November 13 2015

The MondoVisione Exchange Forum was well worth it for those who witnessed any of the very interesting panels as well as the multiple useful keynotes. A good single day concentrated conference and it was my pleasure to chair the event for the second year of my term. Thanks to Herbie, and all the team for their diligence in presenting such a good event.

Moreover I have a new white paper out, download now if you are interested in moving “Towards A Real Time World Market” – I call it the move to “Zero Hour.” Feedback welcome…

Let’s get to Friday’s EI News to conclude a frantic week:

Public Markets

BM&FBOVESPA Q3 2015 Results
BM&FBOVESPA

vs. Q3 2014: net revenues R$ 598.3 mln (USD 158.7 mln), up 9.9%, net income ex-CME impacts* R$ 393.3 mln (USD 104.3 mln), up 65%, adjusted net income R$ 457 mln (USD 121.2 mln), up 27.9%. (full report here)

* Excluding net gain from the partial divestment in CME (1% of the total CME Shares, 4% remaining investment) (reported here) and the net impact from the discontinuity of the equity method of accounting for the remaining investment in CME.

PLY: Given the innate economic problems of Brazil, these numbers strike me as rather favourable!

FIS Q3 Revenue Dips By 2%, Investors’ Concerns Over Sungard Purchase
IBS Intelligence

FIS’s Q3 2015 revenue $1.6 billion, down 2%. QV Premium: SunGard IPO Preps & Final Deal Brief.

Philadelphia Financial Reported Increased Interest in ITG
Sally Goff – Financial Magazin

Activist Investors Seek Changes To ITG Board (subscription)
Sarah Krouse & Bradley Hope – Wall Street Journal

Philadelphia Financial Management and Voce Capital Management had increased their combined stake in ITG to 8.6%. Activist investors are pushing for changes to the board of ITG, including the ouster of its Chairwoman, Maureen O’Hara, after the brokerage firm paid $20.3 million to settle allegations of wrongdoing related to its “dark pool”. The investors are seeking to replace board members who served on the panel when it greenlighted the pilot trading program involved in the regulatory settlement.

QV Premium: Exchange Deals Brief.

PSE Raises PDS Stake To 61% Pending SEC Okay
Manila Times

Philippine SE (PSE) acquired 8% (500,000 shares) in PDS of minority shareholder Whistler Technologies Services on Wednesday, for a sum of P147.204 mln (USD 3.12 mln).

This so far brings the PSE’s total stake in PDS to 61%, pending regulatory approval from SEC.

Wednesday’s transaction was PSE’s second share purchase deal with a minority PDS stockholder, after it acquired last month the 3.08-% stake in PDS of Finex Research and Development Foundation for P69.39 mln (USD 1.47 mln). QV Premium: PSE – PDEx Merger Brief.

City Insider: ICAP Sells Brokers — But Hangs On To Bordeaux (subscription)
Harriet Agnew – Financial Times

QV Premium: Exchange Deals Brief 2.

NYSE Goes From Fan To Critic of IEX, Bashes `Unfair’ Plan
Annie Massa – Bloomberg

NYSE Challenges Fairness Of ‘Flash Boys’ Exchange (subscription)
Bradley Hope – Wall Street Journal

NYSE said in a comment letter (read it here) to SEC on Thursday that the proposed rules of IEX failed to explain in detail how the exchange would operate. It also said the group’s signature feature—a speed bump to slow down high-speed traders—might end up giving some traders an advantage over others.

“Like the ‘non-fat-yoghurt shop on Seinfeld, which actually serves tastier, full-fat-yoghurt to increase its sales, IEX advertises that it is ‘A Fair, Simple Transparent Market,’ whereas it proposes rules that would make IEX an unfair, complex and opaque exchange,” NYSE said in its letter.

FAO: Earlier this week Citadel blasted IEX’s exchange plan, while Virtu Financial expressed its support to regulators for IEX (reported here). See here what our publisher, Patrick L Young, has to say about IEX’s plan.

PLY: Post MV Exchange Forum, I have a frantic day in London so will check in about IEX next week, there is quite a lot to digest.

Foreign Investors Warn China E-Trading Proposal Could Sink Stock Connect
Michelle Price & Saikat Chatterjee – Reuters

Draft rules to curb high-speed trading blamed for China’s summer stock market crash could kill off billions of dollars of investment into China, global banks and investors have told Chinese regulators in a letter. QV Premium: China Capital Markets Transformation Brief – Main File, HKEx – SSE – Stock Connect Brief Part 3.

Lobbyists & Lawyers Warn Over Delay To Mifid II (subscription)
James Rundle & Bernard Goyder – Financial News

PLY: MIFID remains a dog’s dinner nobody seeks to defend. Dump the whole sorry mess & let’s save some implementation workflow from the ultimate Swiss cheese of pointless EU regulation.

Bursa Malaysia Derivatives & Dalian Commodity Exchange Sign Collaboration Agreement On Product R & D
MondoVisione

Private Markets

Aequitas Unveils Plan To Launch New Fund Trading Platform
Euan Rocha – Reuters

Aequitas Innovations unveiled a plan to launch a new platform that will enable some actively managed mutual funds to be traded and settled with the same ease as publicly listed stocks and ETFs. The plan (reported last week) will let investment advisers in Canada trade so-called Platform Traded Funds (PTFs) that were first launched by Invesco Canada last month.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX down 2%, FTIL down 3%. Indian PM Modi is in London.

Products

NYSE Aims To Flag ‘Aberrant’ ETF Prices (subscription)
Leslie Josephs – Wall Street Journal

TFX To Enter Margin Utility Business (subscription)
Viren Vaghela – Risk

Tokyo Financial Exchange (TFX) is establishing a unit to offer margin calculation and collateral services for small and medium-sized banks in Japan that are affected by incoming rules on margining for uncleared swaps. The company is the latest entity globally to go public with its ambitions in this area.

World’s First First Indian Fixed Income ETF To Be Launched On LSE
MondoVisione

Indexes

FTSE TMX & SBI To Launch FTSE SBI India Bond Index
Siasat Daily

Career Paths

CME extended its employment agreement with Executive Chairman & President Terry Duffy through December 31, 2020 and with CEO Phupinder Gill through December 31, 2019.

Duffy, has served as Executive Chairman & President of CME since 2012, Executive Chairman since 2006 and Chairman since 2002. Gill, 55, who has been with the company since 1988, has served as CEO since 2012.

ITG appointed Bryan Blake as CEO of TriAct Canada Marketplace.

Reuters reports that Russell Investments appointed Andrew Rankin as an implementation portfolio manager to its transition management team in EMEA.

Reuters reports that Saudi SE’s (Tadawul’s) CEO Adel bin Saleh al-Ghamdi had resigned his position, which he had held since July 2013. Khalid al-Hussan will become acting CEO.

SEC named Olivier Girod as Deputy Director of the Office of Support Operations (OSO) and Marc Wyatt as Director of the agency’s Office of Compliance Inspections and Examinations (OCIE) and leader of its National Exam Program.

HK Securities and Futures Commission (SFC) welcomed the appointment by the Financial Secretary of Mr Lester Garson Huang and the re-appointment of Ms Mary Ma Xuezheng as NEDs for a term of two years with effect from 15 November 2015. Ms. Ma was first appointed as a NED on 15 November 2013, while Mr. Lee has been a member of the Board since 2009. His current term expires on 14 November 2015.

Financial Calendar

Next week

17.11 – ICE Singapore Launch

18.11 – MarketAxess $0.20 quarterly cash dividend payment

19.11 – SEC annual Government-Business Forum on Small Business Capital Formation

19.11 – Record date Thomson Reuters $0.335 quarterly dividend

20.11 – Record date TMX $0.40 dividend

20.11 – Record date BGC Partners $0.14 dividend

20.11 – Record date ITG $0.07 quarterly dividend

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

Analyst Notes

ICAP “Equal Weight” Rating Reiterated by Barclays – GBX 500 Price Objective

ICAP “Underwt/In-Line” Rating Reissued By Morgan Stanley – GBX 460 Price Objective

Bank of America Reissued “Neutral” Rating On ICAP GBX 500 Price Objective

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