October 08 2014


Robobrokers to new bourses in Namibia, a broad range of data today in your free Exchange Invest Daily, happy scrolling:

Public Markets

PSE Seals Acquisition Of BAP’s Stake In Fixed-Income Exchange
Krista Angela M. Montealegre – Interaksyon

The Bankers Association of the Philippines (BAP) has agreed to sell its stake in the operator of the country’s fixed-exchange trading platform to the Philippine SE (PSE). PSE agreed with the BAP on the indicative terms and conditions for the local bourse’s proposed purchase of the latter’s 28.9% stake in the Philippine Dealing Systems Holdings Corp (PDS).

Based on the PDS’ enterprise value of P2.25 billion (USD 50 mln), BAP’s 28.90% equity interest in the fixed-income exchange operator is estimated at P650 million (USD 14.5 mln), subject to terms and conditions to be finalized after the completion of a due diligence to be conducted by the PSE on PDS.

PLY: I think most folk had given up on this deal ever happening…well done those who doggedly stuck it out to push it over the line.

UK Court To Issue Ruling In LME/Rusal Case

A three-judge panel Wednesday will either overturn or uphold a March ruling in favour of Russian aluminium company United Company Rusal that halted a key LME warehouse reform.

EI reported on July 18th regarding LME appealing a previous British High Court ruling in the legal battle with Rusal.

Barclays Says New York ‘Dark Pool’ Suit Oversteps Legal Bounds
John McCrank – Reuters

Barclays on Tuesday urged a New York court to toss the state attorney general’s fraud case over how the bank ran its private U.S. trading venue, saying the case oversteps state securities laws and offers no proof any investors were hurt.

Barclays filed a motion in July for the case to be dismissed after they were sued by NY AG in June.

NYSE Defends Controversial “Retrograde” Self-Regulation Plan
Elliott Holley – Banking Technology

Financial market participants have criticised plans for NYSE (reported yesterday) to begin monitoring itself through its non-profit division, NYSE Regulation, describing the move as a “retrograde step” that will never work in practice. NYSE is currently monitored by FINRA, an independent organisation.

PLY: Given that the sell side lives their daily existence in a retrograde world, I suppose they might be capable of assessing glass houses to throw stones at… but this move looked pragmatically logical to me. Meanwhile I suspect industry “never work in practice” claims epitomise the very maxim ICE lives by as it makes the rest of the industry look remarkably foolish when it comes to delivering.

Nasdaq September 2014 Volumes, 3Q14 Est. Revenue Capture
Nasdaq OMX

NASDAQ OMX reported monthly volumes for September 2014, as well as quarterly volumes and estimated revenue capture for the quarter ending September 30, 2014

PLY: Florin flagged the footnote “Excludes NLX” at the bottom of this release… No matter how many butterfly nets one may own, capturing revenue in NLX is clearly a challenge as the great bleeding orifice of zero economic value continues to ooze shareholder value for absolutely no coherent reason other than…other than…er, it couldn’t just be down to ego could it?

We don’t usually publish such data of course but it was worth noting in passing NLX continues to exist, depreciating shareholder value and avoiding much that readily resembles economically viable trade so far as we can see.

Banks Rewrite Derivatives Rules To Cope With Future Crisis (subscription)
Tom Braithwaite & Tracy Alloway – Financial Times

18 bank “dealers”, ranging from Credit Suisse to Goldman Sachs, have agreed to give up the right to pull the plug on derivatives contracts with a crisis-stricken institution.

Regulators Plan Standard Stress Tests For CCPs (subscription)
Cecile Sourbes – Risk

International regulators are planning standard stress tests for clearing houses – a recommendation made in recent weeks by both BlackRock and JP Morgan – as concerns grow about the risk management and supervision of CCPs.

PLY: No bad idea – we need to ensure there is life over the waterfall lest we all end up living in the Catskills / Cotswolds or coastally, knitting our own sweaters and fishing for food.

OCC Bulletin: Proposed Rule On Margin And Capital Requirements For Covered Swap Entities: Notice Of Proposed Rulemaking

Private Markets

Bats Chi-X Europe Ups Data Fees (subscription)
Tim Cave – Financial News

Bats Chi-X Europe is to raise the fees it charges for its data despite being a long-held critic of the high data prices charged by incumbent exchanges.

The London-based trading platform will increase charges for most elements of its market data by 5% from January 1, 2015, according to a price list distributed to members on Monday, first increase since it began charging for its data in October 2012. However, since then the platform has doubled the number of securities it trades, grown its market share to around 22% of all European trading and added a new industry standard to its data, called MMT.

Namibian Group Plans Second Bid To Start Stock Exchange
Felix Njini – Bloomberg

NamFin-X, a group of Namibian and international investors, is reapplying for a license to establish a new securities exchange in the country, after an initial bid was stalled by regulators seeking more information.

Saudi Capital Markets Regulator Seeks Local Opinion On Stock Market Liberalization
Shuja Al-Baqmi – Asharq Al-Awsat

The Saudi capital markets regulator is seeking the opinions of stock market analysts, economists and a host of other local financial experts on final steps to liberalize the country’s stock market for foreign investment.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX sand FTIL both slip 2% today. No news, seems like stasis once again!


Schwab Ready To Unveil Free ‘Robo-Broker’ Service

Charles Schwab is weeks away from introducing an automated investing service aimed at winning business from novice investors it does not currently serve..

Netagio Responds To Institutional Demand By Launching Its API

Netagio, the first British Bitcoin, gold & Sterling exchange, announced the launch of its API.


Euronext Opens Equity Options Markets To US Investors
FTSE Global Markets

Euronext will begin to offer Dutch and Belgian equity options to certain eligible US investors after receiving approval from SEC. This initiative is complementary to the existing ability of qualifying investors in the US to trade index futures on the AEX, CAC40, BEL 20 and all Euronext commodity products.

WSE Eyes New Derivatives Opportunities (subscription)
Luke Jeffs – FOW

The new CEO of WSE has said he will put derivatives at the heart of his strategy as the Polish market finalises the details of a new plan to be announced at the end of October.

PLY: We await the plan with interest. FOW are in Warsaw next week hence the pre-event PR. Alas I can’t be there as I am in Moscow to speak at the Open Innovation Forum.

TSE: Handling Of Tick Sizes From October 31 Onward

As previously announced, Tokyo SE (TSE) have applied a separate set of narrower tick sizes to TOPIX100 constituents from January 14, 2014 onward.

China’s Futures Market Booms
Shanghai Daily

The combined turnover in China’s four futures exchanges reached 24.5 trillion yuan (about four trillion U.S. dollars) in September, up 17.7% from the same period last year, said the CFA (that’s: China Futures Association btw). September turnover was 14.8% higher than August.. China Financial Futures Exchange is the biggest marketplace by turnover, followed by Shanghai Futures Exchange, Dalian Commodity Exchange and Zhengzhou Commodity Exchange.

Time To Focus On Chinese Derivatives (subscription)
William Barkshire – Financial Times

There have been many false dawns in the progress to open up China’s participation in global capital markets.

That has led to the loss of interest by some overseas investors and in some cases retrenchment. However, under Xi Jinping’s leadership market liberalisation is now gathering a real pace and international players should start paying more attention to concrete evidence of development.

Read also our Premium post China Liberalises.

PLY: Good to hear from Bill Berkshire, he has been quiet since HKMEX hit the wall.

U.S. CFTC Clearing Rules Eyed For Some Currency Derivatives
Silla Brush – Bloomberg

CFTC members and staff are weighing whether to require that contracts for non-deliverable forwards be guaranteed at clearinghouses that accept collateral from buyers and sellers. The regulation would apply the clearing rule to contracts for a dozen currencies, including China’s yuan, South Korea’s won and Brazil’s real.


TASE Launches Options And Futures On TA-100 Index

TASE BoaD approved the launch of derivatives (options and futures) on the TA-100 index. The new derivatives join existing products on a number of underlying assets – the TA-25 index, the TA-Banks index, the ILS/USD exchange rate, the ILS/Euro exchange rate, and 10 individual stocks included in the TA-100 index.

Career Paths

Markit announced the appointment of Edwin Cass to its BoD as a Class III director and the resignation from the Board of Zar Amrolia, a Class II director, each effective October 2nd 2014. Timothy Ryan agreed to become a Class II director of the Board in order for Mr. Cass to be appointed as a Class III director. The board of directors remains at 12 members. Mr. Cass was also appointed to the Audit and Risk Committee of the Board.

ESMA Vacancy Notice – Procurement Assistant

The deadline is 9 November 2014. Please refer to our Vacancy page for further details.

Financial Calendar

New announcement

TMX Q3 Financial Results – Thursday, November 6, 2014 – press release here
ITG Q3 2014 Financial Results – Monday, November 3, 2014 – press release here
Interactive Brokers Q3 2014 Financial Results – Tuesday, October 21, 2014 – press release here

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

Analyst Notes

ICE Upgraded By Citigroup From “Neutral” To “Buy”
CME “Neutral” Rating Reaffirmed By Citigroup – $82.00 Target Price Up From $73.00
Citigroup Assumed Coverage On CBOE – $55.00 Price Target
GFI Upgraded By Zacks From “Underperform” To “Neutral” – $5.50 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.

Other stories

Taiwan To Relax Rules To Bolster Stock Market

Taiwan’s financial regulator announced a package on Tuesday to help bolster the stock market after a recent heavy sell-off of stocks by foreign investors. Under the eased rule, limits will be calculated separately for borrowing by investors to go long or short on stocks, the Financial Supervisory Commission (FSC) said in a statement.

The current limits are smaller, as they combine the two.

NY AG Eric T. Schneiderman Applauds Deal Between University Of Michigan & Bloomberg Ending Early Release Of Market-Moving To HFT

AG Eric T. Schneiderman praised the agreement between the University of Michigan and Bloomberg LP to distribute the university’s consumer confidence survey through Bloomberg’s news service. Bloomberg will take over distribution of the survey from Thomson Reuters, which charges investors a fee for an advance copy of the survey. Bloomberg announced that it will end that practice.

PLY: Hmmm, maybe I ought to reinstall Netscape 1.0 back on my laptop from 1994 and then demand all market participants homogenize to my new data standard of sloth?

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