May 3rd 2013

elb2It’s holy grail time for swaps and exchanges…watch for the bumps in the carpet methinks…

Elsewhere an interesting array of stories and a very Happy Easter to all our Orthodox readers!

Public Markets

CME Group profit falls; company sees new revenue in swaps

Reuters

CME Group Inc, the world’s largest futures exchange operator, reported a drop in first-quarter profit as trading in its lucrative energy products slumped and average revenue per trade fell.

The Chicago-based company also said on Thursday that April trading rose a respectable 8 percent at its five U.S. exchanges, and energy trading surged 20 percent.

Executives on a conference call said increased volatility and U.S. oil production indicated energy trading would remain strong.

See the results here

CME Group Vows to Oppose Trading Taxes

Fox Business

CME Group Inc. (CME) on Thursday downplayed the prospect of higher taxes on some U.S. derivatives trading and said the futures exchange operator was lobbying against such moves in Washington.

Some U.S. lawmakers are again pushing for a levy on financial transactions, while certain tax breaks for futures and options traders are also under threat.

Exchanges and traders on both sides of the Atlantic continue to challenge proposed transaction taxes, which they argue will drain liquidity from markets, push up costs and reduce the availability of capital-markets funding.

CBOE blames second outage on move to longer trading day

Reuters

The Chicago Board Options Exchange blamed its second outage in a week on fallout from preparations for expanding trading hours, but executives said they had no plans to abandon the longer trading day and will hire an outside consultant to help.

The start of trading in one of 25 business “clusters” of stock options was delayed Thursday morning for about 10 minutes, with the system unable to handle complex orders in all affected products for the first 34 minutes of the trading day, CBOE said in a memo to clients.

NZX Announces Q1 2013

NZX advises that the Board has today declared a fully imputed dividend of 1.25 cents per share in respect of Q1 2013. The record date is 17 May 2013 and the payment date will be 31 May 2013.

The quantum of the dividend has been set in accordance with NZX’s current dividend policy of paying a fixed amount per share, increasing by a minimum annual amount equivalent to one cent per share on a pre-share split basis.

Regulator Sued Over Rules on Derivatives

The Wall Street Journal

Depository Trust & Clearing Corp. filed a lawsuit Thursday against federal regulators, becoming the latest financial firm to cry foul over new rules for reporting derivatives called swaps.

The DTCC filed a complaint in a U.S. federal court against the Commodity Futures Trading Commission, arguing the regulator “sanctioned anticompetitive behavior” in its rules for the record-keeping of some derivatives. The lawsuit asks the court to undo the regulator’s approval of three rules.

Oslo Børs gets govt nod for Burgundy merger

Finextra

Oslo Børs has received permission from the Norwegian Ministry of Finance to merge Oslo Børs ASA and its Swedish subsidiary Burgundy AB, with Oslo Børs ASA as the acquiring company. The merger is scheduled for 2nd quarter of 2013.

ASX expands OTC derivatives clearing service

Global Investor

The Australian stock exchange (ASX Group) has announced plans to extend its existing OTC derivatives clearing service to include client clearing functions.

ASX said the move would provide extra risk management controls to Australian investors and asset managers, allowing them to protect positions and collateral in the event of default.

NYSE Liffe doubles Asian membership and welcomes KGI Futures as its newest member

The FINANCIAL

NYSE Liffe, the European based global derivatives division of NYSE Euronext, is pleased to announce that it has doubled its Asian membership within the last six months and welcomes KGI Futures Co. Ltd, a leading futures brokerage in Taiwan, as a member of the Exchange’s London and Paris markets.

MCX-SX gets first listing; cuts charges

Business Standard

MCX Stock Exchange (MCX-SX) has got three companies to list on the exchange.

Personal goods company Dabur India has become the first to do so. Metal and mining company Pennar Industries and power company DPSC Ltd are the others, according to a note from the exchange.

Interestingly, the exchange has waived initial listing fees for companies.

The National Stock Exchange has initial listing fees of Rs 50,000, while it is Rs 20,000 for BSE, according to their respective websites.

Private Markets

ITG Reports First Quarter 2013 Results

Reuters

First quarter 2013 highlights included:

GAAP net income of $8.6 million, or $0.22 per diluted share compared to GAAP net income of $5.5 million, or $0.14 per diluted share for the first quarter of 2012. GAAP net income for the first quarter of 2013 included duplicate rent charges associated with the build-out of ITG’s new headquarters of $1.3 million, or $0.02 per diluted share after taxes.

Adjusted net income of $9.4 million, or $0.24 per diluted share, excluding the duplicate rent charges. Both GAAP net income and adjusted net income include a tax credit of approximately $1.2 million, or $0.03 per diluted share after taxes. This credit applied to the full 2012 year but was booked during the first quarter of 2013 due to retroactive changes in tax legislation.

Revenues of $132.1 million, compared to revenues of $136.4 million in the first quarter of 2012.

Expenses of $121.1 million compared to expenses of $127.9 million in the first quarter of 2012. Adjusted expenses, net of the duplicate rent charges, were $119.8 million.

Nigerian Bourse Says Nasdaq Platform to Start by Third Quarter

Businessweek

The Nigerian Stock Exchange (NGSEINDX)’s Nasdaq OMX Group Inc. (NDAQ) trading platform will be operational by the third quarter of this year, said Chief Executive Officer Oscar Onyema.

The system is currently being tested, the CEO said today in an interview in Lagos, the nation’s commercial capital. Arunma Oteh, the head of Nigeria’s capital market regulator, said in December it would probably take all of 2013 to make the system functional.

Natural Gas Exchange Inc. (NGX) Receives Foreign Board Of Trade Status Approval From The CFTC

Natural Gas Exchange Inc. (NGX), a wholly-owned subsidiary of TMX Group, today announced that its application to become registered as a foreign board of trade (FBOT) has received approval from the U.S. Commodity Futures Trading Commission (CFTC). The FBOT registration replaces NGX’s exempt commercial market status, which was eliminated by the enactment of the Dodd-Frank Act.

Other stories

Turkey’s financial dreams

Business New Europe

Turkey stepped up its bid to build Istanbul into a global financial centre in March and April. It kicked off construction of its planned huge new banking district, finalized the merger of its trading exchanges, and launched a drive to lure foreign listings to the new Borsa Istanbul.

Crowdfunding

Crowdfunding takes the rug out from under VCs, angels

Upstart

Some have said equity crowdfunding could put pressure on the venture capital industry. But data compiled by crowdfunder EquityNet suggests it will open whole different categories of upstarts for funding instead.

“Crowdfunding is serving the area of capitalism that was previously underserved,” Judd Hollas, chief executive of the platform launched in 2005 told me. EquityNet, based in Arkansas, connects companies with accredited investors but will expand to offer equity crowdfunding open to all once the SEC issues rules allowing the practice.

Companies have raised more than $200 million on the platform since its inception.

One State Is Leading In Investment Crowdfunding: Guess Which One

Forbes

Add North Carolina to the growing list of states working on intrastate investment crowdfundinglegislation, especially as the equity crowdfunding proposal of the Jumpstart Our Business Startup Act (JOBS Act) won’t be brought up by the SEC for a three …

Crowdfunding 2.0: Where Will It Go? – Morningstar

Morningstar.com

In last spring’s JOBS Act, Congress gave the SEC 90 days to enact rules for crowdfunding, a new type of Internet-based securities offering through which a large number of investors can buy shares in small businesses. The SEC probably hasnever adopted a rule in 90 days, and the underfunded agency is already way behind on dozens of rules required by the 2010 Dodd-Frank Act. But the logic of election-year politics has never been logical. Now Congress is shocked–shocked–that the SEC has not met the deadline.

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