November 28 2014



A remarkably fascinating day despite the US being transfixed with turkey…

Public Markets

ASX Completes Investment In Yieldbroker

A proposal for ASX to acquire a 49% shareholding in Yieldbroker for a total of $65 million was announced on 18 September 2014. The investment makes ASX a shareholder in Yieldbroker alongside ANZ, CBA, Citi, Deutsche Bank, J.P. Morgan, Macquarie, NAB, Royal Bank of Canada, Royal Bank of Scotland, Toronto Dominion, UBS and Westpac, who will remain equal shareholders.

ASX’s 49% stake is non-controlling and Yieldbroker remains independently managed.

PLY: A whiff of desperation pervades the antipodean monopolist’s attempt to curry bank favour and rescue its increasingly moribund clearing venture which has amply demonstrated that when the market is given a choice, it opts against lack of choice. Funny that.

FTIL’s Warrants Sale Hangs In Balance
Palak Shah – The Economic Times

FTIL recently announced that it had sold the warrants that it held in the MCX SX to a group of investors led by investor Rakesh Jhunjhunwalla. However, in August, MCX SX had cancelled FTIL’s 56.25 crore (USD 9.08 mln) warrants and transferred the non-refundable deposits against it to reserves. This boosted the exchanges’ net worth to Rs 160 crore (USD 25.8 mln) and saved it from hassle as regulatory requirement says it has to maintain Rs 100 crore (USD 16.1 mln) net worth at all the time.

A source close to Jhunjhunwalla group said it was a calculated risk they had taken. The belief is that new investors fit the bill on ‘fit and proper’ and all other criteria and the court will allow them to convert their warrants into equity. FTIL has requested MCX-SX to register the transfer of its warrants.

PLY: Question of the day is which Greek letter captures the risk position of warrants that may have expired on a corporate governance/ regulatory basis?

LSE Expects CSD Green Light By Christmas (subscription)
Chris Hall – Financial News

LSE expects to receive final regulatory approval for its Luxembourg-based CSD by Christmas, ahead of new European regulations promoting the use of the post-trade facilities.

LSE’s CSD, which has been named globeSettle, has received regulatory approval to operate as a Professional of the Luxembourg Financial Sector, and concluded discussions with the Banque Centrale de Luxembourg on its application as a securities settlement system in October.

LSE now expects final approval from the Eurosystem – consisting the ECB and all national central banks in the eurozone – before the Christmas break.

CME Clearing Europe selected globeSettle as collateral location venue while in June, LCH.Clearnet and CC&G chose globeSettle.

PLY: Watch the CSD space…

LCG Chairman Charles-Henri Sabet Personally Buys 1% Of The Company
Andrew Saks-McLeod – LeapRate

London Capital Group (LCG) has been the subject of a much-needed rejuvenation under the steerage of new chairman Charles-Henri Sabet, following his £17 million investment in the company which had spent a prolonged period of time in dire straits.

Mr. Sabet has placed even further confidence in the company by personally purchasing 1% of LCG’s corporate stock, amounting to an investment of £227,500 at current value.

Earlier this month EI reported that LCG has drafted in a series of new key personnel: Dr Charles Poncet, Dimitri Goulandris and Julien Cohen assuming their positions as NEDs.

EI reported on October 6th that Gavin Foster, Head of FX & Director at London Capital Group, left the company. Other recent exits include CEO Kevin Ashby and COO John Jones.

PLY: Hmm such trumpeting of publicity worries me – just how bad was the situation that this release is made to look like such incredible news? Good luck to Mr Sabet with his restructuring but he might like to consider pr tone….

Clearing Looks Ahead To New Dawn (subscription)
Luke Jeffs – FOW

PLY: Can’t open this, presumably a “he says she says” in FOW house style.

JPX Said Planning Not to Expand Tick-Size Cut
Anna Kitanaka & Toshiro Hasegawa – Bloomberg

JPX will probably decide against cutting trading increments for more listed companies.

NZX To Provide Analyst Coverage (subscription)
Philip Stafford – Financial Times

NZX plans to overcome a dearth of corporate research for smaller companies by including independent coverage as part of the services provided to users of its new junior market.

The Pacific exchange plans to appoint the UK’s Edison Investment Research as the main corporate research provider for its upcoming NXT market for fast-growing companies.

PLY: In other news the corporate socialists of the EU continue to push for totalitarian analytical procedures that will squeeze the life out of SME stocks.

EU Regulatory Concerns Curb China Stock Link Volumes
Michelle Price & Saikat Chatterjee – Reuters

Concerns by Europe’s top funds watchdog that a landmark Hong Kong-China trading link may not adequately protect investors are preventing thousands of funds from buying Shanghai stocks.

PLY: Gosh we we went at least a day without some lazy scaremongering story. For those without perspective, recall that we doubted we would see direct Chinese access in our lifetimes at the start of the year access and have it already. ..

Fears Of Delay To Shenzhen Link
Jennifer Li – The Standard

Hong Kong’s plans to link up with the Shenzhen SE may be delayed due to the huge imbalance between northbound and southbound trading of the Stock Connect, according to an equities analyst.

Just over 25% of the northbound daily quota was used yesterday while mainland investors used only 2.03% of their daily allocation, though this was the highest percentage during the past five days.

New Zealand’s Financial Markets Authority: Phase Two Of Financial Markets Law Completes Long-Term Overhaul

PLY: We are already over regulated…I doubt any of this helps.

Canadian Securities Regulators Propose Harmonized Approach To Clearing Agency Requirements

The Canadian Securities Administrators (CSA) published for comment Proposed National Instrument 24-102 Clearing Agency Requirements, which adopts international standards for Canadian financial market infrastructures (FMIs). The comment period closes on February 10, 2015.

Private Markets

NSE Lowers Charges For Currency Futures, Equity Option Trades
The Economic Times

ISE Reduces Clearing Fees In The Irish Market By 50%

PLY: Brilliant news for clients of the Irish exchange.

Shanghai SE To Allow Investors To Buy IPOs Using Margin Accounts

PLY: Hmmmm.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Stocks flat, creditors of NSEL upset in Twitter because I want justice not the dismembering of the precepts of corporate governance.

Bombay HC Orders Status Quo On NSEL-FTIL Merger
Sharleen D’Souza – Business Standard

The high court on Thursday ordered status quo on the draft order from the Union ministry of corporate affairs for a merger of scam-hit NSEL with parent entity FTIL.


Three-Hour Foul-Up Halts France’s CAC 40, Holland’s AEX
Will Hadfield – Bloomberg

Defining Algos In Futures Markets
Yuriy Shrterk – Traders Magazine


LCH.Clearnet IRS Fall In Value (subscription)
Philip Stafford – Financial Times

LCH.Clearnet will this year report the first ever fall in the value of the IRS it clears for the world’s big investment banks as new global capital rules designed to reduce the leverage in markets begin to bite.

The UK clearing house said on Thursday it expected its SwapClear business to have processed swaps worth a notional $400tn by the end of the year. That is compared with $426tn it was risk managing at the start of the year, it added.

LCH.Clearnet Ltd announcement here.

Euronext To Launch Dairy Derivatives In 2015
Valerie Parent – Reuters

Euronext will launch a range of dairy futures and options next year, betting the abolition of EU milk production quotas will spur demand for hedging and pricing tools in the industry.

Euronext will offer derivatives for butter, skimmed milk powder and whey powder, with the launch scheduled for the spring, it said on Thursday.

Euronext press release here.

PLY: I am still in Brussels today, a beautiful city with a dysfunctional EU carbuncle but at least dropping milk quotas would be great for consumers and markets.

HKEx To Launch Thermal Coal Contract Early Next Year
Coal Guru

Shanghai Futures Exchange: Notification On Reducing The Transaction Fees For Copper Contracts

Career Paths

FOW reports that Gary Pettit, the former global head of financial futures and options at Icap, is set to become the highest-profile appointment at ED&F Man, the British broker that has been hiring aggressively this year.

Euronext announced that Pascal Canfin will be the chairman of the Expert Committee of the Low Carbon 100 Europe Index.

Waters Technology reports that Tobias Sproehnle has joined Thomson Reuters in London as global head of benchmark services to head the vendor’s global fixings business, responsible for administering more than 70 global benchmark indexes. He is ex -Markit.

Financial Calendar


Record date CBOE $0.21 quarterly dividend

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


P2P Lending In Poland A Portrait Of
Krystyna Mitręga-Niestrój – Wiseclerk

Other stories

FESE: The Winners Of The 2nd European Small And Mid-Cap Awards

On the evening of 26th November, FESE and European Issuers co-hosted a prestigious awards ceremony to celebrate the winners of the 2nd European Small and Mid-cap Awards.

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