October 13 2015

elb2 London SE Group CEO Xavier Rolet was on CNBC Squawk Box this am and delivered some pertinent, pithy, responses. His most pointed remark was reserved for Brussels: “Capital Markets Union is the last hope for the European project.” (He repeated the remark several times for good measure). A brutal but entirely rational response to the disastrous fester of poverty advancement and rampant ineptitude which is leveraging the EU towards the third world. Hopefully somebody might listen, as the Frenchman is hardly a caricature ‘little Englander.’

Meanwhile in Xavier’s homeland, the French Assembly’s Finance Committee has adopted an amendment to include intraday transactions in the existing regressive FTT. …Saving Europe clearly depends on Europe realising it needs to be saved…

Welcome to the Exchange Industry daily, Happy scrolling:

Public Markets

Plus500 Sees 44% Jump In Revenues In Q3 2015

Maria Nikolova – LeapRate

Plus500 reiterated its forecast that the deal with Playtech will be completed by the end of November.  Revenues amounted to $80.9 million, up 44% from Q3 2014.

PLY: Read Dan McCrum below:

Jurisdiction Shopping, Plus500 Style (subscription)

Dan McCrum – FT Alphaville

A trading update lands from Plus500. Let us draw your attention to a paragraph on its regulatory troubles, which resulted in the freezing of all UK accounts earlier this year.

“The Group continues to be the subject of regulatory scrutiny. However, throughout the period Plus500 has continued to work with, and provide any requested information to, the relevant regulators in the jurisdictions that it operates in but is currently not the subject of any restrictions on its business operations.”

No restrictions? This might surprise customers trying to sign up in the UK on Monday, who are told “Plus500UK Limited is currently unable to offer you a trading account.”

QV EI Premium: Plus500 Turmoil & Deal – Brief – Part 2.


CME Permanently Bans 3 Traders For Spoofing, Other Violations


In addition to imposing a trading ban, CME fined Nitin Gupta a total of $150,000, Libin Zhou $100,000 & Rajasekaran Veeramuthu $50,000.

QV EI Premium: Flash Crash & Hound of Hounslow – Brief.

PLY: So long, farewell, good riddance. May all exchanges be more proactive in this regard, weeding out those who do not abide by the rules.


Staley To Face Challenges At Barclays (subscription)

Martin Arnold – Financial Times

PLY: Jes Staley will become the new Barclays CEO with a background in, and likely appetite for, investment banking. US regulators must be salivating at the fines they can reap through their next round of regulatory roulette.


Five Things We Learnt At LME Week (Day 1) (subscription)

Neil Hume – Financial Times

PLY: My inner contrarian itches at news from the LME week crowd that “everyone is pessimistic about base metals.”


Chinese Banks Press On With LME Trading Despite Downturn

Eric Onstad – Reuters

Chinese banks and brokers will keep seizing opportunities to expand trading on LME, filling gaps left by Westerners withdrawing from commodities, unfazed by a downturn in the world’s biggest metals consumer.


Citi Dials Down Risky Block Trading Amid Market Turmoil

Olivia Oran – Reuters

Over the summer, as the U.S. stock market wobbled and then plunged 4% in a day, Citigroup made a tough choice: to dial down risk-taking in the bank’s capital markets group.


Shareholder Norms May Be Eased For Stock Exchanges

Anirudh Laskar & Ashish Rukhaiyar – Livemint

After merger with FMC, Sebi likely to bring the regulations in line with those that govern commodity bourses.

QV EI Premium: SEBI-FMC Merger Brief.


What Mifid II Means For Trading (subscription)

Tim Cave – Financial News


UK Chancellor Announces London & Lima Stock Exchange Collaboration



Nasdaq Nordic Brings Competitive Clearing To Nordic Cash Equity Markets


Choice of CCP providers for trading members on the Nasdaq Nordic cash equity markets in Stockholm, Helsinki and Copenhagen with addition of LCH.Clearnet Ltd and SIX x-clear AG alongside EuroCCP. All 3 will be interoperable.

Private Markets

SET Plans To Allow Foreign Currencies For Share Trading Settlement


Foreign investors currently can only settle share trading in Thai baht. SET wants to include USD & Chinese yuan among its planned alternative settlement currencies.


Mauritius Plans Derivatives Platform In Bid For African Business

Edmund Blair – Reuters

Mauritius plans to launch a trading platform to hedge African currencies against USD.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL up 1%.

Ministry To Hear Out Objections Of NSEL, FTIL To Merger Plan

KR Srivats – The Hindu Business Line

The Corporate Affairs Ministry (MCA) will give separate “brief oral hearings” to FTIL and NSEL as to why they were opposed to the draft merger order issued by the Government in October last year.


Government Likely To Issue Final Order On NSEL-FTIL Merger By Month End

The Economic Times

QV EI Premium: NSEL-FTIL Merger Brief and NSEL Scandal Brief – Part 16.


DME Selects Elysian Technology For Auctions Business


Dubai Mercantile Exchange (DME) has selected London-based Elysian Systems as the technology provider for its new commodity auction business.

PLY: Reader may recall that Elysian Systems was bought by CME Group in 2010.


Opening Cross: Disrupt Or Die (Or Rather, Prepare To Be Disrupted) (subscription)

Max Bowie – Waters Technology

One disruptive force profiled in this week’s issue is Airex, a provider of an online marketplace of third-party content that the vendor says “democratizes” access to information and tools, and which Interactive Brokers is using to build a co-branded marketplace of content services that its institutional and retail clients alike can access, and which will complement—and perhaps ultimately dwarf—its own existing Investors’ Marketplace portal of third-party content.


FIX Trading Community Announce New Digital Currency & Blockchain Working Group



CME Launch Of Global Physically Delivered Lead Futures



Nasdaq Tackles High-Speed Trading In Treasurys (subscription)

Bradley Hope & Sarah Krouse – Wall Street Journal

Nasdaq is wading into a debate over high-speed trading in the U.S. Treasury market with a system it says can shield investors from predatory behavior.


Euronext Extends The Segment For Spotlight Options To France



Arrangements For Adjustment of China Overseas Structured Products and Options



Metals Market Watches China’s Oil Benchmark Plan

Pratima Desai & Clara Denina – Reuters

China’s plan to launch an oil contract to compete with world benchmarks could be a model for a metals one, but Beijing’s response to collapsing Shanghai equities and a currency that cannot be freely traded worry traders.

QV EI Premium: China Capital Markets Transformation Brief – Main File.


DME Eyes Early 2016 For Commodity Trading Auction

Luke Jeffs – FOW


EEX: REMIT Reporting Service Launched



BIST: Daylight Saving Time Change – Power Futures Contract Sizes



FTSE Russell & JSE Launch New ESG Indexes


Career Paths

Bloomberg reports that Barclays Plc is close to naming Jes Staley as its next CEO. The former J.P. Morgan Chase executive would succeed Antony Jenkins.

The Economic Times reports that Metropolitan SE (MSEI) appointed Udai Kumar as interim CEO & MD (as expected) following the resignation of incumbent Saurabh Sarkar.

Bloomberg reports that Deutsche Bank’s Stephen McGoldrick, who was leading Plato Partnership, has decided to leave the project. McGoldrick will return to his role as director of market structure at Deutsche Bank.

QV EI Premium: Platonic Virtues? and Luminex – Crazy Name, Crazy Development?

PLY: Stephen McGoldrick made a considerable impact on Plato while leading the politburo for the non-profit collectivist venue. Perhaps its endorsement of a non-profit model helped encourage the rise of new UK Labour leader, Jeremy Corbyn, who knows…

John Griffith, VP of CHS North America Grain Marketing, was elected to the BoD for the Minneapolis Grain Exchange (MGEX).

FIA Technology Services, a for-profit subsidiary of FIA, hired Nick Solinger as President, effective January 4, 2016. He will succeed Mary Ann Burns, who will become Executive Chairman of the FIA Tech BoD.

ANALEC North America hired Richard Marcus as Head Sales in North America.

Financial Calendar

Interactive Brokers Q3 Results – Tuesday, October 20, 2015

MarketAxess Q3 2015 Results – Wednesday, October 21, 2015

BGC Partners’ & GFI Group’s Q3 2015 Results – Wednesday, October 28, 2015

ICE Q3 2015 Results – Tuesday, November 3, 2015

TMX Q3 2015 Results – Thursday, November 5, 2015

CBOE Risk Management Conference (RMC) Asia -November 30 – December 1, 2015

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

Analyst Notes

ICE “Buy” Rating Reiterated By Deutsche Bank

NASDAQ OMX Upgraded By Zacks From “Hold” To “Buy” – $59.00 Target Price

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.


Goldrush Over? More Than A Quarter Of P2P Lenders Pull Applications From FCA

JD Alois – Crowdfund Insider

PLY: Worryingly it appears the FCA have, and not for the first time, overstepped the mark with their prescription for regulation.


City Veteran Warns Over P2P Isa (subscription)

Judith Evans – Financial Times

“Becoming part of the Isa will convey an aura of respectability on something untested through a market cycle,” said John Spiers, a City veteran who sold Bestinvest in 2007 and now runs EQ Investors, a wealth manager.

Other stories

DTCC Spotlights Role Of Interconnectedness In The Transmission Of Risk & Shares Practical Recommendations



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