November 24 2014

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MOEX and CME Europe trade repository sign mutually beneficial deal ensuring EMIR compliance. Meanwhile will South America to go hostile? BM&F Bovespa counters the MiLa movement with a stake buying plan across the region. TNT raises some money, ASX CEO has been in situ for 3 years – still believes his CCP will succeed. Senator Levin to meet LME over warehouses as elsewhere finally FMC set up warehouse regulations for India as data issues extend beyond exchanges to even the decentralised forex business and upstarts threaten the status quo…

Public Markets

BM&FBovespa Eyes Stakes In Latin American Rivals (subscription)
Samantha Pearson – Financial Times

BM&FBovespa is planning to buy up to 15% of every significant stock exchange operator in Latin America in its boldest move yet to assert its influence in the region.

The São Paulo-based exchange operator hired two banks last month to acquire large enough stakes in the national exchanges of Mexico, Colombia, Chile, Peru and Argentina to ensure a seat on the board of each, BM&FBovespa’s CEO Edemir Pinto told FT.

PLY: With Mexico joining MiLa, that alliance doubles overnight, presumably prompting BM&F Bovespa into action. $50-60 million is being budgeted to deliver BM&F Bovespa a portfolio: with a board seat the target in each.

Tullett Prebon To Raise GBP32.1 Million In Placing For PVM Deal
Sam Unsted – Alliance News

Tullett Prebon expects to complete the acquisition of leading independent oil broker, PVM Oil Associates Ltd this week and will launch a share placing to cover part of the deal consideration. Tullett will issue a total of 25.8 million shares to cover the USD 112 million payable on the deal. It will issue 12.8 million shares to shareholders of PVM Oil and will issue another 13 million shares to institutional investors. The investor placing will be priced at 248 pence per share (circa 20p discount to the current price) to raise GBP 32.1 million and will be issued November 26th.

ASX Boss Bullish About Clearing Despite Slow Start
Andrew White – The Australian

ASX has handled clearing for just $200 billion of the $78 trillion in OTC derivatives contracts since launching its service in January, after regulators refused to mandate local market rules for the contracts used by banks to manage their loan books. In an interview for The Deal magazine to mark 3 years running the ASX, Mr Funke Kupper said it was “too early to make that call’’ that the market had been lost to its giant international rival, LCH Clearnet.

Levin Says Will Meet CFTC To Discuss Scope Of LME Oversight
Reuters

U.S. Senator Carl Levin’s comments came at the end of a two-day hearing of his Permanent Subcommittee on Investigations on Wall Street’s influence over commodities and the release of the subcommittee’s report, which accused Goldman Sachs and its metals storage business of manipulating the aluminum market.

MoEx Subsidiary Partners With CME To Make Good On EMIR Requirements
George Tchetvertakov – Forex Magnates

National Settlement Depository (NSD), a subsidiary of MoEx, and CME European Trade Repository Limited (ETR), have agreed to collaborate in allowing Russian clients to provide EMIR compliant information about their OTC cross-border transactions. The cooperation is likely to streamline client transaction reporting and make cross-border trading in Russian securities more transparent.

Announcement here.

PLY: A healthy cooperation between MOEX and the CME ETR which is run by the experienced, visionary Danny Corrigan who used to live in Moscow some years ago. A sensible deal for both parties.

NSD Launches New Electronic Matching Services
MondoVisione

PLY: Another modest granular improvement in the excellent Moscow Exchange.

FMC Prescribes Stringent Norms For Warehouse Service Providers To Exchanges
Business Standard

The first set of rules to be applied to the sector will be applicable to all WSPs accredited by commodity exchanges. FMC has fixed a minimum net worth of Rs 25 crore (USD 4.05 mln) for companies providing such services. For single commodity or single location warehouse service companies, it will have to be at least Rs 10 crore (USD 1.6 mln).

Private Markets

Thailand, Indonesia, Malaysia Plan Rubber Exchange
George Joseph – Business Standard

Thailand, Indonesia and Malaysia will set up a regional rubber exchange to bolster the commodity’s trading activities. The International Tripartite Rubber Council (ITRC) meeting, held on Thursday in Kuala Lumpur, decided to make the exchange operational in 18 months after a joint feasibility study carried out by Global agriculture consultancy LMC International.

BSE Opens New Investor Service Centre
The Hindu

New Delhi added to the network of BSE centres.

Silicon Valley Wants To Cut You Out Of IPO Profits
David Weidner – Market Watch

PLY: Seth Merrin visited silicon valley to pitch the Liquidnet private shares initiative which is one of several such attempts to inject liquidity and transparency into the marketplace for non-public companies.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX is off 1.5% and FTIL off nearly 1%…

MCX Crisis Is Not Over Yet, Cautions Singhal
Tomojit Basu – The Hindu Business Line

PK Singhal, the recently-appointed Joint MD of MCX, who helped stabilise the exchange which was hit by a payments crisis in one of its associated institutions, NSEL, says the crisis is not over yet.

PLY: Singhal, a former Executive Director at FMC is clearly stating the obvious here and understandably so. Right now, the NSEL crisis remains almost entirely unresolved, hence our continuation of this section which believe me we would love to kill but so long as the process festers this object lesson in how not to run markets remains part of Exchange Invest daily!

Technology

Vienna SE & Zagreb SE To Cooperate In Data Vending
MondoVisione

Start-up Platforms Squeeze Data Fees (subscription)
Joel Clark – Financial News

Start-up trading platforms such as ParFX and LMAX Exchange have undercut the big incumbent players, Thomson Reuters and EBS, citing the provision of low-cost or free market data as one of their unique selling points.

PLY: For once no exchange is culpable here but clearly this is pure “Innovator’s Dilemma” territory: the upstarts (as predicted in a book called “Capital Market Revolution!” in 1999 – whoever wrote that…) will deploy data cheap (eventually free) and the incumbents (vendors / exchanges) will find a key revenue source squeezed…

Products

CME Announces the Launch of New Iron Ore Futures Contract
CME

CME announced the launch of trading and clearing services for the Iron Ore 58% Fe, Low Alumina, CFR China (TSI) Futures contract. Pending CFTC review, this new cash-settled futures contract will be listed on CME Globex and the NYMEX trading floor, and will be available for clearing on CME ClearPort for trade date 8 December 2014. This contract will be listed with and subject to the rules and regulations of NYMEX.

Nasdaq Bets On ETFs Joining Hong Kong-Shanghai Stock Link
Eduard Gismatullin – Bloomberg

Nasdaq OMX is betting that Chinese authorities will let investors buy ETFs over the new link between Hong Kong and Shanghai.

Nasdaq OMX is partnering with fund managers in Hong Kong as it prepares for a future phase of the link to include ETFs. BMO Global Asset Management (Asia) Ltd., debuted two Hong Kong-listed ETFs that track Nasdaq indexes on Nov. 13.

ISE Says Fáilte To Active ETFs (subscription)
Chris Flood – Financial Times

The ISE will allow active managers to keep their trading strategies hidden after dropping its requirement for the daily disclosure of the portfolio constituents of actively managed ETFs.

PLY: Alas I really don’t feel comfortable in this opaque territory, it feels to me as if the ETF business has abandoned one of its core principles.

Career Paths

WSJ reports that Chris Ferreri, head of e-commerce in the Americas for brokerage ICAP is leaving.

MCX Hunts For A New MD Again
Rajesh Bhayani – Business Standard

MCX has invited fresh applications for the post of MD, which has been lying vacant since Manoj Vaish left the organisation in May. Earlier, MCX had invited applications for the post and 20 candidates were shortlisted but interviews could not be held. The BoD decided to call for fresh applications considering the entry of the new stakeholder. The exchange has several open positions including the post of CTO and director (operations). It is also looking to fill these positions. MCX is saving an annualised Rs 6 crore till these posts are filled.

FIA announced the election of two new members to its BoD: Tom Kadlec, president of ADM Investor Services, and George Simonetti, MD and head of Markets Clearing and Futures Execution in Wells Fargo Securities’ Markets Division.

Financial Calendar

This week

Record date BGC Partners $0.12 quarterly dividend
Record date CBOE $0.21 quarterly dividend

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

Share Notes

Charles Schwab major shareholder Charles R. Schwab sold 1,000,000 shares Thursday, November 20th at an average price of $28.51 (bargain $28,510,000.00). He now owns 675,480 shares. Mr. Schwab’s regular sales are chronicled on this specific page.

Crowdfunding

P2P Lender RateSetter Hits £400M Milestone
Samantha Hurst – Crowdfund Insider

PLY: Well done: half a billion Pounds is within sight, half a billion Euros has already been achieved…

Other stories

HKEx CEO Charles Li – Latest Charles Li Direct: Taking stock & Looking Forward
MondoVisione

PLY: A man often on the defensive in recent months, Charles Li has many reasons to feel pleased with the achievement of the “Through Train” – there is much work to be done in the future but the detractors throw stones at their peril – the link exists and that is something nobody expected at the start of this year.

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