November 18 2014

elb2

Aequitas receives regulatory green light as FTIL Sells Bourse Africa and PSE bond exchange merger is delayed again.

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Public Markets

FTIL Sells Bourse Africa For $40.5 mn
Business Standard

FTIL announced it was selling Bourse Africa (first rumoured last week), Mauritius, together with its wholly owned subsidiary, Bourse Africa Clear, to Continental Africa Holdings, Mauritius, for $40.5 million. The entire transaction will be completed in 210 days.

Bourse Africa offers trading in commodities, equities and currencies. With this deal, it will be the fourth exchange and in the fifth company sold by FTIL in 10 months, raising Rs 2,900 crore (USD 469 mln) in all. It sold SMX in February for Rs 931 crore (USD 150.5 mln), then National Bulk Handling Corporation, a collateral management company, for Rs 242 crore (USD 39.1 mln). In July, it exited MCX, raising Rs 900 crore (USD 145.5 mln). Earlier this month, it entered into an agreement to sell Indian Energy Exchange for Rs 577 crore USD 93.3 mln).

It still has stake in MCX- SX (now mSXI), DGCX and Bahrain Financial Exchange.

PSE-PDS Merger Pushed Back Anew To 2015
Fil C. Sionil – Manila Bulletin

The much-vaunted merger between the Philippine SE (PSE) and the Philippine Dealing Systems Holdings Corp. (PDS) may have to be pushed back to 2015 instead of this year as board approval of the other significant owners have yet to be obtained.

Although, the Bankers Association of the Philippines (BAP) has already “signed” the agreement to sell its holdings in PDS while SGX has yet to obtain a board approval for the disposition of its ownership.

BAP and SGX combined own 45% of PDS. PSE, for now, owns 20% of PDS.

HKEx’s Li Says Derivatives, IPOs To Be Part Of Through Train In Months
Reuters

HKEx CEO Charles Li said it would take months, not years, before IPOs and derivatives are made a part of a landmark scheme linking Hong Kong and the Shanghai stock exchanges that kicked off on Monday.

In an exclusive interview with Reuters, Li also said it was a matter of time before the Shenzhen stock exchange, a smaller bourse in China, will also be linked up with Hong Kong.

Trading Rules A Problem For Shanghai-Hong Kong Connect Scheme (subscription)
Enoch Yiu – South China Morning Post

Many issues still exist to discourage international investors from entering the mainland market because many trading and settlement rules in the country are different from those overseas.

One issue is the 30% foreign ownership limit to ban total foreign ownership of a mainland company.

Nasdaq Names 14 Stocks To Test Lower Fee & Rebate Program
Reuters

Nasdaq on Monday named 14 stocks that will take part in the exchange operator’s program (first reported here) to test the effects of lowering its exchange fees and rebates, beginning on Feb. 2 and lasting at least four months.

ICAP’s EBS To Launch Anonymous Liquidity Pool
Finextra

EBS, ICAP’s market-leading electronic FX business will launch EBS Select, an anonymous, segmented, bilateral liquidity pool.

Private Markets

New Aequitas Stock Exchange Gets Green Light From Regulator
Dana Flavelle & Madhavi Acharya-Tom Yew – The Star

Aequitas Innovations Inc., backed by a group of market investors and Canada’s largest bank, can begin operating by March 2015 (application was filed in June this year), the Ontario Securities Commission said in a recognition order issued Monday.

Last month TMX announced the restructuring of its equities trading, installing “speed bumps” to slow HFT trading ahead of the planned Aequitas launch. EI reported on June 4th that Aequitas selected MillenniumIT to power the market.

Thailand Set To Merge TFEX & AFET
Asia First

A state official in Thailand has revealed a plan to merge the Thailand Futures Exchange (TFEX) and the Agricultural Futures Exchange of Thailand (AFET) by July 2015. SET manages TFEX while the Commerce Ministry supervises the AFET. AFET, which requires a budget of around USD6m a year, has never recorded a profit as investors remain worried about trading on futures products.

Liquidnet Forced To Seek New Clearer (subscription)
Tim Cave – Financial News

Liquidnet is one of the firms that has been impacted by JP Morgan’s decision to close its broker-dealer clearing business, forcing the operator to look for an alternative post-trade provider.

PLY: As mentioned last week, my three year term as a director of Liquidnet Europe has come to an end. It was an great experience with an amazing business and I wish Seth and the team every future success.

Can BSE Challenge MCX’s Monopoly In Commodities Trading?
Mobis Philipose – Livemint

Will BSE’s plan to enter the commodity segment bear much fruit?

EI reported last month that the BSE board approved a proposal to start a new platform for commodities trading.

BSE, NSE Eye Setting Up Small Banks
Times of India

Bombay SE (BSE) and the National SE (NSE) are looking to set up small banks in the country once the Reserve Bank of India opens the window for applications.

The move will help the two exchanges, which have cash transactions running into thousands of crores, manage some of the funds, but will come as bad news for the existing players, such as HDFC Bank, which manage this amount and benefit by way of low cost of funds.

CFTC Commissioner Wetjen Says Agency Has Authority Over Bitcoin Price Manipulation (subscription)
Michael J. Casey – Wall Street Journal

CFTC Commissioner Mark P. Wetjen said Monday that the agency was authorized to intervene with enforcement actions against price manipulation in bitcoin markets.

“It has not been tested, but I do believe we have the authority because if you think of any reasonable reading of our statute, bitcoin classifies as a commodity,” said Wetjen during a panel discussion at a seminar on the digital currency organized by Bloomberg in New York. “This gives us the authority to bring enforcement against any type of manipulation.” He added that the CFTC statute’s definition of a commodity is very broad.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat and FTIL bounces on the welcome Bourse Africa sale.

NSEL Scam: Supreme Court Refuses To Hear Bail Cancellation Plea
The Economic Times

The Supreme Court refused to hear a plea seeking cancellation of bail granted to Jignesh Shah, prime accused in the NSEL scam case.

A bench headed by Justice Pinaki Chandra Ghose did not entertain the petition filed by a group of investors on the ground that it had no locus to challenge the Bombay High Court order granting bail to Shah in the case.

Bombay High Court Refuses To Stay FMC Order On FTIL
Khushboo Narayan – Livemint

The Bombay high court on Monday refused to grant an interim stay on a 17 December order of FMC that declared FTIL unfit to run exchanges. The court was hearing a plea filed by FTIL seeking temporary relief.

Technology

BATS Revokes Self-Help Against NYSE
Everett Rosenfeld – CNBC

BATS BYX and BZX exchanges briefly declared self-help against NYSE on Monday.

Thomson Reuters Expands Elektron Footprint
Finextra

Products

ICE Futures Europe Announces Launch Of Two (Refined) Energy Contracts Dec 1
MondoVisione

Gulf Coast Unl 87 Gasoline Prompt Pipeline (Platts) vs RBOB Gasoline 1st Line Future
Gulf Coast Unl 87 Gasoline Prompt Pipeline (Platts) vs RBOB Gasoline 1st Line Balmo Future
ICE Clear Europe Circular

Career Paths

Tullett Prebon announced the appointment of Carrie Heiss as Global Head of Human Resources with immediate effect. Ms. Heiss, who will report directly to the CEO, John Phizackerley, joins the firm’s Global Executive Committee.

Ms. Heiss has over 25 years’ experience in Human Resources including career development, training, compensation, diversity and culture change. Previously, she was Senior MD, Global Head of Human Resources at Newedge.

DGCX – Passing Of Former CEO Gary Anderson
MondoVisione

DGCX confirms with deep sadness that the Exchange’s former CEO Gary Anderson passed away on the 13th November in London. Gary had been fighting cancer for the last few months and had stepped down as CEO in October. In the two years that he served as CEO of DGCX, his vision, passion and leadership made a huge difference to the development of the Exchange’s business and all of the team.

PLY: As reported last Friday, a sad moment for our industry as a good man and excellent CEO has passed away.

Financial Calendar

This week

ICAP H1 financial results
Record date Thomson Reuters $0.33 quarterly dividend
MarketAxess $0.16 quarterly cash dividend payment
Record date TMX $0.40 Q4 dividend

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

Share Notes

Interactive Brokers CFO Paul Jonathan Brody sold 5,037 shares Friday, November 14th at an average price of $26.96 (bargain $135,797.52). Mr. Brody’s regular sales are chronicled on this specific page.

Crowdfunding

LendingClub, With Plans To Go Public, Also Seeks A Buyer
Luisa Beltran – PE HUB

LendingClub Corp., which is backed by investors including Kleiner Perkins Caufield & Byers, is pursuing a dual track process.

The P2P lending company filed to go public in August but is also seeking a buyer. Goldman Sachs, who is an underwriter on the IPO, is advising on the sale, one of the sources said.

San Francisco-based LendingClub provides a marketplace that connects borrowers and lenders. Since its launch in 2007, the lender has facilitated more than $5 billion in loans. The company provided $98 million in revenue in 2013 while adjusted EBITDA was $15.2 million, regulatory filings said.

Zopa Opens Its Loan Book For Data Analysis
Finextra

P2P lending pioneer, Zopa, has announced that it has made available its full loan book in a partnership with AltFi Data.

Other stories

IOSCO Consults On Post-Trade Transparency In The Credit Default Swaps Market
MondoVisione

IOSCO published the consultation report Post-Trade Transparency in the Credit Default Swaps Market, which seeks to analyze the potential impact of mandatory post-trade transparency in the CDS market.

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