November 14 2013

Patrick-l-young-mergermaniaLooks like Larry Leibowitz is off to pastures new while 24 hours under new ownership hasn’t yet delivered a NYSE revolution but great things are afoot. Besides, staff need to digest those ‘get more entrepreneurial, take risks & be swift’ remarks from Atlanta which will have struck fear into the hearts of those whose career has largely involved being a decision-free zone, vesting responsibility elsewhere at all times. (As to low latency decision making – well that has long been an oxymoron in many departments q.v. the previous sentence).

MondoVisione put on a great conference yesterday under the brilliant Chairmanship of Turquoise CEO Robert Barnes who is strutting his stuff again today at a Turkish investment forum here in London. Great work as always by Herbie Skeete and team and particular thanks to Sandra Ro (CME), Steve Phillips (NASDAQ) and Murat Mazibas (Borsa Istanbul) who made excellent panelists for my Emerging Markets discussion.

Euronext/France/FTT, all manner of new products, NASDAQ sells to Erbil, MIFID bickering, LSE targets, Asia, Corzine suffers setback, is Bitcoin bubbling just as I note it is going mainstream? All this and more in today’s action packed EI, happy scrolling:

Public Markets

ICE CEO On NYSE Takeover, What’s Next
FOX Business

ICE completed its monumental takeover of NYSE Wednesday, and the CEO of the combined new company says in the long run the merger will make it easier for the average investor to participate in global markets.

“What we do is help people manage risk, and invest in great companies, and [make] great investments for retirement portfolios,” ICE CEO Jeff Sprecher told FBN’s Nicole Petallides. “We want to make that easy; we want to make it transparent. Easy in, easy out. With a lot of information. And the digital age is allowing that to happen.”

Sprecher said the first order of business will to be take a fresh look at the newly formed company and “curate what we own.”

“We have some overlaps, we’re going to work on that now. I hope to be able to announce it within the next week or two,” he said.

PLY: The verb “curate” is highly apt for many NYSE departments. The vision is exciting and hopefully NYSE staff will absorb and exploit the enormous opportunity they have under creative new management.

Transaction Tax At Odds With French Euronext Call, Perol Says
Bloomberg

Groupe BPCE Chairman Francois Perol said he sees a contradiction between French Finance Minister Pierre Moscovici’s call for support for the Paris stock exchange and Europe’s planned financial transaction tax.

PLY: Hapless Hollande the woeful French President has, er, ‘curated’ his economy all the way back into recession and another downgrade having called finance his “greatest adversary” before he won office last year. Now the boss of BPCE eloquently notes that the French finance sector is somewhat hamstrung in delivering a Euronext ownership solution given the damage inflicted on investors with swingeing taxes and particularly the socialist delusion of an FTT in France and perhaps a broader European duty too. Good point, hopefully a U turn is looming for this toxic tax.

Disagreement Over Waivers Risks Pushing MiFID Decision To 2014
The Trade

A lack of consensus over dark pools and pre-trade transparency waivers risks pushing a conclusion to the trialogue on MiFID II into the first quarter of next year.

Some MEPs are thought to have been impressed by a recent proposal by a number of influential industry groups, including Fidelity, the Investment Management Association (IMA) and London SE, which called on European regulators to adopt a similar approach to Canada and Australia, where waivers are only allowed if meaningful price improvement has been achieved.

Deutsche Boerse Settlement With U.S. Plaintiffs Effective
Reuters

Deutsche Boerse Says settlement with U.S. plaintiffs effective and U.S. court has now dismissed all direct claims

Rolet Targets Asia For LSE Growth (subscription)
Financial News

The CEO of LSE said that Asia represented a “big opportunity” for its future plans, but admitted that regulatory restrictions would limit opportunities to partnerships, rather than acquisitions.

“Asia is the focus of a lot of attention but one needs to keep in mind that many countries are shut from a regulatory standpoint. We can’t consolidate or buy assets there, but we can work in partnership, as we have done in Singapore, and we see more opportunities for developing that partnership. We also remain highly focused on the Chinese opportunity. There is a lot we can bring to that market.”

PLY: Certainly the rollcall photo of LSE executives at the SGX bell ringing recently clearly suggested the discussion was broader than the Millennium IT system being sold.

Moscow Exchange Halts Derivatives Trading For Almost An Hour
Businessweek

Moscow Exchange halted derivatives trading between 1 p.m. and 1:58 p.m. yesterday.

The stoppage, which also affected the Standard sector of the bourse’s securities market division, was due to a technical issue, according to a statement on its website.

EU Antitrust Regulators Monitoring Metals Warehousing
Reuters

EU antitrust regulators are monitoring metals warehousing, stopping short of following U.S. counterparts in conducting inquiries into access and cost problems caused by storage backlogs.

ICAP Says No Reason To Believe Its Brokers Linked To Forex Probes
Reuters

ICAP said on Wednesday it had no reason to believe any of its brokers are linked to an alleged manipulation of foreign exchange markets under investigation by financial watchdogs.

DTCC Readies European Repository
marketsmedia.com

DTCC is testing its European trade repository with 1,000 clients having received regulatory approval last week ahead of going live in February.

Counterparties using an approved trade repository will meet their derivatives reporting obligations under the European Market Infrastructure Regulation.

The DTCC’s European derivatives repository is based in London with a data centre in the Netherlands.

Judge Denies Corzine Bid to Dismiss MF Global Shareholder Suit
The Wall Street Journal

A federal judge on Tuesday shot down Jon S. Corzine’s bid to dismiss a shareholder lawsuit against him and other former MF Global Holdings Ltd. executives, saying the company told investors it was fine despite “dire signs of mounting crisis.”

In a strongly worded 105-page opinion filed in U.S. District Court in Manhattan, Judge Victor Marrero said the arguments by Mr. Corzine and the other executives amounted to a claim that “stuff happens,” or that the company’s sudden implosion was the “fateful work of supernatural forces.”

PLY: By the sounds of it a brutal judgement against Governor Corzine’s attempts to defend himself against claims from the MF Global collapse fiasco which left deep scars across the brokerage and trading landscape.

Private Markets

Bitcoin Pushes Above $400 For New Record High
MarketWatch

Bitcoin jumped to yet another all-time high on Wednesday, pushing above $400 to a record $424.95 on the trading exchange Mt. Gox.

Bitcoin: Merging With The Mainstream?
rt.com

At first glance Bitcoin appears under siege. Most days another scare story emerges. Yet behind the headlines, cryptocurrency is gaining ground.

PLY: Commentary in RT’s “Op-Edge” written by one of their columnists, Patrick L Young…

Bitcoin Couple Travels The World Using Virtual Cash
The Wall Street Journal

Life on the road with virtual travellers’ cheques…

Special Section: FTI, NSEL, India at the Crossroads

PLY: Another day at liberty for Jignesh Shah but it may not last long… MCX is up slightly while FTIL is up around 1.5% against the background of another MCX board member resignation.

Paras Ajmera Resigns From MCX Board
Livemint

Yet another director Paras Ajmera, the last nominee of promoter FTIL on the troubled commodity exchange’s board, although MCX is expected to nominate another director.

Spot Exchange Acting As NBFC Without RBI Nod, Warned Auditor In 2011
The Financial Express

The management and the board of NSEL ignored an internal audit report prepared way back in 2011, which noted that the spot exchange was acting as a non-banking finance company (NBFC) without formal approval from the Reserve Bank of India (RBI).

Cops Summon Another Defaulter In NSEL Scam
The Times of India

The city economic offences wing (EOW) of the Mumbai police on Wednesday summoned Balbir Singh Uppal, the director of Loil Overseas Foods, Loil Continental Food and Loil Health Foods, in connection with the NSEL crisis. The three companies together defaulted over Rs 703 crore (USD 111.51 mln) to NSEL.

Technology

Erbil SE Taps NASDAQ OMX’s X-Stream Trading Technology
Nasdaq OMX

NASDAQ OMX and the Erbil SE (ESX) in Kurdistan, Iraq, have signed an agreement to power the ESX with NASDAQ OMX’s X-stream trading technology.

Products

Liffe Launches 30 Year Ultra Long Gilt Futures
NYSE Euronext

Liffe will launch 30 Year Ultra Long Gilt Futures from 25th November 2013.

LME Is Committed To Looking Into Physical Contracts (subscription)
Metal Bulletin

Launching physical contracts to allow aluminium consumers to hedge their exposure to the premium will not be easy, but LME is committed to looking at them, according to the LME’s head of business development.

Indexes

NASDAQ OMX Launches Fourteen New Indexes In the NASDAQ Newfound Index Family
Nasdaq OMX

NASDAQ OMX has introduced fourteen new indexes in the NASDAQ® Newfound™ Index Family.

The NASDAQ Newfound Index Family features rules-based, quantitatively enabled investment strategies created by Newfound Research LLC and tracks specific investment strategies through the use of ETFs.

Career Paths

According to Bloomberg, Larry Leibowitz, who was the chief operating officer at the NYSE’s parent, plans to leave ICE by the end of 2013 now that the takeover of the company is complete

Betfair has hired Gary Wimbrige to serve as its new global head of ecommerce, with the former head of SkyVegas replacing Tamsin Todd in the role.

SIFMA announced it has appointed Ira D. Hammerman as EVP and General Counsel. Mr. Hammerman has served as Senior MD and General Counsel at SIFMA since 2004.

Sir Hector Sants, the head of the FSA throughout the financial crisis, has resigned from Barclays just a month after taking sick leave for stress.

Financial Calendar

Today

Moscow Exchange EGM
Sibex Sibiu SE Q3 Results

Tomorrow

Record date GFI $0.05 Q3 dividend

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

Share Notes

NASDAQ OMX SVP Ronald Hassen sold 47,620 shares Monday, November 11th at an average price of $36.02 (bargain $1,715,272.40). He now owns 77,982 shares.

Charles Schwab EVP John Clendening sold 34,558 shares Friday, November 8th an average price of $23.93 (bargain $826,972.94). He now owns 275 shares.

Analyst Notes

LSE “Buy” Rating Reaffirmed at Espirito Santo Investment Bank Research – GBX 1,718 Price Objective

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.

Crowdfunding

Here’s What General Electric’s (GE) Big Bet On Crowdfunding Looks Like
Forbes

PLY: Rewriting the three “f” rule – could it be that GE now becomes a viable partner for SMEs and start-ups seeking funding through crowdfunding?

Other stories

New Zealand’s Financial Markets Authority: Now Consulting On Standards And Conditions For New Licenses

The Financial Markets Conduct Act 2013 (the Act) introduces licensing for providers offering certain types of financial services.

Consultation: Licensing Discretionary Investment Management Service (DIMS) providers
Consultation: Licensing peer-to-peer lending services
Consultation: Licensing crowd funding
Consultation: Licensing independent trustees
Consultation: Licensing derivatives issuers
Consultation: Managed Investment Schemes (MIS) managers

For full details please see the consultation section on FMA website.

The final date for submissions is 12 December 2013.

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