May 31 2016

elb2I hope you enjoyed a splendid Memorial Day Weekend and were lucky enough to catch a classic Monaco Grand Prix and a pulsating 100th Indy 500, with fairy tale ending.

Today in Exchange Invest, BSE heading for IPO but valuation may be perplexing given the last results while ASIC appears to be regulating more according to ASX’s fiat than with an open intention to grow the Australian economy. Chris Hohn occasionally gets things wrong – as he did with his ousting of Werner Seifert – and I think he has it wrong again on DB1-LSE.

The FESE Convention, is upcoming – Malta, 15/16th June while ICDA have already delivered a discount code for their upcoming CyberRisk conference in London, July 20th: Secure a place at GBP 295 with the code YOUNG295.

Public Markets

Hedge Fund TCI Backs DB1-LSE Merger

Reuters

Discussed last week.

QV Premium: DB1-LSE Merger Brief.

PLY: Notwithstanding considerable respect for Chris Hohn’s overall investment ability, I still believe he was wrong to push Werner Seifert out in 2005 (not because Werner was essential but the manner of his undoing left DB1 in flux and, let’s face it, we know now his replacement didn’t really make the most of his position – to put it mildly). So, I thought CH was wrong in 2005 and I firmly believe he is wrong now as the DB1-LSE deal continues to lack any practically coherent logic especially when it won’t pass antitrust. Then there are those assumptions on clearing which might not entirely seem out of place if they appeared in the new Alice in Wonderland film.

 

Banks Set for Capital Reprieve as EU-SEC Derivatives Talks Drag

Silla Brush – Bloomberg

Banks using some U.S.-based clearinghouses to handle their derivatives trades are set to win a reprieve from tougher capital rules as the EU continues talks with SEC on regulatory equivalence.

PLY: I tend to see it as the free market economy just got a reprieve as a sword of pure destruction created by a pedantic bureaucracy hung over their heads…

 

Hong Kong Stock Brokers Cry Foul at Fees Crimping Their Profits

Eduard Gismatullin – Bloomberg

Australia, Tokyo have lower costs compared to Hong Kong.

 

Moscow Exchange To Introduce Collateral For Stress

MondoVisione

NCC Clearing Bank, part of MOEX, plans to introduce collateral for stress as an additional layer of its CCP safeguard structure.

 

ASIC & ASX Do Their Best To Kill The Small End Of The Market (subscription)

Tony Boyd – AFR

Just when the green shoots were starting to show through in Perth’s broking market the securities regulator and the ASX have moved to squash them.

PLY: ASIC remains a beast which, like SEBI, appears more interested in engendering socialist poverty than enabling free markets. Here once again the regulator appears to be eating the line of the ASX which is a classic monopolist’s bad deal – ASX cannot cope with scaling profitably down to the areas of SME financing…ergo it’s a bad idea. Given that even the EU has got its head around the theory that it needs to finance SMEs better, I am not sure Australia can look anything but regressive if it insists on killing shell financing techniques and other approaches which have long funded mining and indeed technology startups…

 

Tullett Prebon Becomes First Platform To Send SEF Trade For Clearing In Japan

LeapRate

Tullett Prebon become the first firm to successfully send a SEF trade for clearing at the Japan Securities Clearing Corporation (JSCC) following execution on tpSEF’s hybrid trading platform.

 

JSE Working With Other Exchanges Across Africa On Cross-Listings & ETFs

Ryk van Niekerk  – Moneyweb

 

NLX Renews Market-Maker Scheme (subscription)

FOW

The scheme will run for a period of 6 months from 1st June 2016.

PLY: …And at the end of it clearly NLX will desperately hope that ‘past performance may not be indicative of future outcomes.’

Private Markets

BSE To Sell Up To 30% Stake By FY17-end

Jayshree P. Upadhyay & Ankit Doshi – Livemint

BSE will sell up to a 30% stake before 31 March 2017 through a so-called offer for sale (OFS) with a possible fresh sale of equity tagged on, the exchange informed its shareholders on 28 May. The exchange could raise around Rs.1,300 crore (USD 193m) from the sale. BSE will hold its AGM on 24 June and seek shareholder approval for the listing, which would make it the first listed stock exchange in the country.

PLY: Very interesting article, even with some comments from myself.

 

China To Allow Qualified Financial Firms To List On New Third Board

Reuters

CSRC would resume listings by qualified financial institutions and private equity firms on the country’s OTC New Third Board, part of efforts to fund innovation and stimulate growth.

 

Australia To Auction $11.5m Confiscated Bitcoins

Reuters

Around A$16 million ($11.49 million) worth, or 24,518  confiscated bitcoins will be auctioned in Sydney on June 20-21 organized by EY, the first such auction outside the United States.

 

Ex-Citi Trader’s Bitcoin Exchange Skirts Currency Curbs

Shai Oster – Bloomberg

Bitcoin Mercantile Exchange has already turned profitable.

PLY: Fascinating market in the gray area skirting full regulation – cannot say I approve of that status nor do I believe it works in the long term, even for a more punting shop than risk transfer &/or capital growth mechanism such as BitMEX but the dynamics are interesting.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL largely flat over the weekend.

ROC Approves Financial Technologies Name Change To 63 Moons Technologies

The Economic Times

In August last year, Financial Technologies (FTIL) had proposed to change its name to 63 Moons Technologies as it seeks to reinvent itself in the wake of the NSEL crisis.

PLY: If Tom Clancey had written a thriller based around FTIL’s trajectory including this name after its disgracing through the NSEL scandal, I doubt many would deem “63 Moons…” credible as this reputational damage avoidance rebranding takes place.

Technology

NSE To Launch Two-Factor Authentication For MF Platform Users

Moneycontrol

To enhance security measures for investors, leading bourse National SE (NSE) said it will implement two-factor authentication for users of its web-based mutual fund platform from May 30.

 

Abu Dhabi Global Market Signs FinTech MOU With Flat6Labs

MondoVisione

Products

FESE: Response To ESMA Consultation Paper On Guidelines On Information Expected Or Required To Be Disclosed On Commodity Derivatives Markets Or Related Spot Markets Under MAR

MondoVisione

PLY: Dull headline but a vital important topic.

 

DB1 & Taiwan Futures Exchange Enter Into Market Data Partnership

DB1

DB1 to act as licensor of TAIFEX market data to international clients.

PLY: Off the top of my head (fact checking with Frankfurt remains a futile exercise as they don’t appear to know either &/or take a week to reply, after prompting), amongst others, DB1 market data partnerships also encompass the Philippines, Shanghai SE & BSE.

 

ESMA Issues Q&A On MAR Implementation

MondoVisione

 

ESMA Issues Opinion On MiFID II Standards On Ancillary Activities

MondoVisione

 

NZX Launches Milk Futures To Tepid Early Demand
Rebecca Howard – Reuters

 

HKEx Aims To Launch First Exchange-Traded USD/CNH Option This Year

Business Times

 

Taiwan Futures Exchange To Launch USD-Yuan Futures Options

Roger Tung – Reuters

The product,planned to be launched next month, will be based on offshore U.S. dollar-yuan rates cleared in both Taiwan and Hong Kong.

Indexes

SGX Launches SGX Sustainability Indices

MondoVisione

Career Paths

On 23 May 2016 Mr. Grzegorz Zawada, VP of the Warsaw SE Management Board, resigned from his position. Mr. Michał Cieciórski was appointed new Member of the Exchange Management Board (supplementary information).

PLY: Very sad to see that the politics of Poland have now essentially completely changed the management of GPW once more and it is challenging to see what benefit the company has seen from this endless intervention from first one government and now another. I am sorry to see Grzegorz go as he is a genuine pro market deal maker and now it is not clear if GPW has any such person in the ranks. This is disappointing but not unexpected given the loss of direction in not just the Warsaw SE but Poland Inc in recent times thanks to a lingering Communist mentality striking back.

FCA announced that Megan Butler has been appointed permanently to the role of Director of Supervision – Investment, Wholesale and Specialists (SIWS), having previously been in the role on secondment from the Prudential Regulation Authority (PRA) where she was Executive Director, International Banks.

The Monetary Authority of Singapore (MAS) announced the reappointment of four members of the MAS BoD, with effect from 1 June 2016.

The President has re-appointed: Mr Lim Hng Kiang, Minister for Trade and Industry, as member & Deputy Chairman of the MAS Board, (additional 3 year term), Mr Lim Chee Onn, Senior International Advisor to the Ascendas-Singbridge Group, Mr Peter Ong Boon Kwee, Head, Civil Service & Permanent Secretary (Prime Minister’s Office, & Professor Tan Chorh Chuan, President, National University of Singapore, as members of the MAS Board (addition 2 year terms).

Board of Directors of the Monetary Authority of Singapore (as of 1 June 2016):

Mr Tharman Shanmugaratnam (Chairman) – Deputy Prime Minister, Mr Lim Hng Kiang (Deputy Chairman) – Minister for Trade and Industry, Mr Heng Swee Keat – Minister for Finance, Mr Lawrence Wong Shyun Tsai – Minister for National Development, Mr Quek See Tiat – Deputy President, Council for Estate Agencies, Mr Lim Chee Onn – Senior International Advisor, Ascendas-Singbridge Group, Mr Peter Ong Boon Kwee – Head, Civil Service & Permanent Secretary (Prime Minister’s Office), Professor Tan Chorh Chuan – President, National University of Singapore, Mr V K Rajah – Attorney-General, Mr Ravi Menon – MD, MAS.

Financial Calendar

31.05 – Record date ITG $0.07 quarterly dividend

01.06 – BGC Partners $0.16 dividend payment

01.06 – Record date Interactive Brokers $0.10 quarterly dividend

03.06 – Record date CBOE $0.23 dividend

07-08.06 – FIA IDX

New! 10.06 – CFTC Division of Market Oversight – public roundtable meeting, to discuss certain elements of the Commission’s notice of proposed rulemaking (NPRM) regarding Regulation Automated Trading.

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

Other stories

ASIC Releases Its Third Licensing Activity Report

MondoVisione

 

ESMA Consults On Proposed Implementing Measures For Benchmarks Regulation

MondoVisione

 

Alberta Securities Commission To Enact Its New Fee Rule

MondoVisione

 

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