November 13 2014

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The MondoVisione Exchange Forum was a brilliant day of concentrated content and it was my pleasure to Chair such a smooth and promptly timed event. Thanks to Herbie Skeete and his fantastic team for such a great conference.

Good results dominate the headlines today led by LSE but there are interesting asides in TR and swaps amongst other issues.

Finally, my three year non-executive term at Liquidnet Europe is coming to an end & I am attending my final board meeting today. It has been a pleasure to participate and I hope the business will build on its recent fabulous progress in Europe and prosper across the world.

Public Markets

LSEG H1 Interim Results
LSEG

Revenue up 18% to £592.6 million (H1 FY 2014: £504.2 million); Adjusted operating profit up 24% at £286.1 million (H1 FY 2014: £229.9 million); up 21% on organic and constant currency basis; operating profit of £172.3 million (H1 FY 2014: £151.0 million).

Markit Q3 2014 Financial Results
Markit

Revenue increased by $31.3 million, or 13.1% from Q3 2013, to $269.7 million. Adjusted EBITDA grew 14.5% to $126.8 million from Q3 2013 with an Adjusted EBITDA margin of 47.3%.

FTIL Q2 Profit At Rs.327 Crore (USD 53.15 Mln)
Ashish Rukhaiyar – Livemint

FTIL has reported a standalone net profit of Rs.327 crore (USD 53.15 mln) for Q3 versus Rs.27 crore (USD 4.31 mln) in Q2.

FTIL press release here.

BGC Issues Letter To GFI Shareholders – Clarifies Tender Offer Terms, Largely In Response To GFI Board Request – BGC’S $5.25 Per Share All-Cash Offer Is Clearly Superior To The Proposed CME Transaction
MondoVisione

BGC Partners is amending the terms of its previously announced $5.25 per share all-cash tender offer to acquire all of the outstanding shares of GFI Group it does not currently own. BGC, through its affiliate BGC Partners, currently owns approximately 13.4% of GFI’s outstanding shares.

EI reported on November 5th that BGC Partners’ unsolicited tender offer was rejected by GFI Group after CME agreed to buy GFI in July.

Bank Scandal Sparks CFTC Outrage, Aggression
CNBC
Statement Of CFTC Chairman Tim Massad On The Forex Enforcement Announcement
MondoVisione

In the wake of a massive settlement, CFTC chairman Timothy Massad suggested on CNBC’s “Closing Bell” that his agency needs more resources to ensure similar events don’t happen again.

On Wednesday, CFTC and other regulators fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the FX market.

CFTC Head Defends Agency From Idea Of Merging
MarketWatch

PLY: No story as a result of SEC chairman White making a poor joke.

End Of Gold Fix Heralds Shift For London (subscription)
Henry Sanderson – Financial Times

This month London’s prized bullion benchmark, or fix, was handed to ICE to run electronically from early next year.

That came hot on the heels of CME taking control of the 117-year silver fix and LME taking over the administration of the benchmarks for palladium and platinum.

CFTC To Look Into Disclosure Of Indentities Of Swap Counterparties (subscription)
Katy Burne – Wall Street Journal

Timothy Massad, chairman of CFTC, on Wednesday told an industry conference the agency would look into the practice known as “name give-up,” in which traders’ identities are disclosed during post-trade processing, when they were intended to remain anonymous.

The need to preserve anonymity “is an issue we’re looking at and thinking about.”

Remarks Of CFTC Chairman, Timothy G. Massad, Before The Swaps Execution Facilities Conference (SEFCON V)
MondoVisione
Statement From Commissioner J. Christopher Giancarlo: Reconsidering The CFTC’s Swaps Trading Rules For Greater Effectiveness In The Global Economy
MondoVisione

Private Markets

IFCI Plans Selling Stakes In NSE
The Economic Times

IFCI is planning to sell its stake in three companies, including National SE (NSE).

The board has already given in-principle approval for sale of 2.5% stake in NSE, IFCI MD Malay Mukherjee said.

Last month EI reported that IFCI postponed the divestment due to lower-than-expected bids from investors. Malay Mukherjee confirmed the company has received three bids for its 2.5% stake in NSE and the process was expected to be concluded by September 30.

Virtu Financial Joins Eris Exchange As Liquidity Provider
Eris Exchange

Eris Exchange announced that leading global electronic market maker, Virtu Financial, is streaming liquidity into Eris SwapBook and will be offering two-way voice markets for off-exchange trades for Eris Swap Futures.

Dividend News

LSEG declared an interim dividend of 9.7 pence per share, an increase of 4.3% on the interim dividend paid last year, adjusted for the Rights Issue in September. The interim dividend will be paid on 6 January 2015 to shareholders on the register on 5 December 2014.

Special Section: FTI, NSEL, India at the Crossroads

MCX and FTIL flat.

Minority Shareholders Oppose NSEL Merger With FTIL
The Economic Times

Some minority shareholders of FTIL have raised objections to the proposed forced merger of NSEL with the company.

Technology

Bloomberg Says Swaps Trading Platform Experiences One-Hour Outage
Reuters

Trading on Bloomberg’s SEF experienced an outage for just under an hour from 9 a.m. EST (1400 GMT) because of problems with formatting data for CDS.

Nasdaq To Provide SMARTS Broker Technology To Kyte Group Limited
Nasdaq

Nasdaq is providing SMARTS Broker technology to The Kyte Group Limited, an independent FCM,

TABB Group, Thomson Reuters Reveal Technology Costs & Opportunities For Capital Markets Firms
BobsGuide

A new report from TABB Group, commissioned by Thomson Reuters, has found that capital markets firms can be spending up to $460,000 per front office employee on technology related costs every year. Even when averaged out across a firm’s departments, this figure can be as much as $122,000.

Bitcoin 2.0 Firm Counterparty Adopts Ethereum’s Software (subscription)
Michael J. Casey & Paul Vigna – Wall Street Journal

Counterparty, a service that uses bitcoin’s core blockchain ledger to provide decentralized trading platforms for digital assets, is now allowing its users to tap the software capabilities of one its major “Bitcoin 2.0″ competitors, Ethereum.

Products

EEX Expands Trade Registration For Freight Contracts
Reuters

European Energy Exchange (EEX) from January plans to offer trade registration for 11 dry bulk freight contracts listed on its subsidiary, Singapore-based Cleartrade Exchange (CLTX).

Germany-based EEX, (reported January) bought a 52% stake in CLTX, which focuses on shipping products.

Traiana Expands TR Connect Regulatory Offering
ICAP

Industry Divided As Regulators Mull NDF Clearing
Euromoney

European proposals for mandatory clearing of non-deliverable forwards (NDFs) published in October seemed to be a decisive step toward a new framework for FX derivatives trading. However, responses to the consultation reveal deep divisions among FX market participants over the way forward.

Previous discussions here and here.

Indexes

BM&FBOVESPA, S&P Dow Jones Indices Reach Landmark Index Agreement
PRNewswire

Signed MoU to create and launch new, co-branded equity indices for the Brazilian marketplace to be calculated, published & marketed globally by S&P DJI.

Career Paths

Amman SE‘s BoD decided on its meeting -held on Wednesday, 22/10/2014 appointing Mr. Nader Azar, as CEO of the ASE as of 29.10.2014.

Markit | Genpact KYC Services announced the appointment of Jon May as CEO. He joins Markit | Genpact KYC Services from Goldman Sachs where he was a MD and global head of client onboarding as well as head of Securities Operations and Operations Data Quality Management in India. Jon May will join Markit | Genpact KYC Services in January 2015, based in London.

Bank of England Fires Chief FX Dealer
Jamie McGeever & William Schomberg – Reuters

Bank of England has fired its chief FX dealer after an investigation criticised his handling of suspicious market practices, the BoE said on Wednesday.

The review commissioned by the oversight committee and chaired by Lord Grabiner detailed communications, including emails and telephone call transcripts, between Martin Mallett and FX market participants going as far back as 2006.

ISE Employees Cry Foul On Severance Packages
Sneha Padiyath – Business Standard

Disgruntled employees of the Inter-connected SE (ISE) have approached the regulator, Sebi, in an attempt to secure an adequate compensation package before the closure of the exchange.

Financial Calendar

Today

Tullett Prebon 5.6p interim dividend payment

Tomorrow

SIBEX Q3 results
MCX Q2 2014 Financial Results

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

Share Notes

Interactive Brokers Chairman Earl H. Nemser sold 4,100 shares Monday, November 10th at an average price of $26.95 (bargain $110,495.00). Mr. Nemser’s regular sales are chronicled on this specific page.

Charles Schwab major shareholder Charles R. Schwab unloaded 500,000 shares Wednesday, November 12th an average price of $28.90 (bargain $14,450,000.00). Mr. Nemser’s regular sales are chronicled on this specific page.

Analyst Notes

Evercore Partners Downgraded CBOE From “Hold” To “Sell” – $55.00 Target Price
Betfair Upgraded By Goodbody Stockbrokers To “Buy” – GBX 1,450 Target Price

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.

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