October 02 2014

elb2

PLY: Chris Concannon to be President of BATS? SGX control only deregulated energy market’s platform in the region while Goldman leads the bid to be the trusted chat platform instead of Bloomberg – at least on the sell side. ICAP bids for London Gold Fix as Reddit launches cryptocurrency distributed to active contributors. NSEL settlements looming? Various regulatory chats and of course much more in today’s free Exchange Invest daily:

Public Markets

SGX Buys Remaining 51% Stake In Electricity Market Operator EMC
Channel NewsAsia

SGX on Oct 1st acquired the remaining 51% stake in the operator of the island’s national electricity mark, having bought 49% of Energy Market Co (EMC), the operator of the National Electricity Market of Singapore (NEMS) in August 2012.

SGX press release here.

PLY: NEMS created the first liberalised S-E Asian electricity market. This purchase adds to the optionality of SGX.

Goldman Chat Room A Message To Wall St (subscription)
Tracy Alloway & Camilla Hall – Financial Times

On Wednesday, Goldman and 13 other Wall Street stalwarts including JPMorgan Chase, Morgan Stanley and BlackRock officially unveiled the new chat platform and company, known as Symphony Communication Services which may be developed for financial functions beyond just messaging.

The 14 firms bought (rumoured yesterday) Perzo, a Palo Alto-based technology start-up founded by former Thomson Reuters executive David Gurle, in order to create Symphony.

Individual breakdowns of the firms’ investment in Perzo were not disclosed. The collective total comes to $66m and each investor will get a seat on Symphony’s board, giving them control over the new technology company.

Symphony Communication Services Holdings – press release here.

FAO: In the bigger picture:

TR & Markit – announced here that the directory for the open messaging network powered by Markit’s Collaboration Services has been fully integrated with Eikon Messenger – reported.

ICE agreed to to buy SuperDerivatives – reported here

Cyber security start-up Wickr, is in talks with banks and major financial services companies including Markit to create an alternative to Bloomberg instant messaging; it has raised $30 mln from investors including CME to help develop messaging technology – reported here and here.

PLY: Clearly the banks are wreaking revenge on Bloomberg for past confidentiality transgressions while the modernisation of technology is a welcome addition. However will this buy side initiative prove popular with the sell side, and indeed how long before the regulators start probing for anti trust?

Broker ICAP Enters Race To Replace Century-Old Gold Fix
Clara Denina – Reuters

ICAP will submit a proposal to run the London Gold fix.

FAO: CME and TR are seen as favorites to manage London gold fix, after they recently won the rights to manage the daily silver fix. 15 companies have expressed interest to run the London gold benchmark, as reported here.

KDPW_CCP: Negotiated Securities Lending System Has Launched
MondoVisione

The negotiated securities lending and borrowing system organised by KDPW_CCP in co-operation with KDPW has launched on 1 October 2014.

Caught Up In The Regulatory Crossfire (subscription)
Anish Puaar – Financial News

The once unglamorous world of post-trade services is undergoing a regulatory makeover, with policy-makers across the world putting processes that were traditionally an afterthought at the centre of post-crisis reforms.

For Thomas Zeeb, CEO of Six Securities Services, the Swiss clearing, settlement, custody and securities financing provider, adapting to the challenges and making the most of new commercial opportunities is arguably a tougher task.

Self-Regulatory Organizations File CAT NMS Plan With The SEC
PRNewswire

The US national securities exchanges and FINRA, collectively, the self-regulatory organizations, or SROs, today filed with SEC a national market system (NMS) plan to govern the creation, maintenance and implementation of the Consolidated Audit Trail (CAT) and Central Repository, meeting the SEC deadline.

Additional information, including the planned timeline for the CAT NMS Plan is available at www.catnmsplan.com.

ESMA Defines Products, Counterparties & Starting Dates For The Clearing Of IRSs
MondoVisione

ESMA has issued final draft regulatory technical standards (RTS) for the central clearing of IRS which it is required to develop under EMIR. The RTS define those types of IRS contracts which will have to be centrally cleared, the types of counterparties covered by the obligation and the dates by which central clearing of IRS will become mandatory for them.

DB1 Joins The UN’s “Sustainable Stock Exchanges Initiative”
MondoVisione

DB1 has joined the United Nations’ Sustainable Stock Exchanges initiative (SSE). The aim of the initiative, founded by the UN Secretary-General in 2009, is to increase exchange-listed companies’ transparency and commitment to environmental, social and corporate governance issues and to make the capital market more aware of these issues.

Private Markets

Shorter Settlement Cycle From 6 October – Oslo Børs VPS Introduces T+2 With Effect From 6 October
MondoVisione

SEBI Grants Recognition To Clearing Corpns Of BSE, NSE, MCX-SX, For A Year
The Hindu Business Line

SEBI has granted recognition to the clearing corporations of BSE (ICCL), MCX-SX (MCX-SX CCL) and NSE (NSCCL) for one year commencing October 3, 2014, subject to conditions.

All three clearing corporations have been directed to take immediate steps to rectify the deficiencies pointed out in the systems audit done by SEBI.

Now, An Anonymous Platform For Tip-Offs On Market Manipulation
Sachin P Mampatta – Business Standard

To check wrongdoing in markets, National SE (NSE) has put in place an anonymous whistle-blower mechanism, similar to the Dodd-Frank Whistleblower Programme in the US.

NCDEX Forward Trading Opens New Revenue Stream For Members
Suresh P Iyengar – The Hindu Business Line

Forward contracts launched on NCDEX have opened a revenue stream of revenue to the exchange’s 800 existing members, given free membership in the forward trade segment.

Trading volume in the futures market has more than halved in the last one year, largely due to the imposition of the commodity transaction tax and a sharp fall in most commodity prices besides the problems arising out of NSEL default.

Reddit To Give Bitcoin-Style Currency To Users
Sky News

Post a $50 million dollar refunding, Reddit will create a share backed cryptocurrency which will be distributed to the most active users, representing some 10% of the round’s proceeds.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX is flat while FTIL is off nearly 3% amidst some welcome suggestions the recovery process is gaining pace:

Recovery Process Gathers Momentum At NSEL
Sharleen D’Souza – Business Standard

A court has directed a competent authority to sell Metkore Alloys’s ferrochrome stocks worth over Rs 95 crore (USD 15.4 mln) and deposit the proceeds in an escrow account to cover its debts to NSEL.

Technology

TABB Group Says Significant Portion Of Global Capital Markets Trading Activity Now Found In Only 10 Datacenters
MondoVisione

PLY: The cluster personified…although sooner or later capacity constraints must give way to issues of favouritism in terms of racking proximity to servers…or else somebody will be putting together an awful lot of “equalising” cable. Then again it’s not so different to the old idea of front row booths on the floor but I think digital markets can always do better than the analogue for fairness in this regard, no?

Products

ICE Completes First Phase of Liffe Transition; London Soft Commodities Now on ICE Platform alongside ICE Futures U.S. Softs Contracts
ICE

These products are now listed on the ICE trading platform, which is also home to the ICE Futures U.S. soft commodity futures and options that include Sugar 11, Cocoa, Coffee, Cotton and Frozen Concentrated Orange Juice contracts. For the first time, global soft commodities contracts are available for trading side by side on the same platform.

CME Faces Questions Over Pending Swaptions Service (subscription)
Tom Osborn – Risk

The interest rate swaptions market – bifurcated and largely illiquid – will not be easy to drag into clearing houses, although the benefits could be huge. CME hopes to launch a service, but dealers are viewing it with caution.

Abu Dhabi Bourse Aims For Debt Trading Market With Govt Bond Listing
Gulf Business

Press release here.

ESMA Consults On Draft Standards For The Clearing Of NDF Forex
MondoVisione

ESMA has published a consultation on draft regulatory technical standards (RTS) it has to develop under EMIR for the clearing of foreign-exchange non-deliverable forwards.

Indexes

FTSE & Research Affiliates Debut FTSE RAFI Low Volatility Index Series
MondoVisione

Provides fundamental weighting to low volatility securities with indices cover Global, Developed, and Emerging markets and over $59 billion now tracking FTSE RAFI benchmarks.

Moscow Exchange: Revised MICEX10 Index Constituent List To Come Into Force
MondoVisione

Career Paths

BATS Eyes Concannon, Marques For Exchange President
Reuters

BATS Global Markets has narrowed its search for a new president to two industry executives with close ties to the No. 2 U.S. stock market operator, three sources familiar with the situation said on Wednesday.

Chris Concannon, president and COO of trading firm Virtu Financial, and Jose Marques, global head of electronic trading at Deutsche Bank, are the front-runners for the position, the sources said. Neither candidate, however, is guaranteed to take the job and others remain in the mix, one of the sources said.

Lou Eccleston: The Data-Driven Emergence Of TMX’s New CEO
Boyd Erman – The Globe and Mail

There were a lot of names bandied about as the likely next head of Toronto SE owner TMX.

Lou Eccleston was not one of them.

After months of speculation about who would be named the next occupant of the wood-paneled office of the TMX CEO, the announcement of an American executive with little name recognition in Canada was a surprise. It left traders and market users casting about for information on the man who will run the company at the heart of of Canada’s most important financial markets.

WSJ reported that the European Parliament’s economic and monetary affairs committee put off a decision on Wednesday on whether to endorse Jonathan Hill, the former leader of the U.K. House of Lords, as the EU’s next financial-regulation commissioner.

The committee plans to invite Mr. Hill back for a second session with lawmakers, likely early next week, said Sven Giegold, a delegate for the German Greens. Party representatives couldn’t agree on his nomination amid questions over his EU support and his previous work as a lobbyist.

PLY: The danger here is the way the likes of the Greens or other regressive groupings will seek to lump a UK Conservative into the anti-EU camp as a means to ensure the socialist protectionist collective EU continues to fail.

Financial Calendar

This week

ICE $0.65 Q3 dividend payment

New announcement

SGX Q1 FY2015 Financial Results – 21 October 2014
NASDAQ OMX Q3 2014 Financial Results – Friday, October 24, 2014 – Press release here.
BGC Partners Q3 2014 Financial Results – Thursday, October 30, 2014 – Press Release here.
CME Q3 2014 Financial Results – Thursday, October 30, 2014 – Press Release here
CBOE Q3 2014 Financial Results – Friday, October 31, 2014 – Press Release here.

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

Analyst Notes

LSE “Outperform” Rating Restated By RBC Capital – GBX 2,150 ($34.93) Price Target

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

French Crowdfunding Laws To Change
Out-Law

An order inserted into the French Monetary and Financial Code and a Decree will come into force today and will regulate intermediaries in participative financing (IPF), or those who engage in crowdfunding, an effort to reduce legal confusion around the activity.

Other stories

IOSCO Launches Second Securities Markets Risk Outlook
MondoVisione

IOSCO published the IOSCO Securities Markets Risk Outlook 2014-2015. The Outlook is a forward-looking report focusing narrowly on issues relevant to securities markets and whether these may be, or could become, a threat to the financial system as a whole.

ESMA Publishes 2015 Work Programme
MondoVisione

ESMA has published its 2015 Work Programme which sets out its planned activities, budget and staffing levels for the coming year.

After Seven Years New York Knocks London From The Top Of The Global Financial Centres Index
MondoVisione

The Z/Yen Group has published the fifteenth Global Financial Centres Index (GFCI 15), sponsored by the Qatar Financial Centre Authority. The top 10 centres of 83 in total are shown to the right, the full report is available here.

PLY: I always enjoy interaction with my good friends at Z/Yen but have to admit that a bi-annual survey strikes me as a bit much, do things really change that much?

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