October 16 2015

elb2

We’re warming up for a slew of exchange results – “can ailing BME really continue to trade at the same same multiple as Euronext given the latter has a certain growth mojo?” is the question my mind has paraphrased from this am’s reading of the analysts’ notes (h/t Peter Lenardos).

Today, Curve is out of the closet (‘launch’ for such a highly flagged entity can only exist in the mind of the more remote of the PR fraternity), and a lot more, it’s a crunchy day, happy scrolling…

Public Markets

Charles Schwab Q3 2015 Results
Charles Schwab

vs Q3 2014: net income for the third quarter of 2015 was $376 million, up 17%

Net income for the nine months ended September 30, 2015 was $1.0 billion, up 6% vs. 9 months 2014.


DB1 Completes 360T Acquisition
DB1

Total purchase price – 725 million Euro (USD 826.5 mln).

QV EI Premium: 360T Deal Brief.

LSE Launches New Derivatives Venture – CurveGlobal
LSE

PLY: #disappointed is my initial reaction after all the hype. Curious move by CBOE but Curve faces an uphill struggle to not be perceived as a carpetbagging copycat akin to the makers of fake Rolexes hawked on the streets of certain emerging market cities. This remains a huge out of the money punt and top management at LSE strike me as similarly two dimensional to many at NASDAQ and thus will continue to struggle to find a niche in the growth world beyond the binary.

Initial reactions are in more detail in this Premium Post.

China’s CCB In Talks To Buy LME Broker Metdist
Clara Denina – Reuters

European Stock Exchanges Look To Reel In Big Trades (subscription)
Tim Cave – Financial News

Equity Venues Focus On Asset Managers (subscription)
Philip Stafford – Financial Times

After a decade spent catering to calls for equity markets to be faster, cheaper and more efficient, trading venues are now listening to the increasingly vocal demands of asset managers.

In coming weeks LSE and Bats Chi-X Europe as well as Luminex, a US venue backed by a host of asset managers, are set to offer asset managers ever smarter ways to trade large blocks of shares.


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

PLY: I love it when the media lap up a ‘customer service’ mantra and miss the money shot. Yip, the toxic MIFID II madness includes daft, counterproductive volume caps but exchanges appear to have crunched numbers in a way where legacy Institutional Liquidity Pools seem not to have been thinking so hard (& btw one might argue, why would they? Block matches appear very healthy in Europe during 2015). The major point is that BATS and other discounters have reduced equity trades to a sliver of cost whereas blended rates of multiple basis points (yeah: BASIS POINTS – you know the things only banks, not venues, have the habitual luxury of charging!). A modicum of dark knight arrogance has resulted in exchanges moving to take things into their own hands while Luminex is a sound venture in the US built out of those frustrated with incumbents. #Interestingtimes.


LSE In Consultation To Halt “Volatile Trading” On AIM
James Nickerson – CITY A.M.

LSE Tightens Up On Aim’s Cash Shells (subscription)
Kate Burgess – Financial Times

LSE is clamping down on “cash shells” — companies listing on AIM with no assets except cash — in a move to shore up the junior market’s reputation.


EU Countries To Fast-Track CMU Plan
Huw Jones – Reuters

EU finance ministers are expected to forge a common position on the plan at their next regular Ecofin meeting on Nov. 10, considerably shortening EU legislative procedures…

QV EI Premium: EU CMU Brief.

PLY: Here’s hoping – let’s face it Xavier Rolet hit the nub of the EU’s growing crisis when he noted:

“Capital Markets Union is the last hope for the European project.”

The EU is, like all options, subject to time decay.


HFT Becomes US Election Issue
(subscription)
Philip Stafford – Financial Times

Has a US presidential candidate ever focused on equity market microstructure before?

PLY: Interesting q: Did Nixon discuss deregulating stock commissions on the hustings?


UK FCA To Scrutinise Spread Betting Market
IGaming Business

PLY: Is that a smoke signal Plus 500 is under greater investigation, or at least a note suggesting the Playtech takeover deal might not get the nod?


India – Experts: Don’t Dilute ‘Fit & Proper’ Norm For Stock Exchanges
The Hindu Business Line

PLY: Is there a difference in ‘fit & proper’ for commodity or stock exchanges…and if so does that mean reducing regulation to the prevailing comex level? A vexatious question.


CFTC’s Division of Market Oversight Extends Conditional Time-Limited No-Action Relief To Yieldbroker
CFTC

FAO: ASX owns a 49% non-controlling stake in Yieldbroker which is independently managed.


SIFMA AMG Calls For Permanent CFTC Relief For Package Transactions
MondoVisione

Private Markets

Changes To Operation Principles Of Borsa İstanbul Derivatives Market
MondoVisione

RSA – A Township Stock Exchange In The Horizon In Gauteng
Times Live

Work has begun in the Gauteng Department of Economic Development to investigate the possibility of establishing a township stock exchange.

PLY: Excellent grassroots project to help townships grow.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL down 2% as the Indian blob endorses a suicidal immolation of corporate governance practices.

DCA Going Ahead With NSEL-FTIL Merger
The Economic Times

PLY: #Suicide. Elsewhere there has been much media discussion of how the “Make In India” Campaign has so far proven tricky to execute – India needs radical surgery, destroying confidence in the precepts of corporate structure in order to get at one problem is not a viable solution, it’s a vendetta.


ED Opposed Merger Of NSEL With FTIL
The Economic Times

…saying such a move would impede the investigation:


NSEL: Merger With FTIL Will Hamper Recovery Of Rs5,600 Crore (USD 860 Mln)
Livemint

How Not To Let Jignesh Shah Get Away
N Sundaresha Subramanian  – Business Standard

“For a govt that prides itself on talking in one voice on critical issues, a lack of consensus on ‘how not to let Jignesh Shah get away’ could become a huge embarrassment.”

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

PLY: Alas the blob from the top down is making a mess worse.

Technology

Samsung Electronics Collaborates With Thomson Reuters To Explore Joint Opportunities In B2B Business
MondoVisione

PLY: Very interesting.


MOEX – Another Derivatives Trading Halt
Maria Nikolova – LeapRate

Trading in derivatives was halted Thursday at 18:10 & resumed later – at 19:05 (Moscow times). Cancellation of earlier orders was possible after 18:50. The trading session was extended to 19:25.

PLY: This is not good, the MOEX directorate must be under serious stress with all these recurring issues.


Thomson Reuters Permissioning Glitch Strands Asia Firms Without CME Data
(subscription)
Waters Technology

The Sibos 2015 Message: All Hail The Fintech Revolution (subscription)
Anna Irrera – Financial News

The potential for technology and new business models to disrupt finance was itself a disruptive force at the 2015 Sibos, the annual megaconference hosted by Swift.

PLY: Gosh SIBOS just reached 1999…well I suppose it’s progress.

Products

CME Set To Unveil Plan For Treasury Fts (subscription)
Alice Attwood – FOW

Nasdaq To Launch Wind Fts By Year-End (subscription)
Alice Attwood – FOW

PLY: Wind futures are not to be confused with the hot air which used to be a centrepiece to the NASDAQ NLX marketing.


World’s Biggest Leveraged ETF Halts Orders On Liquidity Concern
Anna Kitanaka & Toshiro Hasegawa – Bloomberg

Nomura Asset Management Co. will halt subscription orders for its Next Funds Nikkei 225 Leveraged Index ETF and two other funds from Friday.


Will Regulation Help Or Hinder Derivatives Risk Management?
James Williams – HedgeWeek

Indexes

NYSE Launches Enhanced Buy-Write Index, “NYBW”
BUSINESS WIRE

Career Paths

360T‘s CEO Carlo Kölzer will join DB1’s Group Management Committee.

Dow Jones Business News reports that Sweden’s government on Thursday appointed Erik Thedeen to head the Financial Supervisory Agency (Finansinspektionen), replacing Martin Andersson who left the post in April to become a partner with Oliver Wyman.

NZ Financial Markets Authority (FMA) announced a revised organisational structure and key appointments for its executive committee.

The external appointments to the team include: Nick Kynoch, appointed as general counsel, and Sarah Coleman, appointed as director of people and capability. Two new executive roles have been created with appointments from within the FMA: Garth Stanish, director of capital markets, and Simone Robbers, director of strategy and risk. Owen Gill, director of external communications, has elected to leave at the end of his (extended) term while Ms. Diana Christensen, director of people and capability, has also completed her interim role. The new structure is being implemented over the next three months and will be effective from 1 December 2015, with the general counsel function fully effective from January 2016.

The leadership roles announced today join the existing FMA executive committee members, Liam Mason, director of regulation, and John Botica, COO.


Barclays Bags A Bargain
(subscription)
Harriet Agnew – Financial Times

A 2016 start date will save money on Staley’s appointment.


ESMA Vacancy Notice – Market Data Expert – FGIV (Deadline 28 October 2015)
MondoVisione

ESMA Vacancy Notice – Seconded National Expert – Secondary Markets Profile
MondoVisione

Financial Calendar

Next week

19-21.10 – Qatar SE host of WFE General Assembly & Annual Meeting

20.10 – Interactive Brokers Q3 2015 Results

21.10 – SGX Q1 Results FY2016

21.10 – MarketAxess Q3 2015 Results

23.10 – Thomson Reuters Q3 2015 Results

New announcements

JPX Earnings FY2015 (April 1, 2015 – March 31, 2016) – October 30, 2015

CFTC’s Market Risk Advisory Committee – November 2, 2015

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

Analyst Notes

Citigroup Reaffirmed “Buy” Rating On LSE – GBX 3,000 Target Price

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

Other stories

Opening Remarks To The Investor Advisory Committee, SEC Chair Mary Jo White, Oct. 15, 2015
MondoVisione

How Can The Markets Best Adapt To The Rapid Growth Of ETFs, SEC Commissioner Luis A. Aguilar, Oct. 15, 2015
MondoVisione

Ex-U.S. House Speaker Hastert To Plead Guilty In Hush-Money Case
Mary Wisniewski – Reuters

Former U.S. House Speaker Dennis Hastert is expected to plead guilty in a hush-money case stemming from allegations of sexual misconduct in a deal with prosecutors that could still force him to serve time in prison. After his indictment, Hastert resigned from the Dickstein Shapiro lobbying firm in Washington, D.C., and from the boards of CME and REX American Resources Corp.


UK Prudential Regulation Authority: The Implementation Of Ring-Fencing: Prudential Requirements, Intragroup Arrangements & Use Of Financial Market Infrastructures – CP37/15
MondoVisione

 

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