May 24 2013

elb2

 

Well first up it’s a bumper day of news with investor consequences. Read the “Product” section alone and it’s fairly cataclysmic stuff…

Clearly “the Reign of Terror” phase of the Capital Market Revolution (CMR!) where every exchange is essentially competing with every other one is in absolutely full swing.

Today’s news is rather long but worth reading!

Here are the stories and have a good weekend:

Public Markets

NYSE says to spin off, not sell Euronext

The Economic Times

NYX will spin off its European stock exchange group via an IPO following its merger with (ICE), according to Euronext deputy chief executive Dominique Cerutti.

PLY: I have no doubt Mr Cerutti is clear in his mind about an IPO as an NYX employee but presumably ICE will make the final decision? I’m still inclined to believe Euronext will go via whichever route raises the most cash back to the parent. With various potential bidders assessing the situation this story will run and run… Naturally it makes sense to say “IPO only” …unless and until somebody offers a massive wodge of cash!

CBOE Holdings, Inc. Announces 2013 Annual Meeting Results

Sacramento Bee

Ed Tilly has, as expected become CEO of CBOE Holdings.
At the meeting, shareholders elected:
William J. Brodsky (served since 1997), James R. Boris (served 1992-1993, 1997 and 2003 to date), Frank E. English, Jr. (2012), Edward J. Fitzpatrick (newly elected board member), Janet P. Froetscher (2005), Jill R. Goodman (2012), Duane R. Kullberg (1990), R. Eden Martin (2000), Roderick A. Palmore (2000), Susan M. Phillips (2000), Samuel K. Skinner (2004), Carole E. Stone (2006), Eugene S. Sunshine (2003)

PLY: Congratulations to Ed Tilly, best wishes to outgoing CEO Bill Brodsky who remains Chairman. Board size is 14 members: still too large for a normal business but almost petite by legacy bourse standards! A healthy 2004 is the rough average date of (continuous term) appointment of those re-elected.

New CBOE CEO Aims to Take Volatility Franchise Global (subscription)

Wall Street Journal

PLY: Ed makes plans to take CBOE’s highly prized volatility franchise global and is open to deal making to bolster the company’s leading position in stock-options trading.

Nyse Euronext marketplace for SMEs goes live

Finextra

This new subsidiary is dedicated to companies that have a capitalisation of under €1 billion and already covers over 750 SMEs listed on the regulated market of NYSE Euronext and on NYSE Alternext. With a bold strategy and a NYSE Euronext proven capacity to deliver, EnterNext® has been designed to facilitate the financing requirements and development of European SMEs that operate regionally, nationally and internationally.

PLY: “With a bold strategy and a NYSE Euronext proven capacity to deliver” – well not setting the bar too high there then, for the, ahem, extensive 15 member board to deliver a sleek and effective, dynamic regime.

As to this ongoing fallacy that a market cap up to 1 billion Euros makes for an SME just goes to show how badly positioned the exchange industry department stores are to deal with actually helping, well, SMEs. Then again 15 directors…there could be more directors of NYX group companies than the Italian hill village I used to live in.

NASDAQ OMX Stockholders Elect Members To BOD

Shareholders elected all nominated directors at the Annual Meeting of Stockholders for The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ).

Börje E. Ekholm (2011) re-elected to serve as Chairman.

Board members Steven D. Black (first elected 2011), Robert Greifeld (2003), Glenn H. Hutchins (2005), Essa Kazim (2008), John D. Markese (1996), Ellyn A. McColgan (2012), Thomas F. O’Neill (2003), James S. Riepe (2003), Michael R. Splinter (2008), and Lars R. Wedenborn (2008) were elected to their positions. All will serve one-year terms.

PLY: Congratulations and a cheer for our “Boardwatch!” Average date of first director appointments on this tranche is 2006 (only one director has been around longer than the CME average of reappointments from their 2013 AGM) Total NDAQ board size is a pert 11 – impressive given the group geographic sweep from the USA to Armenia!

US options clearer moves to end trade type dominated by Nasdaq

Chicago Tribune

The clearinghouse for all stock options said Thursday it will adopt a policy aimed at abolishing a dividend-linked trading strategy that critics say could destabilize markets if left unchecked. NASDAQ’s biggest options venue, where nearly all of U.S. dividend-linked options trading takes place may suffer most.

CME Group Inc. Declares Quarterly Dividend

The Herald | HeraldOnline.com

CME Group, the world’s leading and most diverse derivatives marketplace, today declared a second-quarter dividend of $0.45 per share, payable June 25, 2013, to shareholders of record as of June 10, 2013.

PLY: $0.45 per share or 1.5 cents per board member…

NASDAQ OMX (NDAQ), Thomson Reuters (TRI) Enter Asset Purchase Agreement (subscription)

StreetInsider.com

PLY: The deal announced in December expanding NASDAQ’s IR business which remains a sensible move as the ‘department store’ bourses head towards offering more value additive services. Under the terms of the Asset Purchase Agreement, the purchase price will consist of $390 million in cash to be paid at closing, subject to certain adjustments.

ASIC critical of ASX again for breakdown

The Australian

THE Australian Securities & Investments Commission has once again given the major sharemarket operator ASX Ltd a clean bill of health, in line with both of their obligations, but for the second time in two years ASX found itself dealing with a technical breakdown that incurred some criticism.

PLY: Once upon a time ASX was the poster child of revolution: first club demutualisation, first open outcry to go electronic (October 19, 1987) etc. …and then the ravages of a decade or more of cost cutting management has resulted in what is sadly a monopoly defending its turf and hoping to keep Australian markets closed.

Products

London Stock Exchange to Offer Trading in Single-Stock Options

Businessweek

London Stock Exchange Group Plc (LSE) will introduce trading in single-stock options June 10, offering 19 contracts on UK Listed energy and mining companies listed from BP to Rio Tinto Group.

PLY: So way back when in 1989 LIFFE bought LTOM the LSE options market and brought it to the CannonBridge floor. Now LSE will leverage LCH.Clearnet (erstwhile UK options clearer for LIFFE) and LSE are going head to head with not just LIFFE but EUREX too. This is a battlefront to watch.

Eurex To Roll-Out Its EURIBOR Futures Initiative

The international derivatives marketplace Eurex Exchange announced today that it will start a new initiative to increase the attractiveness of its short-term interest rate derivatives segment by offering new trading and market making incentives for its Three-Month Euribor Futures. These measures will become effective on 1 June 2013. Euribor Futures have already been listed on Eurex Exchange for several years.

PLY: The dormant EUREX EURIBOR is back with a vengeance now IT upgrades have improved spread functionality. For those who lived through the battle of the Bund, this promises to be a fascinating fight for market share taking place against the Dodd-EMIR-Frank earthquake in OTC markets…

Private Markets

Angola to open bourse in 2016

gulfnews.com

Angola plans to open its much-delayed stock market in 2016 and could even bring it forward to 2015 if the bourse was used to privatise state-owned companies, the country’s Capital Markets Commission (CMC) said on Thursday.

Ace Commodity Exchange signs MoU with livestock association

Economic Times

Ace Derivatives and Commodity Exchange Ltd today said it has signed a memorandum of understanding with Compound Feed Manufacturers Associationon sharing of information.

By virtue of the MoU, feed manufacturers, who are members of Compound Feed Manufacturers Association (CLFMA), an association of the country’s livestock sector, will receive price information for soymeal, which is an important input and output component for the association and accounts for 30-40 per cent of the total cost of its feed, an exchange release said here.

Indexes

Volatility Index for 10-Year Treasury Options Begun by CBOE, CME

Bloomberg

The Chicago Board Options Exchange and the CME Group Inc. started an index that measures the pace of projected swings in U.S. 10-year Treasury futures.
The volatility index, based on options on the CME Group’s 10-year Treasury note futures, will be calculated and disseminated by the CBOE to gauge the expected level of swings in long-term Treasuries as signaled by the options market. More than 56 million options contracts on 10-year Treasury note futures traded last year on CME, the world’s largest futures exchange, according to a note published today.

PLY: A good move as Mr Tilly endeavours to expand the ViX franchise. At the same time, on a long-term value front, can CBOE maintain a high separate multiple if it is overly perceived as being in a ‘predator partner’ embrace of CME?

Technology

Xetra Trading System Set to Kick Off in Hungary Dec 6

Fox Business

Hungary’s Budapest Stock Exchange plans to introduce the Xetra trading platform Dec 6, Chairman Zsolt Katona said on Thursday.

PLY: More sound reasoning why a Vienna-Warsaw merger won’t happen. CEESEE Group are rolling out DB’s Xetra while WSE just rolled out NYSE Euronext’s UTP…

Cinnober Builds Financial IT Cluster In Northern Sweden

Cinnober is boldly investing in a financial IT cluster in northern Sweden, centered on the university town of Umeå. The company is also introducing a one-year trainee program this fall.

PLY: Cinnober have implanted themselves as the “go to” guys for exchanges looking for flexible, innovative and reliable solutions to run markets, clearing and supervision. This demonstrates their long-term thinking and given the breadth of brilliant students in Sweden and surrounds, marks a splendid iniative.

Appointments

Dariusz Kułakowski Appointed To The Management Board Of WSE

Dariusz Kułakowski, General Director for Technology responsible for direct supervision of the organisation and operation of the WSE’s IT Department since 2006, has been appointed to the Management Board as a Member of the Management Board and Chief Information Officer.
PLY: Recognition for introducing UTP. Readers may recall Lidia Adamska left GPW/WSE a few months ago. Clearly Adam Maciejewski is shaping the company’s management as he settles in.

Crowdfunding

Investment bankers follow the crowd…funding

Upstart (blog)

A new equity crowdfunding platform combines the tools to invest in growth companies and a team of investment bankers who can not only help oversee online fundraising but perhaps tap into institutional sources for cash.

PLY: “Broker-assisted” crowdfunding, another interesting innovation in the mix!

Other stories

OSE president to lose pay for glitch

The Japan Times

The Osaka Securities Exchange said Wednesday it will cut the monthly pay of its president, Motoharu Fujikura, by 30 percent for one month over a system problem that forced it to suspend derivatives trading in March.

PLY: Even as a token gesture, OSE are trying to make amends. Some western exchanges of late may have had difficulty paying their CEO at all given the level of glitches had they applied the same rules…

Warsaw Stock Exchange launches futures trading training platform

Finextra

As part of its educational initiatives addressed to investors, the Warsaw Stock Exchange has launched a unique learning platform for investments in futures: GPWtr@der.

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