May 19 2015

Today – A Touch Busy In Warsaw:

…Your pith today comes from the hotbed of FinTech startup discussions where my Polish startup club Mission ToRun has co-organised the StartUpBootCamp FinTech #FastTrack day in Warsaw. We’re seeing some intriguing ideas…but first here’s the daily pith on market structure:

Warsaw 19 Poster Final In Today’s Exchange Invest:

Plus 500 the butt of a thousand punny headlines as their share price fall is exceeded only by the damage to their reputation. BGC Partners do another deal as China proclaims protection of foreign investors’ rights. Forex/Cryptocurrency Exchange CRYEX confirms Cinnober solution while in Bond-world, NYSE and UBS partnering alongside an ITG Bondcube tie-up and much much more, happy scrolling…

Question of the Day: Can the leap second deliver the Y2K effect with 16 years of latency?

Exchange Invest Premium:

Premium posts:

New! Slovak Telecom – A Market Failure

Three articles centred around the Sarao Saga:
A Valid Case Against Sarao
The Post Floor Moral Breakdown
Barking At the Moon: The Hound of Hounslow & other follies

Meanwhile, our Premium Briefs keeping you abreast of various industry issues are updated daily when news arises. All topics covered can be found on our dedicated Briefs page via Exchange Invest Premium.

The latest include:

China Capital Markets Transformation – CNY & Banking Reform Brief Part 1, Part 2 NEW!
China Capital Markets Transformation – Commodities Trading & Warehousing Brief Part 1, Part 2, Part 3, Part 4
China Capital Markets Transformation – Exchanges & Markets, ETPs & Exchange Infrastructure – Brief Part 1, Part 2, Part 3, Part 4, Part 5 
SEBI-FMC Merger Brief
CEESEG Stakes Sales Brief

Our Premium service is a unique source of industry analysis – insight in a low latency environment if you like. Can you afford not to be a subscriber? $120 per user/year helps keep Exchange Invest daily Free. Subscribe here or reply to this email and I will invoice you forthwith.

Public Markets

Hellenic Exchanges Q1 2015 Financial Results
Hellenic Exchanges

Consolidated net after tax profits EUR 4.1m vs. EUR 4.8m in Q1 2014, down 15%.
Turnover EUR 10.1m vs. EUR 10.3m in Q1 2014, down 2%
Consolidated EBT EUR 5.6m vs. EUR 6.6m in Q1 2014, down 15%

PLY: Hellenic Exchange remain a well run business imprisoned by their national economic circumstances.

ICAP Full-Year Results For The Year Ended 31 March 2015
ICAP

Revenue GBP 1,276 mln, down 7%
Profit before tax (statutory) GBP 95 mln, down 21%
EPS (basic) 13.0p, down 17%

Read our Premium post: ICAP Explores A New Galaxy

PLY: The flat yield curve QE world with added regulatory changes modifying the landscape continue to hamper growth at the world’s largest IDB.

2015 AGM Of Oslo Børs
MondoVisione

Foreign Investors Welcome Regulator’s Stance On China Shareholding Rights
Michelle Price – Reuters

Foreign investors have welcomed assurances by China’s securities watchdog that their shareholding rights are recognised in the country, in a development that should boost trading on a landmark Hong Kong-Shanghai trading link.

Read our Premium HKEx – SSE – Stock Connect Part 1,Part 2,Part 3

PLY: Another shot in the arm for “through train.”

BGC Partners Continues Spree With Deal To Buy Real Estate Firm
MICHAEL J. de la MERCED – NY Times

BGC Partners have acquired Excess Space Retail Services, a specialist in helping companies get rid of their unused space, as it continues to build out its real estate offerings. Financial terms were not disclosed.

The acquisition is the latest by BGC and its Newmark Grubb Knight Frank unit, coming just under two weeks after the firm bought Computerized Facility Integration, which helps real estate owners manage their assets.

PLY: It isn’t GFI but it does have many interesting dynamics. BGC are on a roll.

BGC Press release here.

Read our Premium BGC – CME – GFI Brief.

Plus500 Shares Fall 36% After Client Accounts Suspended (subscription)
Harriet Agnew & Miles Johnson – Financial Times

Plus500 suffered a 36% share price fall on Monday after it announced it had suspended some UK accounts pending money-laundering checks.

PLY: I have offered some monumentally wary counsel over Plus 500 even if I cannot quite finger the single source of weakness. However this is a remarkable situation which I hope to discuss in Premium later, time permitting. The overall situation suggests abject incompetence / failure of oversight. Papering accounts is hardly rocket science. Tedious often but given the claims that Plus 500 is a wondrously tech savvy entity, it is all the more remarkable that they could make such an elementary error.

Previous discussions on Plus500 here.

Latest in FT Alphaville Dan McCrum’s Plus500 series

Plus500 churn update
Plus500 requests your patience – Update 2
Plus500: the big freeze

Read our Premium brief: FX – CHF Crisis – Brief

Sebi Forms Panel To Oversee FMC Merger
Rajesh Bhayani – Business Standard

Sebi has appointed a committee to ensure smooth merger with FMC, to be headed by Murlidhar Rao, executive director in the markets regulations department of Sebi along with other officials from Sebi and FMC.

Read our Premium SEBI-FMC Merger Brief.

MOEX Authorizes Cross Trading Through The CCP On Its Derivatives Market
MondoVisione

Effective 12 May 2015, the amended MOEX trading and admission rules will authorize cross trading on the Derivatives Market.

Private Markets

BATS CHI-X Europe Overhauls ETF Trading Tariffs To Promote Deeper Liquidity At Tighter Prices
BATS

Pricing Effective 1st June and will apply to all ETFs traded on BATS Chi-X Europe; Exchange will also offer free ETF listings.

South Korea To Double Share-Trading Limits To Boost Market
Seonjin Cha – Bloomberg

South Korea will double the daily trading range of shares starting next month as the country seeks to boost the appeal of its $1.3 trillion equities market.

Commencing June 15, stocks on the Kospi and Kosdaq indexes will be able to move 30% compared with the current level of 15%. The Financial Services Commission first announced the plan in September, after the 200-day average trading volume of the benchmark stock gauge fell in July to its lowest level since 2007.

Dividend News

ICAP directors recommend a final dividend of 15.4p per share which will result in a full-year dividend of 22.0p (2013/14 – 22.0p). This reflects the Group’s strong cash generation and the board’s confidence in the medium term prospects for the business. If approved, the final dividend will be paid on 24 July 2015 to the shareholders on the register at the close of business on 3 July 2015. The shares will be quoted ex-dividend from 2 July 2015.

A dividend of NOK 8.20 will be distributed to the holders of shares in Oslo Børs on 18 May 2014. The dividend payment totalled NOK 353 million. The company expects to pay the dividend on Friday 29 May. The company’s shares will be traded ex dividend from and including Tuesday 19 May 2015.

Special Section: FTI, NSEL, India at the Crossroads

PLY: No news with MCX up 1%, FTIL flat.

Technology

CRYEX To Establish Crypto Currency Exchange & Clearinghouse Using Turnkey Solutions From Cinnober
MondoVisione

CRYEX, which recently filed an application with the Swedish Financial Supervisory Authority (Finansinspektionen) intend to create a members-only European marketplace for trading FX, including digital currencies like bitcoin and other crypto currencies, has confirmed that it will partner with Cinober for technology (after a previous announcement of a partnership without naming the world’s leading independent vendor of exchange system.

PLY: A great deal for Cinnober, an interesting new independent market based in Sweden and a fascinating twist for cryptocurrency too.

Markets Are Jumpy Over Coming Leap Second (subscription)
Stephanie Yang – Wall Street Journal

Wall Street’s latest worry: Y2K’s distant cousin, the leap second.

Traders and exchange officials are preparing for the latest incidence when a seemingly innocuous time change could potentially cause havoc if computer systems aren’t made ready.

In this case, it is the leap second, an event that happens every few years when the standard time around the world is adjusted by one second to account for a slight mismatch between clocks and the Earth’s rotation. With lightning-quick trading tied to computers now the norm in markets, the leap second has regulators, exchanges and traders worrying about potential pitfalls like it is 1999.

PLY: The first leap second change to take place when many markets are open or still trading late (North American) since 1997 when life was a lot less also could have ramifications – markets have also adopted different approaches by region to this tricky conundrum…which for those with their NASDAQ nanosecond timestamps, is of course almost half a lifetime…

Products

CME, With JPM Nod, To Launch Zinc Contract, Upping LME Battle
Luc Cohen – Reuters
CME Announces The Launch Of Physically Delivered Zinc Futures
PRNewswire

CME will launch a zinc futures contract next month, stepping up a global battle for metals market share with LME amid expanding Asian markets.

ITG Partners With Fixed Income Fledgling Bondcube (subscription)
Tim Cave – Financial News

ITG, the US agency broker better known for its expertise in cash equities, has partnered with a fledgling bond platform as traditional market boundaries between the two asset classes continue to blur in the hunt for fixed income liquidity.

Bondcube press release here.

FAO / PLY: Bondcube is backed by DB1 and went live last month.

UBS & NYSE Bonds Announce Strategic Relationship
BUSINESS WIRE

UBS and NYSE announced a new strategic relationship whereby UBS customers can connect to NYSE Bonds through the UBS Bond Port (formerly named UBS PIN-FI) to access a centralized pool of corporate bond liquidity.

NYSE Bonds is the only corporate bond exchange in the U.S. and offers customers real-time, electronic access to live and executable prices with direct interaction with the marketplace through limit order functionality. Orders are executed on a strict price/time priority, helping customers establish best execution in an open, transparent trading environment.

HSBC Open To Bond Platform Partnerships (subscription)
Tim Cave – Financial News

HSBC is not ruling out linking its fledgling electronic bond platform with other dealers and market initiatives, a sign that the liquidity crunch in fixed income may eventually force banks to set aside traditional rivalries.

Read our Premium post On Bonds & SEFs and Premium brief The Bond Platforms Rush Part 1, Part 2.

ICAP’s EBS eFix Matching Meets FX Market’s Need For Auditable Electronic Fix Execution
ICAP

ICAP reports on the progress of its eFix Matching solution one year after launch. The result of a collaboration between EBS and Global Broking it enables customers to execute Fix interest electronically on the EBS Market platform. A robust and independent industry solution, it provides anonymous access to a central pool of liquidity for the most liquid daily fixes, including the ECB 13:15 Fix, WMR 16:00 Fix, HSRA AUD/USD Fix and EMTA USD/RUB Fix, and improved global matching opportunities.

South Africa, Kenya, Nigeria Plan More ETF Cross-Listings
Eric Ombok – Bloomberg

South Africa, Nigeria and Kenya are planning to cross-list more ETFs on their stock markets to boost liquidity of the securities, according to JSE.

Read our Premium briefs: Rise of Africa – Part 1Part 2Part 3Part 4Part 5.

EEX Launches New Offer On The CO² Market
FTSE GM

European Energy Exchange (EEX) has fundamentally revised its offer on the secondary market for emission allowances. EEX has also acquired a number of market partners that will quote on the Spot and Derivatives Market from June 1st and support liquidity in these markets, including Axpo Trading AG and Belektron doo, while CEZ as will operate as a liquidity provider.

EEX adjusted its fee structure and introduced a so-called “initiator-aggressor model” in April. Under this model, participants initiating a transaction are completely exempt from trading and clearing fees.

Furthermore, fees are only charged for one leg of the spread in trading of price difference between the Spot Market and the Derivatives Markets (so-called Spot/Future Time Spread).

In addition to this reduced fee, EEX offers a volume-based incentive system. Trading participants with a volume of more than 5m tonnes in a one month period receive a 50% rebate on both trading and clearing fees.

Also in April, EEX introduced various new products for emissions trading, including month and quarter maturities on the Derivatives Market for EU Allowances (EUA) and trading of price differences (spreads) between different maturities (for example, Spot-Future) and products (EUA-CER, EUA-EUAA).

Charles Schwab CEO Touts Early Success Of Its Robo Adviser Service
Mark Calvey – San Francisco Business Times

Charles Schwab CEO Walt Bettinger was eager to share the success of the firm’s robo adviser offering at last week’s annual meeting.

He told shareholders meeting at the company’s San Francisco headquarters that the automated investing service, called Schwab Intelligent Portfolios, has pulled in more than $2 billion in client assets and 28,000 customer accounts since its debut in mid-March.

Previous discussions here and here.

Indexes

LSE Launches New FTSE Russell Brand
LSE

LSE launched ‘FTSE Russell’, the new integrated name created for the combined businesses of FTSE Group and Russell Indexes. FTSE Russell will now operate as one joint global index business, with a combined sales and product team serving its global customer base.

Read our Premium LSE – Frank Russell Deal Brief

WIG20 Futures Contracts Are Certified By CFTC
MondoVisione

Career Paths

Oslo Bors AGM – All shareholder-elected members of the Board of Directors were re-elected as members for a one-year period.

Following the AGM, the shareholder-elected members of the Board of Oslo are as follows:

– Benedicte Schilbred Fasmer (Chairman)
– Harald Espedal (Deputy Chairman)
– Ottar Ertzeid
– Wenche Marie Agerup
– Widar Salbuvik

In addition, the employees have two board members.

SEC’s Peter J. Curley, Associate Director for Clearance and Settlement in the Division of Trading and Markets, is leaving the agency later this month. Mr. Curley has headed the Office of Clearance and Settlement since October 2011.

Financial Calendar

May 19

LME Week Asia 2015 Kick Off
Startupbootcamp FinTech FastTrack Warsaw

May 20

CME AGM
Hellenic Exchanges-Athens Stock AGM

New announcements

JPX AGM – May 25, 2015
IOSCO & IFIE To Hold Global Investor Education Event 18-20 May In Kuala Lumpur
BGC Partners 2015 AGM – Tuesday, June 2, 2015
FESE Convention – Oslo – June 17-18, 2015: Exchange Invest Founder Patrick L Young will chair the opening panel.
SFOA Burgenstock Meeting Geneva September 22 – 24, 2015. Exchange Invest Founder Patrick L Young will be chairing the blue riband Crossfire panel.

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

Other stories

Euroclear Publishes Collateral Management Survey Report – Produced By Aite Group, “Collateral Management In Europe: Searching For Central Intelligence” A Timely Analysis Of The Sector – Report Highlights The Realities Facing Treasurers And Collateral Managers In Firms Active In Europe
MondoVisione

European Parliament: Benchmarks: Restoring Confidence In The Financial Markets
MondoVisione

FESE European Equity Market Report – April 2015 Figures
MondoVisione

The European Equity Market Report is a piece of analysis that allows for an accurate comparison of trading statistics across European trading venues.

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