May 16 2014

elb2LME gets permission to appeal warehouse case. Budapest exchange results flat, SIBEX results remain dismal. Reto Francioni plans to double Asian revenue while DB1 praises more regulation. Xavier Rolet talks to the media, Jignesh remanded in custody to May 19th. BSE and USE agree to merge, Equiduct eyes index expansion. Electronic alternatives mooted for silver fix. Warsaw CEO in jeopardy while Bloomberg reports Millennium IT founder Tony Weeresinghe could be leaving end June.

An exciting day dawns for India as it becomes clear that new Prime Minister Modi has secured a vast electoral mandate – hopefully his deregulatory pro business agenda will extend soon to the exchange industry.

Public Markets

BSE Profit, Revenue Drop Slightly In 2013
Budapest Business Journal

Budapest SE (BSE)’s revenue dropped about 2% to HUF 2.4 billion (EUR 7.8 mln) in 2013, and after-tax profit dropped about the same to HUF 565 million (EUR 1.84 mln).

PLY: An interim year for Budapest as they await the benefits from Xetra which CEO Zsolt Katona is optimistic will drive new business and members.

SIBEX Q1 Financial Results
SIBEX

Net turnover Q1 2014 241.081 Lei (EUR 54k), down 3.4% compared to Q1 2013
Loss Q1 2014 439.734 Lei (EUR 99k), up 22% compared to Q1 2013 loss

PLY: Another utterly dismal performance from SIBEX which remains bereft of vision and continues to squander the vast opportunity management are clearly incapable of exploiting.

Increased Financial Regulation Helps DB1 – CEO
Reuters

“The current re-regulation of markets will ultimately strengthen our position,” CEO Reto Francioni said in the text of a speech to DB1’s annual shareholder meeting on Thursday.

DB1 To Double Asian Income By 2017 (subscription)
Joe Parsons – FOW magazine

DB1 wants to double its Asian revenue to €200m by 2017 as the European exchange looks to expand aggressively in the growing region.

DB1 – AGM 2014
Deutsche Borse

LSE CEO Seeks U.S. Expansion (subscription)
Ben Wright & Tapan Panchal – Wall Street Journal

The CEO of LSE said Thursday that his company needs to expand in the U.S. and that the ownership of indexes was an important revenue driver for the exchange industry. Xavier Rolet’s comments came as the LSE reported a 50% rise in full-year revenue and days after The Wall Street Journal revealed that the U.K. stock exchange operator was bidding for Russell Investments.

LSE Looks To Derivatives As LCH Boosts
Nandini Sukumar – Bloomberg

“Look to announcements from us in the futures area,” Xavier Rolet, said on a call with journalists today. “We are dedicating significant time and resources,” he said, without giving further details.

Rolet Outlines LSE Futures Exchange Plan (subscription)
Luke Jeffs – FOW magazine

The CEO of LSE has outlined his plan to launch a European futures exchange and hinted the new platform will trade FTSE futures, a move that would pit the British exchange in competition with ICE.

Xavier Rolet said on Thursday the LSE’s failure in 2001 to buy Liffe, now owned by ICE, left the British exchange with “a competitive handicap” which the exchange was looking to address.

LME Gets Permission To Appeal Warehouse Ruling
Eric Onstad & Veronica Brown – Reuters

LME has got permission to appeal against a court ruling that halted a reform aimed at cutting backlogs at its global warehouse network.

LME said on Thursday it had not yet decided whether to actually launch an appeal to overturn the March ruling won by Russian aluminium producer Rusal.

Police Custody Of Jignesh Shah, Shreekant Javalgekar Extended Till 19 May
Khushboo Narayan – Livemint

A Mumbai court on Thursday extended police custody of Jignesh Shah, chairman and group CEO of FTIL, and Shreekant Javalgekar, former CEO of MCX, till 19 May in connection with the payment fraud at NSEL.
The economic offences wing (EOW) of Mumbai police arrested Shah and Javalgekar on 7 May. They were later remanded to police custody for interrogation.

ICAP Launches UK SEF
Business Wire

ICAP announced that its UK subsidiary, ICAP Global Derivatives Limited (IGDL), has officially launched having received temporary SEF approval from CFTC. IGDL is the first global SEF and MTF, regulated by both the CFTC and FCA.

NYSE Selling Belfast Technology Division
John Campbell – BBC

ICE says it hopes to sell the bulk of its technology division, which employs about 400 people in Belfast, within months.

EI reported on February 19th that ITG considers a bid for Nyfix and that ICE intends to sell its stake in Fixnetix.

Canadian Regulators Look At Scrapping Controversial Fee Model Linked To HFT
Barbara Shecter – Financial Post

Canadian regulators are looking into the impact of scrapping a controversial pricing model used by stock exchanges that is often linked to HFT.

Russia’s Gazprom Plans SGX Listing
Reuters

Russia’s Gazprom is working on obtaining a listing in Singapore, possibly in July, the company said on Thursday.

The comments confirmed an earlier report by Interfax which said that state-controlled Gazprom, the country’s top natural gas producer, was talking to the exchange and preparing paperwork.

Private Markets

BSE, USE Boards Approve Merger
Ashish Rukhaiyar, Ami Shah & Anirudh Laskar- Livemint

The boards of the Bombay SE (BSE) and the United SE (USE) have approved the merger of both exchanges, a spokesperson for BSE said on Thursday. BSE is the largest shareholder in USE with a 15% stake. Several banks are common shareholders in BSE and USE.

Namibia: NSX Concerned About Second Bourse
allAfrica

Namibia SE (NSX) says it is concerned about an application for a second stock exchange to be established in the country. The second exchange is being set up by a local firm called, Namibia Financial Exchange (NamFin-X), headed by Helmut Angula, the former minister of finance.

Nepal – Listed Companies Deny Affiliating In CDS, Clearing
Republica

Nepal SE (NEPSE) listed companies have denied electronic transaction of stocks by affiliating to the Central Deposit System (CDS) and Clearing Ltd. NEPSE said only 27 out of 237 listed companies have applied and 16 have entered agreement for registration in it.

EPEX SPOT Inaugurates Office In Bern – A Swiss Voice For Market Participants, Stakeholders And Decision-Makers
MondoVisione

The European Power Exchange EPEX SPOT has inaugurated its subsidiary in Bern, Switzerland, on 14 May 2014. Swiss market participants, partners and stakeholders participated in the opening.

U.S. District Judge Approves Settlement Proposed By Mt. Gox Creditors
NEWSBTC

U.S. District Judge Gary Feinerman granted the initial approval at a federal court hearing in Chicago, Illinois on Wednesday, which would effectively settle a March class-action lawsuit against the company, Gonzague Gay-Bouchery (Mt. Gox’s Marketing Chief), and Jed McCaleb (who founded Mt. Gox and sold it to Mark Karpeles in 2011).

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL decline 4% as Jignesh remains in custody while MCX is flat.

Technology

NASDAQ OMX Nordic Derivatives Markets: Issue With GTC/GTD Orders In Combination Order Book
NASDAQ OMX

A technical issue related to Good-til-cancelled (GTC) and Good-til-date (GTD) orders in combination order books has been discovered. This affects, for example, the OMXS30 Futures Roll instrument. GTC/GTD order functionality for combination order books will be disallowed until the issue has been corrected. The correction is currently scheduled for June 9th and any changes to this implementation date will be communicated in a separate exchange notice.

FCM360 Expands Footprint In Asia With Equinix TY3 In Tokyo
PRNewswire

FCM360’s Low Latency Financial Cloud hosting service is now available to brokers and traders at Equinix TY3 in Tokyo – one of the largest foreign exchange hubs in Asia.

Products

Electronic Solution Poised To Replace London Silver “Fix”
Clara Denina & Jan Harvey – Reuters

The collapse of London’s historic silver price benchmark under regulatory pressure could soon result in an electronic alternative, with technology providers already checking ways to offer a transparent price setting mechanism. The 117-year old London silver price benchmark’s operator delivered a surprise to customers on Wednesday, saying it would stop administering the process on Aug. 14.

LME Could Reinstate Silver Contract After LBMA Stops London Silver Fixing (subscription)
Metal Bulletin

LME is considering reinstating its silver contract following news that the London Silver Market Fixing Ltd will no longer run the London Silver Fixing from August 14.

The contract could be relaunched as part of a replacement process for the London Silver Fixing, Metal Bulletin understands. “The LME is already a significant precious market player via both its data services venture with the LBMA and its precious metals clearing service, which will be supported by LME Clear from September,” a spokeswoman for the LME said.

Indexes

Equiduct Eyes Index Play (subscription)
Anish Puaar – Financial News

Equiduct, a pan-European retail-focused trading platform, is eyeing an expansion into indices in a further sign of efforts by exchange operators to diversify beyond trading and into data services.

Career Paths

Shareholders Consider Changing WSE CEO
Adrian Krajewski – Reuters

The controlling shareholders in the Warsaw stock exchange are considering removing the bourse’s chief executive and replacing him with Poland’s Deputy Treasury Minister Pawel Tamborski.

Tamborski, a former head of investment banking in UniCredit’s Polish arm and at Wood & Company, declined to comment on the issue. A spokeswoman for the stock exchange said she had no immediate comment, and the treasury ministry was not immediately available to comment.

PLY: Adam Maciejewski appears to be under pressure as CEO as the government continues to run the business from behind the curtains via its minority shareholding which delivers majority voting rights.

EI reported on March 31st that Andrzej Jakubiak, head of the FSA, and Paweł Tamborski, deputy minister of treasury were among possible candidates to be put before the AGM.

Nandini Sukumar of Bloomberg reports that Tony Weeresinghe, the LSE executive who helped rebuild the market’s core trading technology, plans to resign at the end of June.

He joined the exchange in 2009 after selling his company,Sri Lanka-based MillenniumIT, to LSE for $30 million.

MillenniumIT forms the basis of LSE’s trading system. Now based in Boston, Weeresinghe plans to spend time with his family and “pursue his next entrepreneurial venture,” according to a memo sent to LSE employees today.

Andrew Harmos and Alison Gerry were re-elected as Directors of NZX.

Global Financial Markets Association (GFMA) announced a leadership transition as the terms of the current Chairman and CEO expire. The appointments were approved at GFMA’s Board of Directors meeting in London.

Effective immediately, Samir Assaf, CEO of Global Banking and Markets, HSBC, takes over as Chairman of GFMA from Blythe Masters, Head of Global Commodities at JPMorgan Chase.

Additionally, Kenneth E. Bentsen, Jr., President and CEO of SIFMA, takes over as CEO of GFMA from Simon Lewis, who is CEO at AFME. Both Simon and Blythe have been in their posts for two years. Mr. Bentsen will continue to lead SIFMA.

Samir Assaf will serve as Chairman for a term of two years, and Ken Bentsen will serve as CEO for a term of three years.

SEC announced that Chief Accountant Paul A. Beswick is leaving the agency to return to the private sector. He will remain for a transitional period to help ensure continuity in the agency’s Office of the Chief Accountant (OCA).

California Public Employees’ Retirement System (CalPERS) has named Matthew G. Jacobs as the Pension Fund’s General Counsel.

Namibian SE has announced the election of a new chairman and new members for its BoD.

David Nuyoma was elected as Chairman of the Board of the NSX at the first board meeting on 13 May 2014. The NSX Board welcomed David Nuyoma back and Richard Niddrie as a new member, filling the rotational vacancies left by Lionel Matthews and Emile van Zyl.

Reuters reports that at least 10 members of the nonprofit Bitcoin Foundation have resigned over last week’s election of one-time Disney child star and current Bitcoin entrepreneur and financier Brock Pierce as a new director, officials at the group said.

Financial Calendar

This week

NZX AGM
TD Ameritrade $0.12 quarterly cash dividend payment
Record date BGC Partners $0.12 quarterly dividend
Record date GFI $0.05 quarterly dividend
Record date Fidessa 24.5 pence final dividend

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

Crowdfunding

Marshall Wace Seeks To Launch P2P Fund (subscription)
Financial Times

Marshall Wace is close to launching a £200m peer to peer lending investment trust listed in London.

Other stories

ISDA & FIA Europe Publish European Cleared Derivatives Execution Agreement
MondoVisione

The ISDA/FIA Europe Cleared Derivatives Execution Agreement for principal-to-principal client clearing has been published.

Euronext Announces Second Pan-European Investor Conference At The New York Stock Exchange
MondoVisione

Euronext announced its second pan-European Investor conference in New York aimed at raising the profile of its European listed companies among US investors. The event, which will be attended by over 50 large issuers from across all the Euronext countries and over 200 US investors, will take place over three days from 19th to 21st May 2014.

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