May 16 2013

elb2An interesting results discussion with LSE: Essentially they will concentrate on recent acquisitions but at the same time they clearly have an appetite for smaller shareholdings in markets as well as eyeing settlement…(maybe M. Rolet can finally slay the ghosts of the Taurus debacle).

Elsewhere, Polish CCP / settlement house KDPW has signed an MOU with its counterpart in Russia. A good move. Remember KDPW is scheduled for privatisation during the lifetime of the current government. Food for thought as waves of misguided comment hype the flawed concept of a Vienna-Warsaw bourse merger.

The Serbian power bourse is a good move – another excellent example of how smaller exchanges can nimbly exploit huge opportunities.

News that EUREX is looking at relaunching EURIBOR is hardly a huge surprise but it is significantly material information!

Some fascinating stories today, so I’ll leave you to it – happy reading:

Public Markets

London eyes €800tn settlement market (subscription required)

Financial Times

The London Stock Exchange Group has set its sights on the €800tn eurozone securities settlement market as it looks to extend its corporate transformation by pushing further into risk management.

Xavier Rolet, group chief executive, said on Wednesday he would look to exploit a planned European project intended to foster competition among Europe’s incumbent central securities depositories. The European Central Bank-led project, called Target2Securities, aims to cut high cross-border settlement costs.

LSE Group Hails Turning Point in Global Rebound (subscription required)

Wall Street Journal

The London Stock Exchange Group said Wednesday that it is on the lookout for new business partnerships with other exchanges, as it looks to capitalize on what its chief executive hailed as a turning point in the global economic recovery.

Under Chief Executive Xavier Rolet’s leadership, the LSE has aggressively diversified its operations and expanded it information-services division—which provides trading terminals and access to data—so much that it now contributes more revenue than the group’s traditional capital-markets operations.
Diversifying has so far allowed the LSE to thrive, with the company reporting better-than-expected annual results Wednesday, even though the European debt crisis has stalled initial public offerings in recent years.

KDPW And NSD Sign Memorandum Of Understanding

The Central Securities Depository of Poland (KDPW) has signed a Memorandum of Understanding with the National Settlement Depository of Russia (NSD). It is the first step towards a future operational link.

The Memorandum of Understanding sets out the terms of co-operation between the CSDs in their operations including exchange of information, cooperation in securities depository and settlement related matters to help foster the prosperity of their financial markets and promote cross border investment. Planned initiatives are also aimed at opening an operational link between KDPW and NSD which in the future could enable dual-listing of companies on the Warsaw Stock Exchange and the Moscow Exchange.

London Metal Exchange to give date soon for clearing platform launch

Reuters

The London Metal Exchange expects to announce a 2014 launch date for its self-clearing platform, LMEClear, within the next few weeks, LMEClear’s chief operating officer said.

Trades on the LME, the world’s largest metals marketplace, are currently cleared by clearing house LCH.Clearnet. A clearing house acts as an an intermediary between parties to a trade, in order to reduce the risk of one (or more) parties defaulting.

LCH.Clearnet Triples Fee for LME Before End of Clearing Deal

Bloomberg

LCH.Clearnet Group Ltd., which clears trades made on the London Metal Exchange, plans to triple a fee levied on contracts before the LME takes over clearing itself next year.

The so-called registration fee will rise to 15 pence (23 U.S. cents) a contract from 5 pence as of June 1 for so-called clearing members of the LME, London-based LCH.Clearnet said today in a statement. That includes companies from Jefferies Group LLC to Deutsche Bank AG, the LME’s website showed.

NYSE Euronext Announces Date For Second Quarter 2013 Earnings Release And Conference Call

NYSE Euronext (NYX) will announce earnings for the second quarter 2013 before the market opens on Tuesday, July 30, 2013. A news release will be issued at approximately 2:30 a.m. (New York) / 8:30 a.m. (Paris) and a conference call with remarks by NYSE Euronext senior management will begin at 8:00 a.m. (New York) / 2:00 p.m. (Paris). A presentation will be referenced during the call and available on our website at http://www.nyseeuronext.com/ir.

Progress of Discussions on Merger between Japan Securities Clearing Corporation and Japan Government Bond Clearing Corporation

Japan Exchange Group, Inc

On March 7, 2013, Japan Securities Clearing Corporation (JSCC) and Japan Government Bond Clearing Corporation (JGBCC) announced the start of discussions on a merger. Below is information regarding the progress of the discussions between JSCC and JGBCC regarding the merger.

Furthermore, the contents of this release express the status of discussions at the present time. Details may change due to further discussions between JSCC and JGBCC and consultation with related parties, etc

Private Markets

Serbia plans a power bourse in 2014

Reuters

Serbia plans to set up a spot power exchange in the first quarter of 2014 with the aim of later joining it with other regional day-ahead markets, an official of its grid operator EMS said on Wednesday.
Milos Mladenovic, EMS’s director for international and regulatory issues, said the SEEPEX exchange project would boost competition, increase liquidity and security of supply in the region, as well as develop reliable price indices.

Technology

Trading Technologies to Connect to NASDAQ OMX’s New NLX Exchange

The Wall Street Journal (press release)

Trading Technologies International, Inc. (TT) announced today that TT will connect its X_TRADER(R) platform and related products to NASDAQ OMX NLX (NLX), a new London-based derivatives trading market.
NLX will initially list European short-term interest rate (STIR) and long-term interest rate (LTIR) euro- and sterling-based futures products. All instruments will clear through LCH.Clearnet, providing optimal initial margin efficiencies for market participants who will have the unique ability to portfolio margin both STIRs and LTIRs in a single clearing house.

CQG becomes approved independent software vendor on DGCX

Al-Bawaba

The Dubai Gold & Commodities Exchange (DGCX) today announced that CQG, Inc. a leading global provider of financial market data and trading software, has become an approved independent software vendor (ISV) on the Exchange. CQG has connected its hosted infrastructure to DGCX to deliver low-latency trade execution and market data service to the Exchange’s members.

Appointments

NYSE Technologies names Varghese Thomas as SVP & global head of infrastructure solutions

Automated Trader

NYSE Technologies, the commercial technology division of NYSE Euronext, has appointed Varghese Thomas as Senior Vice President and Global Head of Infrastructure Solutions. In this role, Mr. Thomas will be responsible for the development and management of a financial hosting, network and managed services business.
Based in New York, Mr. Thomas will work in close collaboration with NYSE Technologies’ Content and Liquidity Solutions teams reporting to COO, Terry Roche.

Products

Eurex to relaunch Euribor

FOW magazine

Eurex is to relaunch its Euribor contract imminently in a bid to wrest liquidity from Liffe and rise to the challenge of NLX, writes William Mitting.
The launch is a challenge not only to Liffe, where the Euribor has traded since its launch, but also to the new Nasdaq platform NLX. NLX will launch in Q2 with a series of look-a-like contracts replicating those on the short end of the curve, including Euribor, currently traded Liffe and longer term bund, bobl and schatz contracts on Eurex.

 

ICE to list four new environmental market contracts

Platts

IntercontinentalExchange on Monday will begin listing four environmental market futures contracts, the company said Wednesday.

The new contracts involve the physical delivery of instruments used to comply with the Clean Air Interstate Rule and state-mandated renewable portfolio standards.

ICE will list futures contracts for CAIR Annual NOx, CAIR Ozone NOx, New Jersey solar renewable energy certificates and Texas renewable energy certificates.

NYSE Looks to Cull List of Penny Names 

Traders Magazine

In a move intended to reduce quote traffic and the exchange operator’s administrative burden, NYSE Euronext is proposing to cut significantly the number of options subject to penny trading and to end the so-called “Penny Pilot” program.
In a letter to the Securities and Exchange Commission, the operator of two options exchanges—NYSE Arca Options and NYSE Amex Options—is recommending the SEC reduce the number of options traded in 1-cent increments from 362 to 150.

Indexes

JPX Group And Nikkei Agree On Joint Development Of New Index

Japan Exchange Group, Inc. ,Tokyo Stock Exchange, Inc. (JPX Group) and Nikkei Inc. (Nikkei) have agreed to jointly develop a new stock price index for the purpose of contributing to the further development and vitality of the Japanese securities market on the occasion of the merger of the Tokyo and Osaka equity markets. For details, please refer to the attachment.

Warsaw Stock Exchange Consults The Market On Replacement Of WIG20 With WIG5 And WIG30

The WSE has initiated consultations on modification of the index of major companies.
The Exchange has proposed to replace WIG20 with WIG5 and WIG30.
WIG30 is proposed as an index tracking the performance of major companies while WIG5 is to be the underlying of new derivatives.

Crowdfunding

Crowdfunding maybe more bust than windfall

Yahoo! New Zealand News

The JOBS Act allows companies to raise up to $US1 million a year. It aims to protect individual investors by limiting the amount they can put into a company. People with annual income or net worth of $US100,000 or more can invest no more than 10 per cent of their income or net worth, up to a maximum of $US100,000. People whose net worth or annual income is below $US100,000 are subject to lower limits on potential crowdfunding investments.

Other stories

Regulators set September deadline for derivatives deal

Reuters

Financial regulators have given themselves until September to try to resolve differences over how to supervise derivativesmarkets in the wake of the financial crisis, a U.S. watchdog said on Wednesday.
Leaders of the Group of 20 economies (G20) pledged in 2009 to make off-exchange traded derivatives like credit default swaps more transparent. They wanted rules in place by the end of 2012, but this has proved difficult to achieve.

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