MAY 17 2017

Good Morning and welcome to Issue 996 of the Exchange Invest daily bulletin which coincides with the Porsche type number for the 5th generation 911 where water cooling came in and most everything was changed, apart from the basic layout/silhouette of the legendary rear engined sports car. Type 996 was produced between 1998 and 2004. A stunning motor car in every respect and imho highly collectable.

Incidentally, tomorrow’s issue 997 will be sent from the 10th anniversary Finance Malta Conference where I have a keynote slot in the afternoon before the Finance Minister Professor Scicluna closes the proceedings. Looks like a great conference and I get to roam over multiple topics including Brxit and FinTech while motivating the audience – well that’s one word for it…

Prosperity UK Video

As the debate continues to heat up, don’t forget to watch (or review!) the Prosperity UK Panel – Brexit, Euro Clearing & Financial Market Structure: panel ably chaired by Barney Reynolds headlining parish luminaries Jeff Sprecher and Michael Spencer, with one Patrick L Young lurking in the background.

In Today’s Exchange Invest

NYSE American gets regulatory approval, as does the HKEX-Shanghai Bond Connect – hooray! New City of London policy chief has much less EU baggage and takes the argument forward to deter any EU twitches to bifurcate Eurozone CCP clearing. BGC prepares to launch its new electronic bond platform while Handelsblatt has a leak of the latest DB1 strategy. Meanwhile one of Canada’s two market visionaries is buying stock in TMX – very very interesting (times ten to the power of profound on my scale of interesting)…

And there’s more, happy scrolling:

In BigWorld

The European Court of Justice yesterday ruled on a case concerning the Singapore EU Free Trade Agreement. overall it is encouraging news for the UK in its Brexit negotiations as it ought to be feasible to avoid the camel-needle threading exercise which is regional approval by all the regional troughs for central government largesse, also known as local parliaments. Essentially therefore the UK may be able to do a deal with the EU for Brexit which for instance avoids being referred to that bastion of magic money tree economics in Belgium, the Wallonian diet…a body which broadly aspires to turn Europe into a kind of Soviet vision of chaos (sorry yes that is tautology) – not dissimilar to the UK Labour Party manifesto launched yesterday which seeks to make London the new Caracas.

Public Markets

No Case For Shifting Euro Clearing After Brexit – City Of London
EU Grab On Euro Clearing Would Be “Vastly Damaging” For Europe & Global Financial System, Says City of London Corporation

PLY: Good to see Catherine McGuinness,hitting the ground running as Chairman of the corporation’s policy committee after Mark Boleat seemed to be struggling with self-imposed Stockholm situation due to his misplaced Europhilia running contrary to the national will in Britain.

BGC Readies U.S. Treasuries E- Trading Platform For June Launch

PLY: This harbours the potential to be moderately seismic. Having sold e-Speed to NASDAQ for a decent sum, BGC under the FENICS umbrella is preparing to launch a new platform. This new platform enters a different and more crowded market to the one it left when e-Speed was sold (for $1.2 billion) 4 years ago but it is difficult to bet against BGC taking considerable market share. Brokertec will clearly be the name to beat with its circa 80% of electronic Treasury trading. The question is will BGC be volume additive to the overall market or will it be purely eating other players lunches?

NYSE Wins Regulatory Approval For ‘Speed Bump’ Exchange

PLY: In the same way that chicanes came to reprofile the Grand Prix circuits of the 1970’s because F1 officialdom had no means to coherently control car speeds, so now the SEC’s Reg NMS is being reprofiled with speed bumps…

Hong Kong, China Regulators Approve “Bond Connect” Scheme

PLY: Marvellous news all round and a further vindication of the HKEX’s longstanding ‘gateway to China’ strategy. “Bond Connect” involves China Foreign Exchange Trade System (CFETS) & National Interbank Funding Centre, China Central Depository & Clearing and Shanghai Clearing House as the main Chinese infrastructure providers for the scheme working alongside Hong Kong Exchanges and Clearing (HKEX) and Central Moneymarkets Unit, to establish mutual bond market access between Hong Kong and mainland China.

London Metal Exchange Wants To Put A New Shine On Gold Trading
Financial News (subscription)

PLY: Interview with LME Clear CEO Adrian Farnham on the day LME published a Deloitte report advocating the benefits to CCP ahead of the launch of LME Precious.

Deutsche Börse CEO Lays Out New Strategy
Handelsblatt Global Edition (subscription)

PLY: I’ll let Handelsblatt explain its own scoop:

“Deutsche Börse’s embattled chief executive, Carsten Kengeter, has drafted a new growth strategy to help the exchange regain lost momentum…Under fire for the failed LSE deal, Carsten Kengeter hopes a new growth strategy will give the exchange operator a boost – and save his job.

Mr. Kengeter’s strategy has three main pillars: He wants to expand trading to new investment classes, leverage big data to boost profits and transform the exchange into a digital capital market. Deutsche Börse would not comment on the information.”

Report From Cinnober’s Annual General Meeting 2017

PLY: CEO Veronica Augustsson’s Prezi presentation can be viewed here. Exciting times for Cinnober.

London Stock Exchange Group Plc Transaction In Own Shares

FXCM Keeps Talking Of Plans To Sell Interests In Fastmatch, V3 And Lucid, But No Sale Yet
FinanceFeeds (blog)

Brief- First Derivatives Says Fy Revenue Rose 30 Pct To 151.7 Mln Stg

Private Markets

2nd Meeting Of The Ordinary General Assembly Of Borsa Istanbul A.S. Will Take Place On June 8, 2017

PLY: Delayed meeting rescheduled. No updates on who is or has been in jail of late from amongst the multitude interned last week in the latest anti-Gulenist purge.

The New “IPO Guide Schweiz” Describes Briefly And Concisely The Procedure And Advantages Involved With An IPO On SIX Swiss Exchange

Romania To Move All Gas Trade To State-Owned Exchange

PLY: A blow to BRM which has for years spearheaded the commodity exchange marketplace in Romania as the government forces trade to the OPCOM platform it owns which is not noted for being, well, not noted for being any more customer friendly than any other arm of the Romanian government one could presuppose based on listening to user experiences. How long before Ludwik Sobolewski does his usual trick of pushing the government to let him take control of this platform so he can have a national vertical as he did in Poland?

Share Allotment Process To Be Shortened To 20 Days
The Kathmandu Post

PLY: Your eyes do not deceive you, the headline refers to shortening IPO allocation to 20 days…

Special Section: FTI, NSEL, India at the Crossroads

No news today.


Chat Service Symphony Raises $63 Million, Valuation: $1 billion

PLY: Round led by BNP Paribas, pushes Symphony into the unicorn bracket.

Nasdaq Announces Launch Of The “Nasdaq Analytics Hub” – New Platform Offers Buy Side Participants Suite Of Back-Tested, Normalized Data And Analytics To Help Augment Investment Strategies

PLY: Some cool widgets and new Fisher Price activity big data tools to make money – interesting product suite which ought to attract users if priced sensibly. A useful addition to the NASDAQ portfolio.

Thomson Reuters Expands IPO Execution Strategy With SIAbookbuilding App In Eikon
Bobsguide (press release)

AllianceBernstein Selects Algomi As Partner To Acquire ALFA Fixed Income Liquidity And Analytics Tool – T. Rowe Price, Bluebay Asset Management, Brown Brothers Harriman And AllianceBernstein, To Be Among Early Adopters Of Algomi ALFA – Initiative Will Deliver Bond Markets With An Aggregated Picture Of Liquidity Signals Across Multiple Electronic Venues, Message Platforms And Direct Dealer Inventories


Options Market Structure: Fragmented Reality
Finextra (blog)

“Traders Are Fleeing the Options Market,” Thomas Peterffy, CEO and chairman of Interactive Brokers Group wrote in the WSJ last week: “Most market makers congregate in the highly traded products. It’s difficult for market makers to maintain hundreds of thousands of bids and offers all the time.”

European Council, Council Of The European Union – CMU: New Prospectus Rules Adopted

PLY: Encouraging albeit too much opportunity for specific nations to make subjective additions will dilute the overall impact. Malta has done great work with its presidency but the EU as a whole simply remains far too rooted in protectionism and control to be able to build a genuinely coherent, dynamic marketplace for capital raising.

FTSE Russell Launches FTSE China A Free Indexes

EEX To Launch Austrian Power Future And extend Phelix-DE Future Products
EX To Launch Phelix-AT Futures And additional Phelix-DE Futures And Options In Light Of Potential Bidding Zone Split

European Council – Council Of The European Union: Money Market Fund Rules Adopted

ACER And CEER Publish White Paper On The Role Of The Electricity Distribution System Operator (DSO)

Deutsche Boerse Mulls Launching Brexit ETF With Partner – Executive
Reuters UK

Career Paths

PLY: An interesting share trade has come to my attention: TMX Director Luc Bertrand acquired 11,741 shares of the company’s stock Thursday, May 11th at an average price of C$72.39 per share, for a total bargain of C$849,930.99.

If Luc Bertrand is buying, that’s the best news to emerge from TMX in a long long time. While its CEO looks singularly out of his depth (my Bay Street moles say it looks uglier up close), TMX has optionality and it also has one of the few truly successful industry visionaries on its board. Moreover said visionary, Luc Bertrand is now buying more stock. Very encouraging news.

Down under, Robert Priestley, a veteran Sydney banker has been appointed to the board of ASX, as an addition to the body.

Over in Stockholm, Cinnober has announced that the Boat Head of Business Development Alastair Goodwin has been appointed CEO for Cinnober’s new subsidiary providing contextual surveillance and insightful analytics for exchanges, regulators, buy & sell-side firms, based on the assets of Ancoa which was bought out of administration last week. Good luck to Alastair and farewell from the parish to Kurt Vandebroek who was formerly CEO of Ancoa.


US Equity Crowdfunding Is 1 Year Old Today, Wefunder Is Top Platform

PLY: So the clear message is: thank you David Weild for being the Father of the crowdfunding movement.

Peer-To-Peer Lending Startup Earnest Said To Look For A Buyer

PLY: Student loan funder looks for a buyer as investment is tricky to obtain in the crowded P2P lending marketplace.

Other Stories

CFTC’s Division of Clearing and Risk Extends No-Action Relief for Shanghai Clearing House

EU Insurers Oppose Merging Banking And Insurance Watchdogs

PLY: Very interesting insofar as EBA will leave London as a result of Brexit and hence a merger with EIOPA in Frankfurt was feasible but the insurance industry appears underwhelmed – understandable as the EU regulators have very modest budgets and the danger of a joint regulator is that money might be internally siphoned to banking oversight – what they term a material policy risk in insurance land methinks…

Response From The European Association Of CCP Clearing Houses (EACH) To The European Commission Public Consultation On The Operations Of The European Supervisory Authorities (ESAs)
PLY: EACH comfortable with overall EMIR balance which sounds sensible to me, particularly as EMIR was one of the very few easily comprehensible and not insanely prescriptive regulations to emerge in the past decade.

Exchanges Hold Steady – FTSE Mondo Visione Exchanges Index Up By 0.8% In April, 7.3% Year-To-Date And 14% Over 12 Months
Catch a few readers over cocktails tonight for the Finance Malta Conference, goodly number of visitors in town I see, have a great day.

All the best,


Patrick L Young
Executive Director DV Advisors

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