November 03 2015

elb2For those who worry that the EU’s apparatchiks haven’t got a clue, this is a day to worry harder.

Meanwhile, a follow up to September’s Young Markets. The good folks of CIAMSE, who partnered with the event & delivered much chunky content including the machine learning workshop, are celebrating after winning the Grand Prix and also the special Award from Interior Minister Aleksander Brol for, respectively, Michal Grela’s research into cryptocurrencies & their taxonomy, and, preventing DDOS attacks on critical infrastructure such as exchanges. Congratulations to Professor Kamil Kulesza’s team on these great successes at the XXI Forum Teleinformatyki in Warsaw.

Don’t forget: just over a week to go before “Herbiefest” the MondoVisione Exchange Forum – I am making my second and final chairman’s appearance, so book now.

New premium posts on the sidebar, happy reading and now it’s time for a spot of scrolling:

Public Markets

Futures Giants Warn Of ‘Disappearing’ Hedging Market (subscription)

Tim Cave – Financial News

Europe’s largest futures exchanges have raised the alarm over the impact new EU trading rules could have on those who use derivatives markets for genuine hedging, rather than to make speculative bets.

PLY: The ability of the Eurocrats to display stunning ignorance is in plain sight, alas. When regulators cannot tell their front month from their spot month, it’s obvious the rules are not being prepared by folks who on the other side of the fence could be regarded as fit and proper.

Eurocrats would do well to read In defence of Derivatives From Beer to the Financial Crisis from the Cato Institute to refresh just why they need hedging and how their shortsighted actions will only harm the populous at large…


Beyond Evaluations, Will Buyout Put Interactive Data On ICE? (subscription)

Max Bowie – Waters Technology

Last week’s acquisition of IDC by ICE came as something of a surprise to the data world…

“…and if there’s one thing we’ve learned from ICE’s steady rise, it’s that ICE doesn’t waste money on trophy acquisitions: it gets what it wants, and leverages each acquisition to the fullest to strengthen its core business….

…So the question is, does ICE want to be in the data vendor business, or does it just want control over datasets that it believes will be big revenue-generators? My money’s on the latter. “

QV EI Premium:  ICE Gets Big Data.

PLY: Good analysis by Max Bowie although given that they have yet to show their real value add, I think the strength of the ICE has been in making some ‘trophy’ acquisitions which haven’t worked out (e.g. Climate Exchange while the relatively disappointing Creditex is probably closer to delivering real value alongside IDC) as they ought. However, the ICE’s ability to stay focussed and keep moving forward without politics remains a key strength in its execution capacity. I still like this IDC deal – that it “came as something of a surprise to the data world” tells you all you need to know about that silo btw..


Regulations Threaten JSE Monopoly

Stuart Theobald – BDlive

…publication of the long-awaited Financial Sector Regulation Bill by National Treasury. That will allow it to implement its “twin peaks” regulatory architecture.

PLY: Very interesting. The “twin peaks” approach is one item, the better news still is that the opening of South Africa to exchange competition means “the Financial Services Board is sitting on at least three applications from potential new local securities exchanges.” Interesting comments about CCP here too, must do a bit of digging to discern more… Interestingly I recall promoting the mantra of bourse competition in Pretoria (along with the then independent Bond exchange and SAFEX in the company of Patrick Birley and Tom Lawless amongst others. Just goes to show, the blob does listen…it just takes a while to act.


CFTC’s Division of Market Oversight Extends Time-Limited No-Action Relief For SEFs from Certain “Block Trade” Requirements


Private Markets

SECP Grants Formal Approval To Formation Of PSE

The Nation

The SEC of Pakistan (SECP) has granted in-principle approval to the schemes of integration between the Karachi SE (KSE), Lahore SE (LSE) and Islamabad SE (ISE) under the name of Pakistan SE (PSE).

QV EI Premium: Pakistan Exchanges Merger Brief.


Taiwan Declares Bitcoin An Illegal Asset

Nuno Menezes – newsBTC

PLY: I suppose when the Central Bank became aware of Bitcoin as a result of it being demanded as ransom in the kidnapping of a Hong Kong businessman, it might have coloured their view a touch.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Flat to slightly up day for MCX and FTIL. as Jignesh strikes back against personal affronts through his corporate vehicle.

Court For Quick Liquidation Of Defaulters’ Assets

Dilip Kumar Jha – Business Standard

The Maharashtra Protection of Interest of Depositors (MPID) court on Monday expressed displeasure over the delay in liquidation of properties attached by various authorities over the payment crisis at NSEL.

PLY: Delighted to see MPID express displeasure, hopefully there will actually be some restitution.


FTIL, MOCBPL Files Defamation Cases Against Activist Ketan Shah

Maulik Vyas – The Economic Times

PLY: The colourful, voluble Mr Shah has occasioned the ire of Jignesh his namesake, whose photo Mr Shah uses on Twitter with the word ‘crook’ in red letters across Mr Shah’s profile. In India they do behave in a somewhat raw fashion when it comes to financial scandals but the swagger of Jigger, in bringing such an action seems to suggest any shahdenfreude at his downfall may be misplaced.


OneMarketData Acquires Tick Data Inc.


…undisclosed sum.


NYSE, ICE Announce Increased Capacity, Enhanced Performance For SFTI Network


ICE announced several enhancements to its Secure Financial Transaction Infrastructure network (SFTI), which will offer customers additional capacity, performance and flexibility, while reducing the complexity associated with connecting to multiple market venues.


CME Reopens Online Trading Platform After Technical Glitch

Luc Cohen – Reuters

CME Direct reopened four hours after it was shut on Monday due to a technical issue. The outage came as CME migrated many users of its EOS Trader platform over to CME Direct, and also coincided with an upgrade to CME Direct’s technology.


First Derivatives Secures Contract With NSE

Maria Nikolova – LeapRate

First Derivatives secured a contract with the National SE (NSE) to provide an algo testing environment, based on its kdb+ software platform.

PLY: Good win for the company from the North of Ireland.


FinTech Sandbox & CME Offer Historical Market Data to Spur Innovation Among FinTech Startups


PLY: Good idea.


TMX Atrium Introduces Cross-Border Wireless Connectivity Solution



HKEx To Roll Out Three More London Metal Mini Futures On 14 December 2015



HKEx Introduces 3-month Free Trial Market Data Promotion Programme



SGX: MSCI Singapore Index Futures Contract Starts Trading In Smaller Size & Finer Ticks



NetOTC Launches Bilateral Platform For Non-Cleared OTC Derivatives Ahead Of Schedule


Career Paths

NetOTC, a provider of innovative risk solutions, appointed Roger Liddell (previously CEO LCH Clearnet 2006-2011). Liddell was appointed a NetOTC NED in 2013 and has been closely involved with the firm since 2011.

EBRD named Sergei Guriev as its new Chief Economist.

European Issuers Secretary General Susannah Haan is stepping down after 5 ½ years, handing over to Florence Bindelle.

PLY: I wish Susannah every success in the future, it has been a pleasure to work with her while wishing Florence a productive tenure as the EU (presuming it survives) hopes to roll out a cohesive Capital Markets Union.

The General Assembly of Europex confirmed the current Chairman, Massimo Ricci (Chairman & CEO of GME), in his role for another two years.

Five additional Board members were elected for the 2016-­‐2017 term: Ireneusz Łazor (President of the Management Board of TGE) and Pieter Schuurs (President & COO at ICE Endex) were re­- elected while Egbert Laege (CEO of Powernext), Mikael Lundin (CEO of Nord Pool Spot) & Pedro J. Mejía Gómez (Chairman & CEO of OMIE & OMIP) will join as new Board members of Europex.

Three of the four current Heads of the Working Groups have been confirmed for a second term: Frederick Bernthaler (Head of Legal at CEGH) for the Working Group Gas Markets, Borut Rajer (Director of Operations at Borzen) for the Working Group Environmental Markets and Daniel Wragge (Head of Political & Regulatory Affairs at EEX) for the Working Group Financial Markets, Integrity and Transparency. As of the beginning of next year, the Working Group Power Markets will be headed by Rickard Nilsson (Senior Adviser Innovation and Market Design at Nord Pool Spot).

Traders Magazine reports that Barclays has named Richard Evans, previously its COO for equities in EMEA, as its new head of equities business in the region. Before joining Barclays in 2012 he was head of Delta One strategies in European equities at Morgan Stanley.

Quayle Munro appointed David Worlock as a Senior Adviser.

Ex-NYSE Manager Drops Suit Claiming Firing Over ‘Daily Show’

Robert Burnson – Bloomberg

Todd Wilemon, a former NYSE MD who said he was wrongly fired for participating in a mock news interview on “The Daily Show” dismissed his lawsuit against ICE.

PLY: Even by the often eccentric HR within the former NYSE Euronext, this was an odd parable for the entity now being organised under the ICE banner.

Financial Calendar

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

IBKR Vice Chairman Earl H. Nemser sold 2,586 shares on Friday, October 30th at $41.41(bargain $107,086.26).

Analyst Notes

Argus Research Downgrades ICE To “Hold” From “Buy” Rating

TMX Price Target Lowered By CIBC From C$61.00 To C$58.50 – “Sector Performer” Rating

ICAP Price Target Lifted By Numis Securities From GBX 370 To GBX 420 – “Hold” Rating

Barclays Restated “Outperform” Rating On ICAP – GBX 500 Target Price

Canaccord Genuity Reaffirmed “Sell” Rating On ICAP – GBX 350 ($5.40) Target Price

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


Seedrs Launches US Site As Lawmakers Finally Legalise Equity Crowdfunding

Rebecca Burn-Callander – Daily Telegraph

Seedrs has created a test version of its US site, which will be open to “accredited investors” for the next 180 days until the new rules take effect.


NZ – John Bolton’s Squirrel Money Goes Live With ‘First Real P2P Lending Service’


Other stories

China Communist Party Proposes Yuan Convertibility By 2020

Fion Li – Bloomberg

QV EI Premium: China Capital Markets Transformation Brief – Main File.


Financial Stability Board (FSB): New Measures To Promote Resolvability, Including Effective Cross-Border Resolution



SEC: “Market Structure Enforcement: Looking Back & Forward” Speech By Andrew Ceresney, Director, Division of Enforcement – SIFMA Compliance & Legal Society New York Regional Seminar


Opening Remarks At The 21st Annual International Institute For Securities Enforcement & Market Oversight, SEC Chairman Mary Jo White, Nov. 2, 2015



The International Regulatory Agenda On CCP Links – Speech By Benoît Cœuré, ECB Executive Board Member, ESRB Workshop On CCP Interoperability Arrangements, 2 November 2015


PLY: Frankly an odd speech which strikes me as demonstrating a certain lack of subject matter understanding of the issues, and, the whole business of CCP. Take this as just one example: “CCP interoperability allows financial entities to access centrally cleared markets across the EU and to transact with multiple counterparties without bearing the costs of joining multiple CCPs.”

Mixing up clearing house usage, and membership, doesn’t fill me full of confidence. I mean that’s as elementary as mixing up spot and front months…which brings us full circle in today’s daily newsletter of the exchange industry.


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