May 28 2015

elb2 For those who live in the parts blessedly uncomprehending of football and its wickedly corrupt ways all you need to appreciate is that the man in charge of world football has suddenly turned even more mute than Hillary Clinton since she started running for President. No sign anybody at FIFA had their own private email servers but the amounts of money involved seem healthy even compared to the balance sheet of the Clinton Foundation.

There is a big extra-territorial issue here however and that will reach markets sooner or later. More to follow in Premium.

In today’s Exchange Invest, Hong Kong government requests exclusive ‘gateway to China’ status. Plus 500 may know what is going on but I would not commit a large leveraged CFD to supporting that notion, judging from the reportage of their ‘heated’ AGM…

…and there’s more, including a Swedish crisis of market abuse which actually brings us back neatly to that US extraterritorial pig’s bladder kicking thing. Watch this space.

Public Markets

Sweden’s Antitrust Agency Sues Nasdaq OMX For Market Abuse

The Swedish Competition Authority is taking legal action against Nasdaq OMX Group Inc., claiming the company’s Stockholm exchange abused its market dominance to the detriment of a competitor.

The agency wants Nasdaq OMX to pay 31 million kronor ($3.7 million) in penalties and administrative fines, according to a statement on Thursday.

The alleged abuse occurred after European Union markets were deregulated in 2007. Burgundy, a trading platform that had subsequently sought access to a data center in Stockholm, was blocked by Nasdaq through “coercive methods,” the antitrust agency said.

PLY: Almost precisely 74 years ago, on 11th May 1931, to be precise, a modest Austrian bank, the CreditAnstalt went bust and fuelled the credit implosion which drove the Great Depression. This suit will not do create a depression but it may yet drive a domino effect. If OMX has a case to answer here, then how long before a lot of other very blatant cases of market abuse being permitted (or at least a blind eye being applied) are suggested by other regulators?

Let Us Enjoy Exclusive Fund Link Status, Hong Kong Asks Beijing (subscription)
South China Morning Post

The Hong Kong government has requested that Beijing allow the city to enjoy for a while the status as the only financial centre with mutual recognition of cross-border funds with the mainland, before the central government seals similar deals with other markets.

PLY: A direct shot across the bows of pending deals as far afield as Singapore and even Frankfurt. HKEx and the HK government recognise the precarious nature of their gateway position – akin to that excellent small book written by Marc Faber on the occasion of the handover of Hong Kong to China by the British in 1997.

Amongst a multitude of other material in our Premium Service, see also: China Capital Markets Transformation – Exchanges & Markets, ETPs & Exchange Infrastructure – Part 1Part 2, Part 3Part 4, Part 5

Plus500 Apologises To Customers At Spread-Betting Firm’s Annual Meeting
The Independent

What Plus500 Customers Were Angry About
City AM

PLY: The rolling carnage from Plus 500 isn’t gathering any moss but I am not sure we have reached a point of clarity either. An apology has been issued alongside a bit of blamestorming of previous management in the UK, i.e those who can’t defend themselves. Business Insider appears to have succinctly surmised the problem below:

Plus500 Just Admitted That ALL Of Its UK Accounts Are Frozen
Business Insider

The Plus500 fiasco around customer identity checks just keeps getting worse for everyone involved.

The spreadbetting company admitted at its annual general meeting in London that ALL of its UK accounts have been frozen while it double checks the identity of who owns them.

When the saga first broke last week the company said just 55% of UK accounts had been frozen.

PLY: Readers ought to recall that Plus 500 has traditionally prided itself on its IT being of superior quality. In a world where 55 turns out to be 100, I for one am rather concerned about the quality of their risk management as that’s, well a goodly several sigma of mathematical inexactitude.

Plus500 Says Sales ‘Significantly’ Hit After Accounts Frozen

Plus500 Ltd. said there’s “no evidence” the trading firm will be fined amid regulatory probes as investors criticized the way management disclosed frozen accounts to the stock market.

“There’s no provision at the moment because there’s no evidence that we need one,” Chairman Alastair Gordon said at the Israeli company’s annual meeting in London on Wednesday, when he was asked about possible fines. The “lesson learned” is that “regulatory and compliance procedures were not good enough,” he added.

Previous comment and mentions about Plus 500 slump here, here & here.

PLY: If the FCA do not fine Plus 500 – at least… then it will finally be entirely clear that the UK regulator have abandoned all pretence to operate fair and orderly markets instead preferring competition in a manic form of robber baron regulatory oligopoly which fails all parties.

Private Markets

Bank Of China Signs MoU With DGCX (subscription)
Shanghai Daily

New Zealand’s Financial Markets Authority: Receivers & Managers Appointed To Arena Capital/ Blackfort FX

PLY: Down under a retail forex/spread/cfd broker dies…

UCX Starts Refunding Money To Members
Business Standard

In a relief to members of the now-defunct Universal Commodity Exchange (UCX), the exchange recently refunded Rs 3.7 crore of margins and other deposits to 127 members. A refund of Rs 2.7 crore to four members, named in the forensic audit report done by KPMG, has been withheld. Now, the exchange owes only Rs 1.25 lakh to a member. The exchange is ascertaining bank details of the member, said a source.

MCX Seeks Sebi Nod To Raise Its Stake In MSEI
Economic Times

Apparently MCX, wrote recently to Sebi for permission to raise its stake in the Metropolitan Stock Exchange of India (MSEI), erstwhile MCX-SX, from 4.14% to 15%, once the Sebi-FMC merger fructifies. MCX, on Tuesday, denied reports of a possible merger of MSEI with itself in a section of media.

Is This P2P Platform The Next Unicorn From China?

Accenture: UK Government Should Regulate Bitcoin Wallets

The UK government should apply the same regulation and identification requirements to bitcoin wallets as it does to bank accounts, Accenture has suggested.

PLY: In a desperate move to secure their place as intermediaries, Accenture is eager to suggest more new rules to further kill innovation.

Bitstamp Clients Now Receive USD, EUR Or GBP Denominated Debit Cards

Regulation & Tax Breaks For Bitcoin Proposed By NJ Lawmakers

Two north Jersey lawmakers recently proposed a 30-page bill(A4478) that would create a regulatory framework for the companies that deal in digital currency and offer tax breaks to companies that service or exchange it.

Bitcoin Center Opens In Brazil’s Capital City

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL and MCX flat to slightly off.

ICAI To Submit Decision On NSEL Auditor Soon
Business Standard

The Institute of Chartered Accountants of India (ICAI) is likely to decide soon on the complaints against scam-hit National Spot Exchange (NSEL)’s auditor, Mukesh P Shah & Co.

Read our Premium NSEL Scandal Brief – Main File


Thomson Reuters To Champion Higher Industry Standards For FX Trading-New Provisory Liquidity Protocol Enables Market Participants To Make Informed Choices About The Use Of ‘Last Look ’Liquidity Through Transparent Measurable Performance Criteria

PLY: No, seriously, did you actually read that entire headline? How can Thomson Reuters be the home of centuries of exquisite journalistic craft and yet produce such utterly dismal headlines for its PR?

Misys Bids To Unlock Hidden Value Of Data With In-memory Analytics Engine
Finextra (press release)

Misys, has launched an in-memory analytics engine, FusionBanking Insight, integrated with its next-generation core banking solution, FusionBanking Essence, to enable banks to gain insight into the profitability of customers, branches and products to deliver services that their customers will value most.

investFeed Is Revolutionizing The Way The World Makes Stock Investment Decisions

With investFeed, savvy stock investors everywhere finally have the opportunity to earn additional income by sharing their real-time stock recommendations, positions, and strategies with other investors.

That means the platform enables users to view, share and even duplicate a chosen trader’s moves in real-time. Users can also choose to publish their own stock recommendations and earn income from people who are interested in following them!

PLY: Really eToro with more Twitter followers? There is a danger of blind leading the blind or a great contra tool. Interesting big data play although I am not sure it will play out the way their PR breathlessly intones…

TTSEC Launches IE Website And Digital App


Hotspot Introduces Market-Leading Standards For Liquidity Providers
Business Wire

BATS’ Hotspot, has announced new standards for liquidity providers qualifying as Market Makers

Nasdaq Upcoming Changes To Rules: Contract Specifications, Fee List and Collateral List
GlobeNewswire (press release)

…upcoming amendments to the Trading and Clearing Rules of Nasdaq Commodities effective June 8, 2015.


Qatar Exchange Working With Companies To Increase MSCI Weightage

Dubai: Qatar Stock Exchange is closely working with companies in order to increase its weightage on the MSCI, even as the traded value tripled after the MSCI happened last year.

Career Paths

OCC Appoints Three New Members to Board of Director according to MarketWatch

The world’s largest equity derivatives clearing organization, announced that George S. Fischer, Thomas A. Frank, and Eric W. Noll have joined its board of directors as Member Directors. Fischer and Frank were elected to terms ending in 2018, while Noll was appointed to fill a vacancy with a term ending in 2017.

PLY: Very interesting hires, Thomas A. Frank has a long history with IBKR and Timber Hill as well as Eric Noll who has significant experience from his NASDAQ and Convergex days. The OCC board is adding value with these additions to the board.

Urbana Corporation announced the appointment of Charles A.V. Pennock to its Board of Directors effective immediately, according to Stockhouse

According to ICAP announced Ted Bragg will serve as SVP of fixed income product initiatives for the Icap US Securities group beginning immediately.

U.S. Seeks Details On Top China Official Amid Bank-Hiring Probe (subscription)
Wall Street Journal

U.S. government investigators are seeking information about Wang Qishan, the powerful official leading China’s anti-corruption campaign, in connection with their probe of J.P. Morgan Chase & Co.’s hiring of relatives and associates of Chinese government officials.

The SEC issued a subpoena in late April to the bank requesting all of its communications related to 35 mostly high-ranking Chinese government officials. Mr. Wang’s name was first on the list in the subpoena, a copy of which was reviewed by The Wall Street Journal. Prosecutors at the U.S. Justice Department have also requested information about Mr. Wang, according to people familiar with the matter.

Financial Calendar

This week:

28 May

Interactive Brokers Group, Inc. (IBKR) Ex-Dividend Date

29 May

Record date CBOE $0.21 quarterly cash dividend
Record date TMX $0.40 dividend
Oslo Bors NOK 8.20 dividend payment
BGC Partners $0.14 quarterly dividend payment

Next month:

Euronext Announces Third Pan-European Days In New York & Boston from 1- 4 June.

Interactive Brokers Group, Inc. to Issue Quarterly Dividend of $0.10 on June 12th
CBOE Holdings, Inc to Issue Quarterly Dividend of $0.21 on June 19th.

Ordinary General Meeting of the Warsaw Stock Exchange set for 25 June.

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

Share Notes

James Brown Continues Mass Sale Of FXCM Shares, Has Sold More Than $1 Million Worth In 1 Week

Independent FXCM director James Brown has sold further shares in the company as the latest in a series of transactions, taking the total value of shares that he has sold in just one week to $1,093,904

James Brown has sold another 149,419 shares in the company over a series of transactions reported by the firm on a filing with the US Securities and Exchange (SEC), at a value of $194,244.

PLY: Given the way Leucadia appear to be hollowing out the assets of FXCM as they go, the insiders, are clearly doing the abandon ship trade as is always alleged against a certain rodent species…

Insider Selling: Charles R. Schwab Sells 400,000 Shares Of SCHW
Mideast Times

Charles Schwab Corp (NASDAQ:SCHW) major shareholder Charles R. Schwab sold 400,000 shares of stock in a transaction that occurred on Friday, May 22nd. The stock was sold at an average price of $31.54, for a total bargain of $12,616,000.00.

Analyst Notes

Research firm Zacks has rated NASDAQ at 3, indicating that for the short term the shares are a hold.
NASDAQ OMX Group (NASDAQ:NDAQ) has been given a “BBB+” credit rating by analysts at Morningstar. Moderate default risk
London Stock Exchange Group Plc Given “Buy” Rating at Citigroup Inc.

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

All Analysts, Banks and Brokers are welcome to contribute to this section.


We Know Equity Crowdfunding – But What Is “Pre-crowd”?

So what does pre-crowd refer to and why does it matter? Pre-crowd is short for pre-crowdfunding. It is the first stage of the three principal stages a company goes through when raising capital via equity crowdfunding.

PLY: Sorry this sounds like a daft concept to me promoted by folks who have little more to do than to seek to complexify the whole situation.

Valuations In Crowdfunding: Is The Crowd Better Than The Professionals Or Just Barking Mad?

PLY: Given that most crowdfunding is at sizes where the professionals cannot afford to tread, this is surely an apples and oranges comparison.

Other stories

Reform Boost For Tokyo Stocks
Anthony Fensom – The Diplomat

After 26 years, Japanese investors had cause for celebration Friday with Tokyo stocks’ market capitalization finally breaking a bubble-era record. With corporate governance reforms set to commence in June, could more market records be smashed?

On Friday, the market capitalization of shares listed on the first section of the Tokyo Stock Exchange (TSE) trumped their previous bubble-era peak by reaching 591.3 trillion Japanese yen ($4.8 trillion), exceeding the previous record of 590 trillion yen reached in December 1989.

PLY: Which means the Japanese stock market has been in decline for most of my financial career – hardly an encouraging maxim. The EU ought to pay close attention…

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