund Use Of Derivatives



Motor Neurone Disease Association – City Vs MND Launch – April 18


PLY: Pioneered by sufferer David Setters, this is a great initiative and I hope the launch goes supremely well.


FIA Releases SEF Tracker For February 2016



ASIC’s Latest Enforcement Report Outlines Key Outcomes & Areas Of Focus For The Future



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