November 19 2015

The weekday rule aka if the west is working, Barclays gets fined which I posited yesterday seems to be already more reliable than I had imagined. How many fines does it take until we all have to have a ‘last look’ at Barclays I wonder?

Public Markets

Playtech Acquisition of Plus500 Conditional On FCA Approval By Year End
Victor Golovchenko – Finance Magnates

Playtech Expects A decision From FCA On Plus500 Deal In Dec
Reuters

After the Central Bank of Ireland’s hiccup on AvaTrade deal, Playtech faces delays with the FCA that could put the Plus500 deal on halt.

PLY: The aftermath for Plus500 if the Playtech deal would not go through is likely to be, hypervolatile…

QV Premium: Exchange Deals Brief.

SEC Proposes Rules To Enhance Transparency & Oversight of ATSs
SEC

Dark Pools Would Have To Shed Light On Conflicts Under SEC Rule
David Michaels – Bloomberg

Barclays To Pay $150 Mln More To NYDFS In Forex Probe
Suzanne Barlyn – Reuters

Barclays Accused Of Abusing ‘Last Look’ Trading System (subscription)
Martin Arnold & Katie Martin – Financial Times

The instruction to Barclays traders and IT staff in June 2011 was clear: If clients asked why large numbers of their foreign exchange trades were being rejected at the last minute, they should “just obfuscate and stonewall”.

It was one of many such instances cited by the New York Department of Financial Services (DFS) in its press release announcing a $150m penalty for Barclays for allegedly using its automated forex trading system to reject client orders that would have been unprofitable for the bank. The abuses are said to have gone on from 2009 to 2014.

PLY: Which raises issues methinks over certain staff…well a vast clutch of staff who were at Barclays FX division during this 5 year period?

CME: Political Clout Counts (subscription)
Gregory Meyer – Financial Times

Mr Duffy’s blunt manner and deep understanding of Washington politics have helped CME emerge from the financial crisis as one of the most lucrative US businesses. “I’ve been blessed to know a lot of interesting people and become friends with them. I think they like my no-nonsense attitude. I don’t bulls… people,” he says.

China’s Yuan Dreams Pit Germans Against Rest of Exchange World
Will Hadfield & John Detrixhe – Bloomberg

DB1 flips the switch on CEINEX, the first dedicated renminbi-denominated trading venue outside mainland China. The platform will give overseas investors access to about 200 securities consisting of bonds and ETFs.

“China has, and always will be, this holy grail of opportunity,” said Andy Nybo, a partner at Tabb Group.

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

Brokers In Push For Mutual Funds To Be Added On HKEx Platform (subscription)
Enoch Yiu – SCMP

Brokers have urged HKEx to launch a trading platform targeted at listed mutual fund products.

The Role Of Open Access In Clearing (subscription)
Martin Pluves (CEO, LCH.Clearnet) – FOW

Open access is more than a matter of regulatory policy.

PLY: Certainly, risk is a good place to start, long before we get to the egregious case of how stock markets without foresight are endeavouring to push regulations to suit their commercial ends…

QV Premium: Homer Simpson & The Supermodel Buffet – aka a Guide to Clearing in the New Era,Sometimes You Need A Plumber, Open Clearing: A Paradismal Shift By LCH, LCH Opens Swingers Club.

Malfunction Risk For European Repo Market (subscription)
Philip Stafford – Financial Times

An ICMA study released on Wednesday, warned the market was being transformed by legislation on an unprecedented scale and may not function as well as it had previously.

Esma Makes Case For Mifid II Delay (subscription)
James Rundle – Financial News

Esma has outlined why it believes a delay to the reform of Europe’s trading rulebook is necessary – and suggested a number of ways to postpone the reforms.

Why Will NYSE Stop Accepting Stop Orders?
Bob Pisani – CNBC

NYSE Kills ‘Land Mine’ Order Type Some Blame For August Mayhem
Annie Massa – Bloomberg

NYSE joins (reported yesterday) the Nasdaq and BATS to announce such plans.

Nasdaq Requests Comments For Shareholder Approval Rules
Nasdaq

CFTC Staff Releases Swap Dealer De Minimis Exception Preliminary Report
CFTC

Statement Of CFTC Commissioner J. Christopher Giancarlo – Swap Dealer De Minimis Exception Preliminary Report
MondoVisione

Square IPO Prices at $9 a Share, Less Than Expected (subscription)
Telis Demos & Corrie Driebusch – Wall Street Journal

Skeptical investors forced Square Inc. to sell shares in its IPO for less than the mobile payments startup had hoped, dealing another setback to the battered market for new technology-company stock.

PLY: Is this not a dose of realism for some later stage PE firms who somewhat went OTT in their approach to the growth of Square, as opposed to an indictment of the IPO environment?

Private Markets

BATS Reports Successful Launch of EDGX Options
BATS

BATS launched EDGX Options, which is based on a customer priority/pro rata allocation model. The new market launched on November 2nd and implemented a phased rollout of symbols, which was completed on November 17 th.

Asia Pacific Stock Exchange Changes Its Name To Sydney Stock Exchange
Sydney Stock Exchange

PLY: A return to a name last seen in 1987 before the unified ASX.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Flat day in India for MCX, FTIL off 1%.

Technology

Nutmeg Hit By Data Breach As Clients’ Personal Info Revealed
Justin Cash – Citywire

A glitch in the code for the company’s emailing system Nutmail for Nutmeg customers meant that 32 clients logged into their own accounts, but saw other individuals’ investment suitability reports, which included their personal details, before Nutmeg was alerted to the situation at the automated investment manager. The incident occurred when the 32 clients were placed in an incorrect group to receive messages from the Nutmail system, therefore having unintentional access to other people’s personal data.

Blockchain Revolution Butts Head With Creaky Banking Pay Systems
Matthew Leising – Bloomberg

PLY: Again raising issues in my new Zero Hour paper “Towards A Real Time World Market.”

Products

SGX To Launch SGX-Listed FX Block Futures On EBS Market
Angela Tan – Business Times

SGX has partnered EBS BrokerTec to launch SGX-listed FX block futures on EBS BrokerTec’s FX central limit order book, EBS Market, a primary venue for e-traded currencies.

In a joint release, the companies said the agreement would enable market participants to seamlessly access an enhanced liquidity pool for trading Asian Spot, NDF & Futures instruments via the EBS Market.

In latest LME Challenge, CME Plans Japan Aluminium Contract
Reuters

CME will list a 25-tonne Japan aluminium contract on its Globex electronic trading platform (release here), with trading starting on Dec. 7. Clearing will be through the ClearPort system, with contracts cash-settled against Platts’ daily assessment of the premium.

HKEx To Introduce New Stock Option Classes & Stock Futures Contracts
HKEx

BIST, ICBC Turkey Partner On Chinese Renminbi Futures
Maria Nikolova – LeapRate

Borsa Istanbul (BIST) and ICBC Turkey Invest have unveiled plans to launch USD/CNH and CNH/TRY futures contracts.

Markit Introduces Netting Synchronisation Service For Cleared OTC Derivatives
BUSINESS WIRE

ESMA Will Not Exempt The Collateralization Of Bank Guarantees For Energy Derivatives Under EMIR
ESMA

ESMA has decided not to further extend the existing grace period of three years for the non-financial firms’ use of non-collateralised bank guarantees to cover transactions in energy derivatives cleared by European CCPs. ESMA therefore reminds firms concerned that from 15 March 2016 CCPs authorised under EMIR will need to fully collateralise commercial bank guarantees used to cover transactions in derivatives relating to electricity or natural gas produced.

Career Paths

WSJ reports that Barclays named Mike Bagguley as COO of Investment Bank.

Financial Calendar

This week

19.11 – SEC Government-Business Forum on Small Business Capital Formation – agenda here.

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

New announcement

24.11 – CFTC Open Commission Meeting (more here)

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

Share Notes

ITG MD Michael Marrale sold 10,684 shares on Nov 17, 2015 at $19.96 (bargain $213,252.64).

Analyst Notes

Income Investors Should Consider DB1
Seeking Alpha

Even though it isn’t a high-dividend play, it still is attractive for income investors due to its sustainable dividend policy that may be more aggressive going forward.

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

Crowdfunding

One In Five UK Crowdfunding Investments Fail (subscription)
Claer Barrett & Naomi Rovnick – Financial Times

According to the first comprehensive study of the fast-growing sector, by AltFi Data and law firm Nabarro, one in five companies that raised money on equity crowdfunding platforms between 2011 and 2013 has since gone bust — losing investors money.

PLY: Hold on…this is actually a spectacular piece of good news! A cursory perusal of stats show that up to 45% of traditional new companies fail in this sort of time period. Thus crowdfunding businesses have already jumped to twice this survival level. That is magnificent news, pity the FT entirely missed the perspective of it all.

European Director Of Indiegogo Hinted The Company May Start Accepting Bitcoin
Lana Smiley – Cointelegraph