May 15 2013

elb2 The LSE results are out and doubtless occupying the slide rules of a great many analysts while elsewhere the delay in the ClearTrade announcement has now become clear as INTL FC Stone have swallowed the whole marketplace – a fascinating development and we look forward to hearing from all parties in due course as to how they intend to develop this intriguing prospect.

Pre-trade risk management (PRM) is a welcome addition to NASDAQ OMX Nordic derivatives traders and continues I process we have long advocated…ironically one of the first exchanges to have such a process was the dear old SIBEX, where I was once CEO. In the mainstream, the deployment of PRM has been perhaps best advocated by that former head of OMX, Magnus Bocker as CEO of SGX.

The night of the long redundancies continues in the IDB business where pre-Dodd-EMIR-Frank, ICAP is further reducing headcount in what remains a challenging time on the precipice of major change.

Meanwhile, the battle for Brazil is starting in earnest. It will be a fascinating test of the regulatory governmental complex to see how they react to providing full exchange status to ATS and presumably this will only open, if not exactly floodgates, at least encourage a couple of entrants to compete with the BM&F Bovespa leviathan.

Competition, like Opportunity, remains everywhere in this space, here are today’s stories:

Public Markets

INTL FC Stone Inc. to acquire control of Cleartrade Exchange

Cleartrade Exchange

INTL FCStone Inc. (Nasdaq:INTL), a provider of execution and advisory services in commodities, currencies and international securities, today announced that it has agreed with Cleartrade Exchange (CLTX) to acquire immediate voting control and the right to acquire up to 90% of equity interest over a five-year period. Completion of this transaction is subject to final stages of due diligence and fulfillment of certain conditions.

London Stock Exchange Group Announcement Of Preliminary Results For Year Ended 31 March 2013

Further strong progress as the Group delivers on its strategy for growth, increased global scale and reach
Good financial and operational performance from an increasingly diversified business against a backdrop of challenging markets
Revenue up 7 per cent at £726.4 million (2012: £679.8 million); adjusted total income up 5 per cent at £852.9 million (2012: 814.8 million)
Core operating costs held flat, before impact of acquisitions and FX; operating expenses up 12 per cent to £422.7 million, reflecting acquisitions (2012: £378.8 million)
Adjusted operating profit 3 per cent lower at £430.2 million (2012: £441.9 million); operating profit also 3 per cent down at £348.4 million (2012: £358.5 million)
Adjusted profit before tax down 5 per cent at £380.7 million (2012: £400.6 million); profit before tax of £298.9 million (2012: £639.7 million, which included recognition of the increased value in FTSE)
Adjusted basic EPS, including tax credits, up 5 per cent at 105.3 pence (2012: 100.6 pence); basic EPS of 80.4 pence (2012: 193.6 pence, including recognition of the increased value of our interest in FTSE)
Proposed final dividend up 4 per cent to 19.8 pence per share; total dividend for the year increased 4 per cent to 29.5 pence per share. The final dividend will be paid on 19 August 2013 to shareholders on the register on 26 July 2013
Completion of acquisition of majority stake in LCH.Clearnet on 1 May 2013; work is underway to achieve the benefits of this transformational deal

Nasdaq OMX launches new risk management service to Nordic derivatives members

Banking Business Review

Nasdaq OMX has launched a new Pre-Trade Risk Management (PRM) service, known as Genium INET PRM, to its Nordic derivatives customers to facilitate real-time pre-trade protection to reduce flawed orders and transactions.

NASDAQ OMX Successfully Delivers SMARTS to Financial Conduct Authority …Authority (FCA) to Enhance Market Surveillance Capabilities

NASDAQ

The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Financial Conduct Authority (FCA), an independent body that regulates the financial services industry in the United Kingdom, today announced that the FCA has officially gone live with NASDAQ OMX’s SMARTS Integrity market surveillance platform to enhance its monitoring of transaction reports across the UK’s financial markets.

Private Markets

Shares Fall in Betfair Group After Takeover Talks Fail

Motley Fool

Betfair Group (LSE: BET ) saw its share price fall over 6.5% in early trade this morning, with more than 60 pence knocked off its closing price of 895 pence yesterday, after it reported that takeover discussions with CVC Capital Partners, Richard Koch, Antony Ball, and partners had been terminated.
The interested consortium also announced that it had been “unable to agree financial terms with the board… and as a result has no intention of making an offer,” with Betfair’s board considering the final bid to undervalue the company.

Broker ICAP to cut more costs after profit slumps

Reuters

Interdealer broker ICAP (IAP.L) plans to cut costs by an additional 120 million pounds ($184 million) over the next three years to offset a slump in trading activity that sent full-year profits down 20 percent.
The London-based company said on Tuesday that it would cut more from both fixed and variable costs, including salaries and staff numbers.
ICAP has cut 147 jobs in the past year, trimming headcount to 4,976. The number of brokers fell by 152 to 2,195. It declined to say how many jobs would be cut this year.

ATS Brasil to Seek Stock Exchange License

Fox Business

“By the end of the month, the request will have been filed at [securities and exchange regulator] CVM,” said Alan Gandelman, chief executive of Americas Trading System Brasil, in an interview in his office in Rio de Janeiro. ATS is a joint venture of NYSE Euronext (NYX) and Americas Trading Group. The banks and money managers are receiving the contracts now, he said.
ATS wants to sign up the partners to ensure there will be sufficient trading volumes once the exchange is launched. In return, the partners collectively will take an equity stake of as much as 24% in ATS, Mr. Gandelman said. Currently, Americas Trading Group, or ATG, owns 80% of ATS and NYSE Technologies, the technology arm of NYSE Euronext, has a 20% stake.

Products

NYSE Arca Plays Wait-and-See with Jumbos

Traders Magazine

NYSE Arca Options will not immediately list so-called “jumbo” options contracts on the SPDR S&P 500 exchange-traded fund.
According to a memo sent to customers Monday, the unit of NYSE Euronext is concerned about the impact on the marketplace of the decision by the BOX Options Exchange to offer the 1,000-share “jumbo” product. BOX began trading the new option Friday.
Still, Arca is monitoring the amount of trading done in the new institution-sized contracts and may at some point decide to offer trading in the product.

Crowdfunding

Crowdfunding Goes Mainstream: Why Donald Trump and Google Are Supporting Grassroots Financing

Entrepreneur

A mélange of high-profile brands and personalities are trying to ride the coattails of the recent explosion in the popularity of crowdfunding.
A few short years ago, crowdfunding, or raising large sums of money by soliciting many small donations, was an off-the-beaten-path grassroots movement largely relegated to artists. Not anymore. Crowdfunding has captured the attention of cable TV producers at CNBC and A&E, real-estate mogul Donald Trump and tech behemoth Google.

Is Equity Crowdfunding Coming To Mexico?

Forbes

Roughly a year ago, my company, Crowdfunder.com, was invited by top leadership in Mexico to come discuss the opportunities for crowdfunding in Mexico. Many in Mexico had seen Crowdfunder’s success in the U.S. and our role in U.S. JOBS Act legislation, and because of this I was invited by business leaders in Mexico to look at creating something similar to the JOBS Act for the small-business ecosystem there.

Other stories

CFTC Said to Review Wall Street Banks for Off-Exchange Trades

Businessweek

The top U.S. derivatives regulator is seeking documents from Wall Street banks about trades that combine features of swaps and futures since the Dodd-Frank Act became law, according to two people briefed on the matter.

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