May 13 2015

elb2The Return of Crossfire & Other Conference News

Ladies & Gentlemen, they may not be trumpeting it yet through those wondrous Alphorns but I am delighted to say that the SFOA recovery continues apace. The initial rescue by Chairman Otto Naegeli, is being extended by his successor Dan Day-Robinson who is making masterful efforts to rebuild the association and the European conference with the greatest history in the derivatives industry.

Moreover, I am delighted to have accepted the Chairman’s invitation: Crossfire! is back! I am delighted to be chairing the blue riband panel of leading industry figures on the morning of September 23rd. More news to follow as we line up the panel…I look forward to seeing you in Geneva as the SFOA risorgimento gathers pace.

From a personal perspective, I sincerely appreciate that when Dan Day-Robinson became Chairman he spoke to a great many people about how to move SFOA forward and many respondents expressly encouraged my return. Thank you all.

Meanwhile, for those who want the hard core financial innovation angle, don’t forget 17th September in Warsaw for Young Markets!

Also, I am delighted to be chairing the opening panel At FESE Convention in Oslo in June too! The programme has just been published this morning…

More SFOA Burgenstock Information
More FESE Convention Information

Anniversary News:

A big week for Exchange Invest – Thursday marks Issue 500 and Friday will be our second birthday…

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Exchange Invest Premium:

New Premium post Barking At the Moon: The Hound of Hounslow & other follies

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The latest include:

China Capital Markets Transformation – Commodities Trading & Warehousing Brief Part 1, Part 2
Exchange Infrastructure – Brief Part 1, Part 2, Part 3, Part 4, Part 5 
SEBI-FMC Merger Brief
CEESEG Stakes Sales Brief
HKMEx Fate Brief
Pakistan Exchanges Merger Brief
Flash Crash & Hound of Hounslow – Brief
Taiwan SE Cross Trading Links Brief
India – GIFT Exchanges Brief

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Today in Exchange Invest Daily:

Dan Gallagher to set down early as SEC Commissioner. TMX CEO: data differentiation? Good HKEx results, BM&F still eagerly acquisitive in the LatAM region, is there really widespread exchange interest in Ljubljana? Reto still angry about ancient history as he steps down, Nomura exits swap clearing and much more….

Public Markets

HKEx Q1 Financial Results
HKEx

Revenue and other income HKD 2.79 bln (USD 360 mln), up 20%
EBITDA HKD 2.07 bln (USD 268 mln), up 30%
Profit attributable to shareholders HKD 1.57 bln (USD 203 mln), up 34%
Basic EPS HKD 1.35, up 32%

PLY: Readers may recall earlier this week HKEx’s Q1 2015 profit growth was tipped at 30-50%.

BM&FBovespa Seeks Latin America Bourse Stakes, To Launch ETFs
Reuters

BM&FBovespa wants to expand further across Latin America, following the purchase of an 8% stake in Chile’s Bolsa de Comercio de Santiago, CEO Edemir Pinto said on Tuesday.

CME, which owns a stake in BM&FBovespa, and Nasdaq are among bourse operators increasing their footholds in Latin America and Asia.

Read our Premium MILA Exchanges Brief

TMX CEO Says Wants To Differentiate With Data
Reuters

TMX plans to better integrate its disparate units and make more use of data amid rising competition in the domestic exchange industry, TMX’s CEO said on Tuesday.

“I now have a pretty good handle on both what we do well, and on what we can do better in terms of addressing the complex challenges faced by our customers and how we can provide optimal services in the Canadian marketplace,” CEO Lou Eccelston told analysts on a conference call.

TMX has moved to limit the impact of a rival exchange, Aequitas Neo, with a secondary market for private companies and just last week said it would slash its fees.

Eccelston, whose background is heavy on data analytics, launched a strategic review of the company after taking the top job late last year.

“We’re going to work on solutions that derive more insight and value from the vast amount of data that is generated across our business operations,” he said.

FAO: Last month TMX announced regulatory approval of TSX Alpha Exchange.

Aequitas Neo Exchange, Canada’s newest stock exchange, focusing on eliminating predatory HFT practices, launched at the end of March, run by the folks who created Alpha.

PLY: Data is clearly a key battleground but it won’t save the business from competition – TMX is going to have to rethink a lot of its core focus but there is considerable potential. It will be interesting to see what emerges from Eccleston’s strategic review.

Vienna Bourse Says Slovenia’s LJSE Eyed By European Players
SEE News

Vienna bourse has received interest from various parties within the European landscape for the takeover of the Ljubljana SE (LJSE), Vienna bourse managing board member Michael Buhl said on Tuesday.

LJSE is part of CEESEG, the largest exchange group in CEE which also comprises the Vienna SE and the exchanges of Budapest and Prague.

Vienna SE acquired 81.1% of the Ljubljana bourse in 2008 and later raised its stake to 100%.

In mid-April, CEESEG said it was considering selling the LJSE and that it had received interest from several parties.

PLY: Understandably everybody will have a kick at the tyres and hence will answer the call to have a chat but what is there tangibly in Ljubljana which interests an incumbent exchange bidder? Near neighbours may have a point but beyond that what is there coherently to buy? Then again my cynical side notes the masterful hype of Vienna who were still trumpeting an imminent deal with Warsaw despite the appetite for the deal having waned, at least outside of the mindset of some very self-interested Viennese ‘management?’

QV our Premium CEESEG Stakes Sales Brief

Hong Kong’s SFC Vows To Crack Down On Market Manipulation Amid Rally (subscription)
Enoch Yiu – SCMP

Securities and Futures Commission chairman Carlson Tong Ka-shing has vowed to crack down on potential market manipulation after several small plays exhibited very unusual share price movements in the recent market rally.

Tong said the regulator had a team focused on monitoring unusual share price movements.

PLY: One regulator at least talking tough.

Why China Is Taking Control Of Physical Gold Pricing (subscription)
Valentin Schmid – Seeking Alpha

China is lobbying to be including in the IMF’s reserve currency and gold has a lot to do with that process. Estimates say China has amassed thousands of tons of gold reserves that could rival the US in the future.

PLY: China is solvent, has reserves and the economy is growing. This may be regarded as a stark contrast to the situation in much of the west.

Read our Premium China Capital Markets Transformation – Commodities Trading & Warehousing Brief Part 1, Part 2

Top Securities Regulator Says No Proof Big Funds Pose Systemic Risks
Michelle Price & Lisa Jucca – Reuters

International watchdogs have yet to make the case for labelling large asset managers systemically risky, Greg Medcraft, Chairman of ASIC and board Chairman of IOSCO has said, in comments that are set to further fuel a raging debate over whether such firms can be too big to fail.

Bürgenstock 2015
SFOA

PLY: A favourite old friend is being redrafted for the modern era. SFOA will host its international forum for commodities, derivatives and emerging markets in Geneva on September 22 – 24, 2015. Expect a marvellous meeting and indeed a Crossfire chaired by myself. I am looking forward to the event, in one of Geneva’s more magnificent venues, the President Wilson Hotel.

Croatia, Bulgaria Have Many Common Topics In Terms Of Exchanges
Focus

“Croatia and Bulgaria have many common topics in terms of exchanges,” said Ivana Gazic, President of the management board of Zagreb SE, speaking at the Sound of Money forum held in Sofia.

“In five years, working for the exchange, I talked to five finance ministers in order to explain to them a vertical verification of the exchange is needed. However, they considered the public register needed to be state one. The way we manage projects in Croatia is attempting to make projects important for market development come to the fore,” the expert stated.

“The most important thing is the development of new products on the market. State firms follow their schemes of reasoning in this respect,” Ms Gazic noted.

Read our Premium SEE Link Project Brief

PLY: Both Ivana Gazic in Zagreb and Ivan Takev in Sofia are working tirelessly to improve their markets, they deserve as much support as we can give them in endeavouring to deliver greater prosperity to their respective lovely nations.

Private Markets

Myanmar – Ministry Halts Online Exchange
Jeremy Mullins & Catherine Trautwein – Myanmar Times

A Forthcoming commodities exchange has been suspended following a letter from the Ministry of Commerce stating it is not allowed to operate.

Myanmar firm MICEx had aimed to bring a commodities exchange online in the next few months, but is now left waiting while it discusses the situation with government authorities. While company officials admit they are not ready to launch, they say they had been making progress preparing the groundwork.

PLY: A worrying development, hopefully just a hiccup.

Bitcoin Platform Coinify Expands Service To 34 Countries
CoinDesk

Denmark-based bitcoin platform Coinify has announced its expansion within the Single Euro Payments Area (SEPA) network, enabling customers in 34 countries to buy and sell the digital currency.

SEPA is a EU payment integration scheme that aims to ease euro denominated bank transfers between 28 EU member countries as well as Iceland, Norway, Liechtenstein, Switzerland, Monaco and San Marino.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX is up 1.5%, FTIL up 1% as we have another postponement of the wrong-headed motion to forcibly merge NSEL into its parent.

FTIL Case: CLB Puts Off Hearing To June 30
K.R. Srivats – The Hindu Business Line

The Company Law Board (CLB) has postponed till June 30 the hearing on the Ministry of Corporate Affairs (MCA) petition to supersede the board of FTIL.

The FTIL case came up for hearing before CLB today and the quasi-judicial body decided to next hear the matter on June 30., the third such delay.

Read our Premium NSEL-FTIL Merger Brief and NSEL Scandal Brief – Main File.

Technology

Philippine SE To Use NASDAQ-Developed Trading System In June
Business News Asia

After tests last month, Philippine SE (PSE) announced that starting June 1, it will replace the PSEtrade platform provided by NYSE Euronext Technologies with the new trading engine developed by NASDAQ, the PSEtrade XTS.

NYSE Revises ‘Integrated’ Feed Test Dates (subscription)
Waters Technology

NYSE has revised the production testing dates for its soon-to-launch NYSE and NYSE MKT (formerly Amex) Integrated Feeds to provide customers with more time to perform certification testing on sample market data before the feeds go live, and to test connectivity and configurations. This testing will now take place on May 30 and June 6 – instead of May 2, May 9 and May 16, as previously announced.

Bitcoin May Never Make It to Wall Street, But Its Tech Will
Wired

PLY: Focuses on James Angel’s comments which mirror my own: Bitcoin remains the Model T Ford of digital currency, it incentivised the infrastructure buildout but eventually everybody will prefer an Audi / BMW / Porsche or whatever to the “Tin Lizzie” despite the DNA being broadly similar.

Products

Mooted Clearing Of Options On Credit Indices Raises Concern (subscription)
Joe Rennison – Financial Times

ICE is looking to be the first clearer to bring options on CDS indices into its remit expanding its role in safeguarding derivative products.

CFTC Releases Final Interpretation On Forward Contracts With Embedded Volumetric Optionality
CFTC

Concurring Statement Of CFTC Commissioner Bowen On The Final Interpretation Concerning Embedded Volumetric Optionality
MondoVisione
Statement Of Support Of CFTC Chairman Timothy Massad On The Final Interpretation Concerning Embedded Volumetric Optionality
MondoVisione

EEX: Trading In Agricultural Products Successfully Launched
MondoVisione

European Energy Exchange (EEX) has successfully completed the migration of the Agricultural Futures previously listed at Eurex Exchange to its platform.

PLY: Another postscript to the history of the Hannover WTB which was swallowed up by EUREX when it ran out of road some years back.

Nomura Is Latest Bank To Stop Clearing Swaps As New Rules Bite
Matthew Leising – Bloomberg

Nomura will no longer act as a middleman to allow clients to guarantee their swap trades with a clearinghouse, the latest bank to exit the business as new rules increase risks and costs in the $630 trillion market.

MOEX: Risk Parameters Change For The Derivatives Market
MondoVisione

Indexes

BM&FBOVESPA & S&P Dow Jones Indices Sign Index Agreement
PRNewswire

BM&FBOVESPA and S&P Dow Jones Indices signed a strategic agreement to create and launch new, co-branded equity Brazilian indices.

Career Paths

Daniel Gallagher, a Republican member of SEC, is preparing to step down after nearly four years at the agency.

PLY: I am sorry, but not surprised, to see Dan standing down after an excellent spell as Commissioner where he has often appeared as the sole voice of reason for markets at an agency which has caught the Obamian zeitgeist for turning the USA into an over-regulated economic fiasco like Europe. This is a big loss to the SEC given the failure of the Commission to deliver coherently on the JOBS act and other progressive moves. That he is leaving prematurely before the end of his term is interesting, to say the least, as he has often voiced frustrations with the blob itself…

TMX – nominees listed in the management proxy circular for the 2015 Annual and Special Meeting of Shareholders were elected as directors of TMX

Luc Bertrand
Denyse Chicoyne
Louis Eccleston
Christian Exshaw
Marie Giguère
Jeffrey Heath
Martine Irman
Harry Jaako
Lise Lachapelle
William Linton
Jean Martel
Peter Pontikes
Gerri Sinclair
Kevin Sullivan
Anthony Walsh
Eric Wetlaufer
Charles Winograd
Michael Wissell

One name looms above all others on this board, truly primus inter pares with a hefty dose of leverage on top: Luc Bertrand, the man whose visionary stance propelled Montreal forward and has been a vital player in the development of the Canadian marketplace at a federal and global level.

HKEx approved appointments to the Cash Market Consultative Panel, Clearing Consultative Panel and Derivatives Market Consultative Panel since the service terms of certain members are due to expire.

Cash Market Consultative Panel

LEE Kwan Ho, Vincent Marshall (Chairman)
Rafael GIL-TIENDA (Deputy Chairman)
CHOY Sze Chung, Jojo
LEE Jor Hung, Dannis – Re-appointed (up to 31 May 2018)
LEUNG Kwok Ming
Christina MCFARLAND – Re-appointed (up to 31 May 2018)
David RABINOWITZ – Re-appointed (up to 31 May 2018)
Hani Youssef SHALABI – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)
WONG Che Keung – Re-appointed (up to 31 May 2018)
WONG Ying Kwan, Stephen – Re-appointed (up to 31 May 2018)

Clearing Consultative Panel

WONG Sai Hung, Oscar (Chairman)
CHAN Tze Ching, Ignatius (Deputy Chairman)
CHAN Shun Wai, Stevenson – Re-appointed (up to 31 May 2016)
Oliver GOH – Re-appointed (up to 31 May 2018)
Shaik Ismail HAKIM
LAM Hui Yip, Clement – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)
MIAO Chih Chen, Jack
Janelle MILLER – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)
WONG Wai Man, Raymond – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)
John ZEE – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)

Derivatives Market Consultative Panel

KWOK Chi Piu, Bill (Chairman)
FUNG Yuen Mei, Anita (Deputy Chairman)
Philip KO – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)
LAM Lee G
LIM Wah Sai – Newly appointed (for a 3-year term from 1 June 2015 to 31 May 2018)
Stephane RITZ – Re-appointed (up to 31 May 2018)
Craig Anthony ROBERTSON – Re-appointed (up to 31 May 2018)
WAN Kai Leung, Paul – Re-appointed (up to 31 May 2018)
Daniel WEINBERG
YAP Pek Yen, Patricia – Re-appointed (up to 31 May 2018)

Societe Generale named Timothee Bousser as head of equities and derivatives in the Asia-Pacific region, as the French bank overhauls its global market activities.

Interview With Reto Francioni (German version only)
NZZ

“Brussels has stopped DB1 and Europe”.

PLY: Apologies for repeating but as British Parliamentarian Enoch Powell note: “All political careers end in failure.” In this case Reto Francioni’s career as a political exchange boss is ending in failure too – DB1 has lost direction, its share price languishes and there is an urgent need to re-energise the talent pool within which is currently somewhat adrift. Oh and get over the NYSE deal, the rest of the world has moved on, you need to as well, DB1. A better dialogue with shareholders would be no bad idea either as the group has much to be proud of but is lacking with its current messaging.

This Woman Helped Build India’s Stock Exchange. Now She Runs It
Bhuma Shrivastava & Santanu Chakraborty – Bloomberg

It’s rare that a woman runs a stock exchange — there are just three in the world. Even rarer to find one who was chosen 23 years ago for the crack team that created it and then climbed the ranks to become its chief executive officer in traditionally patriarchal India.

Chitra Ramkrishna, 52 and head of the National Stock Exchange of India (NSE), wants to retain the startup culture of her early days that helped grow the NSE into the world’s third-largest bourse by number of trades and the leader in India with an 82% market share that dwarfs the 140-year-old BSE. When NSE needs something new, it creates a team: Currency trading, bond futures and ETFs are the fruits so far. Another team is now working on bond innovations to go beyond the current 10-year product.

PLY: Good to see two sound endorsements of the NSE CEO Chitra Ramkrishna this week.

Financial Calendar

This week

13.05

SEC Equity Market Structure Advisory Committee – focus on Rule 611 of SEC Regulation NMS, known as the “Order Protection Rule” or “Trade-through Rule.”

14.05 – BM&FBovespa Q1 2015 Financial Results

15.05

ICE AGM
NZX AGM
Record date BGC Partners $0.14 quarterly dividend
Record date ITG $0.07 quarterly dividend

New announcement

BGC Partners 2015 AGM – Tuesday, June 2, 2015
SFOA is once again hosting its international forum for commodities, derivatives and emerging markets in Geneva on September 22 – 24, 2015. Exchange Invest Founder Patrick L Young will be chairing the Crossfire pane which also returns as a blue riband panel.

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

Analyst Notes

HSBC Reiterated Their “Reduce” Rating On ICAP – GBX 480 Price Objective

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

All Analysts, Banks and Brokers are welcome to contribute to this section.

Other stories

ESMA Chair Steven Maijoor Delivers Keynote Address On Capital Markets Union At Luxembourg Stock Exchange Day
MondoVisione

Read our Premium EU CMU Brief

BIS, ECB & IMF Publish Handbook On Securities Statistics
MondoVisione

The Bank for International Settlements (BIS), ECB and IMF jointly released the Handbook on Securities Statistics.

Remarks Of CFTC Chairman Timothy Massad Before Energy Risk Summit USA 2015
MondoVisione

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