November 02 2015

elb2George Boole 200th Anniversary Special Edition

 

First up it’s a very Happy 11001000th birthday to the genius George Boole whose reductionist logic systemised Aristotle and helped Yes/No, True/False and Google’s favourite 0 or 1. Born 200 years ago today, it was as a Professor in Cork, Ireland, Boole fashioned the theories which have spawned a mass of search logic and indeed automated trading systems in the contemporary digital world.

From the Boole to the spool, ICE launches World Cotton today, Mexican broker proposes competition with BMV, oh and as we race to pixel, deal confirmation in the payment parish: Visa has bought Visa Europe for circa $23 billion. Ah, the blacksmiths they are a-merging in the face of the automobile!

Lots to read today (entirely a true / Yes / 1 ranking I would contend), happy scrolling:

Public Markets

LSE Completes Sale Of Proquote To IRESS
Reuters

Terms of transaction have not been disclosed. Q.V. Premium Exchange Deals Brief

PLY: Boolean outlook for LSE Group is simply “Buy OR Sell” – which will Xavier achieve?


CEINEX & Bank of China Announce Cooperation
DB1

CEINEX & China Construction Bank Announce Cooperation
DB1

PLY: MOUs to help develop CEINEX which was launched last week. Not entirely sure these are more than glorified membership applications but at least CEINEX seems to have support from RMB banks.


HKEx Wants To Expand China Equity Link To IPOs
Eduard Gismatullin – Bloomberg

HKEx expects to expand ’through train’ enabling Chinese mainland investors access to IPOs of foreign companies. Q.V. in Premium China Capital Markets Transformation Brief – Main File


Mexican Broker Cencor Proposes Competing Stock Exchange
Reuters

Mexican broker Cencor will seek permission to organize and operate a new stock exchange, the first to compete with Mexican SE. The proposed Bolsa Institucional de Valores would take advantage of Mexico’s recent financial reforms to offer an alternative with cheaper transaction costs, greater liquidity and technological innovation. Cencor said it believed competition between exchanges could add an extra 30% of growth to the stock market.

PLY: Interesting point: Cencor reckon stock market competition may even enhance investor returns. That’s not a frequent claim but ought to keep the academic fraternity occupied, playing with the data in their PhD sandboxes. It will be interesting to see if other progressive South American entities like ATG seek to get involved here, and/or the major markets while clearly NASDAQ will be keen (amongst others) to deliver technology given their existing relationships in the region…


‘Spoofing’ Defendant Was Biggest Trader In Markets
Reuters

Michael Coscia, the first trader being prosecuted under a U.S. “anti-spoofing” law, became the biggest player in markets ranging from gold to soybeans when he launched computer programs designed to cancel large orders within a fraction of a second.

PLY: Jury applying Boolean logic will clearly decide 1 or 0 to his alleged spoofing.


EU Lawmakers Make Headway With Rules For Risky Bank Trading
Huw Jones & Tom Korkemeier – Reuters

EU lawmakers have ended a stalemate over plans to curb risky trading at banks after months of wrangling.

PLY: A little logic here, a little fudge there, banks’ multi million Euro lobbying succeeds again in the face of an EU which incorrectly asserts “too big to fail” as part of its binary mantra for survival/continuation.


Euroclear Says Won’t Make ECB’s New Settlement System On Time
Reuters

Euroclear won’t be ready to join a ECB landmark project on time next year to streamline the continent’s complex financial plumbing.

PLY: Another clear example of why Euroclear needs a coherent revamp. Rumours their Imperial dimension punch card printer supplier has gone out of business causing the delay may be wide of the mark. Maybe.

The heartening bit is that the problems are reported by Euroclear as now being “under control.” Er…, read that again and apply a little Boolean logic to the question “How safe do you feel that some management projects at Euroclear are by their own admission, out of control?”

Yip, it’s a big fat 0000000 for me.


Serbian & Russian CSDs In Alliance
Finextra

Russia’s National Settlement Depository, and Serbia’s CSD and Clearing House signed a MoU.


Dark Pool Caps to Test Traders, Not Systems
Markets Media

PLY: The delightful simplistic reductionism of Boole has no truck with the EU, hence the moronic complexity of dark pool caps.

Private Markets

Asset Managers Back Block Trading Rescue (subscription)
Chris Hall – Financial News

Clive Williams, global head of trading at T Rowe Price and a Luminex board member, said: “We know we may fail spectacularly, but feel we have little choice due to the inability of the market to trade blocks.”

PLY: Brutal line from Clive Williams which rather undermines the existing Institutional Liquidity Platforms, while the entire article represents crunchy stuff from Chris Hall as he aligns a series of quotations from buyside chief dealers who also happen to be NEDs at different platforms, including my excellent former colleague from the Liquidnet Europe board, Adrian Fitzpatrick of Kames Capital.


CLTX Launching E-Trading Platform
Natsuki Kaneko – Nikkei

Cleartrade Exchange (CLTX) plans to begin electronic trading of iron ore in November.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Flat to slightly off day as the NK Proteins Chairman is in custody:


Largest NSEL Defaulter In Police Custody
Dilip Kumar Jha – Business Standard

The Economic Offences Wing (EOW) of the Mumbai Police arrested NK Proteins Chairman Nimish Patel. NKP is the largest individual NSEL defaulter. The Maharashtra Protection of Interest of Depositors (MPID) court has sent him to police custody till November 6. NKP has so far paid back Rs 35.44 crore (USD 5.4 mln) of its total payment obligation of Rs 969.89 crore (USD 148 mln).

Technology

DB1 & BSE India Further Strengthen Strategic Alliance
DB1

PLY: More little incremental steps as DB1 certainly enhances its content platform… This is interesting, the little acorn development index could show some crunchy results in due course.


HKEx Supports Programme For Hong Kong’s Emerging FinTech Industry
MondoVisione

HKEx Backs New Fintech Accelerator (subscription)
Anna Irrera – Financial News

HKEx has become the latest backer of a new accelerator that seeks to help scale foreign fintech start-ups and growth-stage companies into Asia, as cities in the region look to grow their local ecosystems.

PLY: Focus is key, a lot of markets appear to be scatterguns while some have more tangible processes (DB1 and CME – the latter having shown a very strong tangible result last week with their Dwolla payments deal).

Products

US Agencies Finalize Swap Margin Rule
MondoVisione

From Memphis To Malaysia, Cotton Goes Global With New ICE Contract
Chris Prentice – Reuters

‘Death’ Of China Futures Trading Amid Tight Limits & Probe Into Short Selling (subscription)
Don Weinland & Benjamin Robertson – SCMP

Once the world’s most heavily traded futures market, China Financial Futures Exchange just ended its worst month in years as it awaits results from investigations launched by the securities regulator.

PLY: Which leads me back to my comments of last week on just how governance will flow at CEINEX.


NSE Extends Concessional Transaction Fee In Equity Derivatives
Business Standard

Euronext Partners With Heckyl Technologies To Provide Sentiment Analysis
Euronext

PLY: A cool free add on for retail traders.


Asset Owners Could Pay Price In ETP Exchange Wars
Rick Baert – Pensions & Investments

Volatility, best execution might suffer in quest for greater market share.

PLY: Crunchy read, raises pertinent points.


Nodal Exchange Announces Launch Of New Generation Node Power Futures Contracts
BUSINESS WIRE

CLS & TriOptima Unveil Portfolio Compression Service For FX Swaps & Forwards
Solomon Teague – Euromoney

CLS Group, that settles trades for the FX industry, and TriOptima have launched the triReduce CLS Forward FX Compression Service.

PLY: Hooray.


China’s Green Bond Market Set To Rocket In The Next Five Years
(subscription)
Eric Ng – SCMP

Mainland China’s green bond market could grow up to 10-fold by 2020 as Beijing is expected to soon roll out regulations on its development, and Hong Kong could get in on the action as a key international financial centre to tap its vast market potential.


Sebi Talks Tough Over Commodity Manipulation
Business Standard

SGX Eyes Bigger Slice Of Booming ETF Market Pie
Cai Haoxiang – Business Times

Career Paths

FINRA said that Chairman & CEO Richard Ketchum, 64, has announced his plan to retire in H2 2016. The Board of Governors will conduct a search for his successor that will take into consideration internal and external candidates.

FTF reports that Convergex hired Jon Simblist as MD of the options unit. Most recently, Simblist worked at Instinet as head of electronic derivative sales.

The Globe and Mail reports that ETF pioneer Howard Atkinson, President of Horizons ETFs Management (Canada), will be retiring from the firm at the end of this year.

FT reports that Marcus Bolton, the head of the US business for Tullett Prebon, is set to retire at the end of the year.

Waters Technology reports that Darren Marsh has joined Markit‘s London office as a director in reference data.

Financial Calendar

02.11 – ICE Futures U.S. To Introduce World Cotton Contract

02.11 – CFTC’s Market Risk Advisory Committee

04.11 – Record date MarketAxess $0.20 quarterly cash dividend

05.11 – TMX Q3 2015 Results

05.11 – ITG Q3 2015 Results

05.11 – FXCM Q3 2015 Results

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

Share Notes

Nasdaq CEO Robert Greifeld sold 9,512 shares on Oct 29, 2015 at $59.26 (bargain $563,681.12).

IBRK President Milan Galik sold 12,789 shares on October 27, 2015 at $40.52 (bargain $511,973.69).

IBRK insider Thomas Aj Frank sold 12,789 shares on October 28, 2015 at $40.03 (bargain $511,943.67).

Oslo Børs VPS Holding ASA has 30 October bought 10,000 own shares at NOK 88 per share. Oslo Børs VPS Holding now holds 12,673 shares.

Analyst Notes

ICE “Buy” Rating Reaffirmed By Deutsche Bank – $270.00 Price Objective, Down From $290.00

CME “Buy” Rating Reaffirmed By Deutsche Bank – $106.00 Price Target

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

Crowdfunding

SEC Adopts Rules To Permit Crowdfunding
SEC

Crowdfunding Allowing Internet Stock Sales Approved By SEC
David Michaels – Bloomberg

PLY: For those who can barely recall the last recession, you probably will struggle to recall when this law was passed. However plaudits to the father of the JOBS, David Weild and all those who saw this process through – finally, the SEC got their act together after a considerable delay.

The worrying point is the fact that the SEC couldn’t actually unveil an open approach and have instead layered a ton of nebulous provisions which mean only the lawyers are winning right now. #SECdoesn’tdoBoole.

Other stories

Statement By SEC Chairman Mary Jo White, Open Meeting On Regulation Crowdfunding And On Securities Act Rules 147 And 504
MondoVisione

Dissenting Statement, SEC Commissioner Michael S. Piwowar, Oct. 30, 2015
MondoVisione

PLY: Commissioner Piwowar steps up to fill Dan Gallagher’s shoes as the advocate of freedom and free markets without the leaden provisions of a regulator incapable of permitting the slightest risk:

“While crowdfunding was intended to be a treat for the smallest and least sophisticated companies seeking to raise capital, today’s rules are full of tricks.  The rules will spin a complex web of provisions and requirements for compliance.  I fear that many traps for the unwary are hidden in the regulations, creating potential nightmares for small business owners that fail to place regulatory compliance at the top of their business plans.  Such burdens will spook many small businesses from pursuing crowdfunding as a viable path to raising capital.

A number of concerns have already been raised as to whether our rules are too restrictive or too burdensome.  In fact, many of these restrictions are embedded in the statute itself.  For instance, even if you are Warren Buffett or Bill Gates, you are limited to investing no more than $100,000 during any 12-month period in all crowdfunding investments.”

Making Capital Formation Work For Smaller Companies And Investors, SEC Commissioner Luis A. Aguilar, Oct. 30, 2015
MondoVisione

Statement On the Adoption Of Regulation Crowdfunding, SEC Commissioner Kara M. Stein, Oct. 30, 2015
MondoVisione

Statement On Proposed Rule Amendments To Facilitate Intrastate & Regional Securities Offerings, SEC Commissioner Kara M. Stein, Oct. 30, 2015
MondoVisione

UK Chancellor Announces Closer Ties With Brazil On Infrastructure & Financial Services
MondoVisione

PLY: The grandstanding continues from the UK’s congenitally weak Finance Minister. Given that a fortnight ago he was promoting a (probably already still-born) Sino-LSE ‘through train’ a fortnight before the launch of CEINEX, what have DB1 got waiting in the wings, will they buy BM&F Bovespa? Just kidding. I think…

In Boolean terms, we will be back tomorrow AND Wednesday AND…well, you get the gist…

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