November 21 2013


Typical! Put a tech subsidiary up for sale and it promptly has glitches in customer installations. Not good for NYSE Tech, frustrating for ICE shareholders, unlikely to maintain sympathy for the troubled tech business as yesterday’s Qatar shutdown is today’s Mexican mess. Meanwhile, CME Chairman correctly worried about hacking, SEFs and various noises of Mou Mou, suggesting exchanges chiefs remain a cattle-sheep hybrid when it comes to wasting time on nebulous co-operation. LME developments include Yuan products while the new FESE board looks interesting with several capable fresh faces and of course, as we led yesterday, the elevation of the excellent Dr Katz as President. Orc results and a new trade reporting service…

Not such a frantic day so less scrolling but you still cannot afford to avoid today’s key stories:

Public Markets

Interim Report Orc Group Holding AB Jan 1–Sep 30 ,2013

Operating revenue for the period from July to September 2013 reached SEK 105 mln (USD 15.76 mln) (previous SEK 127 mln) , a decrease of 17%. Adjusted EBITDA was SEK 54 mln (USD 8.1 mln) (previous SEK 60 mln) 10% decrease.

PLY: Disappointing numbers from Orc as they continue to restructure following the sale of CameronTec and NeoNet. Hopefully they can find their innovative mojo in the near future…

NYSE Component Led To Five-Hour Mexican Trading Halt

Mexico’s five-hour stock trading stoppage on Tuesday was caused partly by a connection failure with a component bought from a unit of NYSE Euronext, said Luis Tellez, CEO of the country’s exchange.

The exchange had to halt transactions from 8:54 a.m. to 1:52 p.m. Mexico City time Tuesday…

“What the Bolsa has developed hasn’t caused failures,” Tellez said. “It’s the auxiliary pieces that we have purchased.”

PLY: After the Qatar fallover this week, it has not been a good one for shareholder value – let alone the customers! – at NYSE’s technology subsidiary.

CME CEO: Hacking Is A Problem For Everyone

CME Chairman Terry Duffy: “this isn’t just a CME problem this is everyone’s problem, whether you are an exchange, a bank or somebody else.”

Duffy went on to say that, “operational risk is one thing that always concerns me” and that “we are going to continue to spend money on this to make sure our systems and clients are safe.”

Where The SEF Battle Can Be Won And Lost
Futures and Options Intelligence

PLY: Fog of war means no clear understanding of who may be ultimate winners yet.

LME Clear Connects With DTCC To Provide Trade Reporting Service

PLY: LME achieves EMIR compliance through this partnership with DTCC for ETD and OTC trading.

MCX And Dalian Commodity Exchange Sign MoU
Commodities Now

MCX, India’s top commodity bourse, and the People’s Republic of China-based Dalian Commodity Exchange (DCE), have signed a MoU to boost strategic co-operation.

PLY: Blah Blah, we will be nice to each other, information exchange, key co-operation, enjoy pleasant lunches, gain frequent flyer miles, so as is usual for exchange MOUs there is nothing of consequence here, move along please…

Saudi SE (Tadawul) And Abu Dhabi SE (ADX) Sign MoU

Saudi SE (Tadawul) and Abu Dhabi SE (ADX) have today signed an MoU, which will serve to augment the already robust bilateral relationship between the two exchanges.

PLY: Ditto.

GFI Group To Provide Credit Suisse & UBS Sponsored Access Functionality For IRS

Credit Suisse and UBS, will be utilizing the sponsored access functionality of GFI’s SEF for interest rate swaps, allowing dealer banks to connect their existing customer execution platforms to RatesMatch, the GFI SEF. As well as acting as agents, UBS will also stream prices into RatesMatch Central Limit Order Book.

Private Markets

Nairobi SE – Plans To Borrow And Lend Shares Mooted

Investors at the NSE could starting next year lend and borrow shares from each other subject to change of the current regulatory framework.

Virtual-Currency Craze Spawns Bitcoin Wannabes (subscription)
The Wall Street Journal

Private investor: “I think this is a point in history that will never be repeated.”

A “cryptocurrency” craze has spawned more than 80 entrants, from peercoin and namecoin, to worldcoin and hobonickels. In October and November alone, developers launched gridcoin, fireflycoin and zeuscoin. Bbqcoin has enjoyed a renaissance after a false start in 2012. Litecoin, launched in 2011, has turned into the strongest bitcoin alternative.

PLY: Not sure why it took so long but at last the rise of cryptocurrency which was much discussed years ago (e.g. a certain now vintage tome “Capital Market Revolution!” – wonder whatever happened to the Patrick L Young who wrote that?). This is the first phase of cryptocurrency’s rise – it could be a big blow off bubble top but the revolution will happen, the infrastructure is taking root.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX is off 2% while FTIL is down nearly 1% as the FMC tightens scrutiny and investors try to get their hands on the SMX fund flow.

FMC Tightens Scrutiny On MCX

FMC requests new board to review all contracts and agreements, and financial and other commitments it has made since 1 April.

NSEL Investors Lay Claim To FTIL’s SMX funds
The Economic Times

PLY: Investors seek to prevent FTIL paying off foreign debt from the SMX sale and have the money diverted to the NSEL bailout fund.

HC Extends Interim Anticipatory Bail Of NSEL’s North-Ind Head
Business Standard

The Bombay High Court today extended till November 27 the interim anticipatory bail granted to Manish Pandey, North India head of NSEL.


LME To Introduce Yuan-Priced Contracts

LME plans to introduce yuan-based contracts that would be cleared and settled in the Chinese currency and is planning iron ore and thermal coal contracts for the Asian region.

India – NSE Extends Cross Margins To ETFs
Business Standard

NSE has extended cross margining to index-based ETFs. So far, the facility was available only in the equity stocks, index futures and stock futures segments.

Career paths

Christian Katz New President Of FESE

See also this announcement

SIX Swiss Exchange CEO Christian Katz, has become the first Swiss national to be elected president by the General Assembly of FESE in a unanimous vote at the AGM yesterday.

In addition, on 20th November 2013, the FESE General Assembly appointed Martin Reck, MD in charge of cash markets at Deutsche Boerse and Mark MacGann, Senior VP, Head of Government Affairs and Public Advocacy at NYSE Euronext as the new FESE Vice Presidents.

Following the decision of the FESE General Assembly on 20th November 2013, the FESE Board is composed by:

Christian Katz from SIX Swiss Exchange (President)
BME represented by Ramón Adarraga
CEE Stock Exchange Group represented by Michael Buhl
Deutsche Börse AG represented by Stefan Mai and Martin Reck (Vice‐President)
Irish Stock Exchange represented by Deirdre Somers
London Metal Exchange represented by Nick Ong‐Seng
Luxembourg Stock Exchange represented by Robert Scharfe
NASDAQ OMX represented by Magnus Billing
NYSE Euronext represented by Roland Bellegarde and Mark MacGann (Vice‐President)
Oslo Børs represented by Bente Landsnes
Warsaw Stock Exchange represented by Adam Maciejewski


FESE President Hans‐Ole Jochumsen retires (NASDAQ OMX now represented on board by Magnus Billing);
FESE Vice President Deirdre Somers, CEO, Irish Stock Exchange reverts to being a board member.

Outgoing members:

Socrates Lazaridis, Athens Exchange;
Nondas Metaxas, Cyprus Stock Exchange;
Rainer Riess, having left Deutsche Bӧrse, has been replaced by Martin Reck (also elevated to VP)
Diarmuid O’Hegarty, is leaving LME hence Nick Ong-Seng takes his place

Other new members are:

Luxembourg Stock Exchange represented by Robert Scharfe
Oslo Børs represented by Bente Landsnes
Warsaw Stock Exchange represented by Adam Maciejewski

Members of the FESE General Assembly confirmed the appointment of Secretary General Judith Hardt as Director General, following the change of the FESE statutes.

PLY: Once again congratulations to Christian Katz who brings huge value to FESE and makes an excellent choice as President. Good to see the strategic thinker Martin Reck as a VP and congratulations to my fellow countryman Mark MacGann on his VP elevation. I am pleased to see Deirdre Somers remaining on board after her successful VP term while the capable Magnus Billing joins the board as former Hans-Ole Jochumsen departs as NASDAQ OMX’s representative following his successful Presidential term. LME maintains representation, Luxembourg joins and perhaps the most exciting newcomer is Adam Maciejewski CEO of Warsaw SE whose position on the board cements the good work done by Piotr Borowski on the Management Committee which itself will continue to be chaired by the highly capable Ian Cornwall of Swx. Finally a fond farewell from the board to FESE stalwart Nondas Metaxas of Cyprus.

The FESE team does excellent work with a modest budget. Under Christian Katz the outlook is highly encouraging as the EU battles to complete its large regulatory review before the end of the Commission next spring. Congratulations to our favourite Secretary General, on her elevation to being our favourite Director General, well done Judith Hardt. There are huge challenges ahead for legacy exchanges in Europe and only via a strong forward looking FESE can the industry’s potential be achieved.

Algomi, the provider of information-matching solutions to optimise fixed income liquidity, has appointed Stefano Vaccino as Sales Manager to join the expanding European Sales team.

SEC announced the appointment of Julie K. Lutz as director of the Denver Regional Office, where she will oversee enforcement and examinations in a seven-state region.

Financial Calendar


MarketAxess Q3 $0.13 dividend payment
Record date Thomson Reuters for $0.325 Q3 dividend


Record date MCX Rs. 7 interim dividend
Record date TMX $0.40 dividend

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

Share Notes

CME Director C Odom II sold 1,532 shares Tuesday, November 19th at an average price of $80.03 (bargain $122,605.96). He now owns 8,503 shares.

Charles Schwab EVP Bernard Clark sold 53,221 shares Monday, November 18th at an average price of $24.51 (bargain $1,304,446.71). He now owns 5,647 shares.

Analyst Notes

Jefferies Group Reiterated A “Buy” Rating On ICE, Raised The Price Target From $215.00 To $235.00
Interactive Brokers “Neutral” Rating Reaffirmed By Zacks – $25.00 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.


Crowdfunding Platform For Video Creators “TubeStart” Partners With “Fullscreen”
Crowdfund Insider

With over 3 Billion Monthly views, 15,000 YouTube Channels, 200 Million Subscribers and 25,000 creators – Fullscreen is a YouTube network powerhouse. Fullscreen has now announced multiple partnerships for their “Sign In With Fullscreen” feature which integrates an ecosystem of third party applications including the innovate video crowdfunding platform TubeStart.

TubeStart, which officially launched this past August, is a platform dedicated to aid in the monetization of YouTube videos. Pending the final regulations by the SEC in regards to Title III or “retail” crowdfunding, the company intends on providing royalty based crowdfunding for videos allowing backers to participate in the success of their favorite YouTube channels.

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