October 3 2016


In Today’s Exchange Invest

So the RMB hits the big time with SDR status at the IMF while the Indians having jumped forward into commodity options, lurch back with a handicap possible for successful commodity exchanges. New market for diamonds as ICEX relaunched with oil too in India. NASDAQ preparing for Halloween power up of Canadian competition. Africa sees capital markets encouragement as Autilla may be in pole position for an LBMA deal…and there’s more:


Lots of events on the horizon, I will highlight two:

Burgenstock is coming November 14-16 while I will be in Stuttgart 16th November by the time ICDA’s annual conference closes to chair a fascinating one on one with ESMA supremo Stephen Maijoor at the 10th edition of the Boerse Stuttgart MIFID Congress. I am looking forward to both as part of a busy month (it’s Web Summit the week before too).

In BigWorld
Best sports news of the weekend was the wonderful Filly Found beating the boys to win the Prix De L’Arc de Triomphe with a sensational podium shutout by Irish trainer Aiden O’Brien. Meanwhile the Ryder Cup turned so unseemly at the weekend that in places the golf crowd displayed the tawdry air of a Presidential debate. Presumably the EU will now retaliate over golf defeat by sanctioning Google, as the US has itself moved on from Barclays to attack Deutsche Bank to garner acute systemic impact.

In Britain the Prime Minister elegantly teed off the British departure from the European Union towards the vast fairway of global commerce and the Hungarians like the notion of resettling Syrian refugees as much as the UAE does it seems – albeit only one put it to the vote before deciding not to take any in.



Public Markets
PM May Urged To Probe Stock Exchange Takeover Bid Over Fear £21bn Deal Could Damage Competition
Daily Mail

PLY: Years ago, I well recall a then chief dealer of part Pearson owned bank, Lazards, noting that he often got good ideas from the newspapers – but invariably the tabloids, particularly the Daily Mail…AKA not Pearson’s FT. The Mail has an unparalleled website chronicling the lives of more people I have never heard of than any other media organ I can readily recollect. However, the reason this counts is because the Mail represents the British Conservative supporting backbone beyond the Daily Telegraph. The Mail is pushing against LSE (which must really upset the LSE agitprop department who usually can count on their dog whistle making the UK media remarkably pliant) with gusto. I get the feeling the British government is hoping the EU will first kill the deal before it has to intervene. Interestingly, that arch remainer who pushed the former regime’s mantra of panicked meltdown, XavRol, was all optimistic in the Telegraph last week and calling out the mutually assured destruction a vengeful Brussels may seek to wreak. He’s right but he’s late to the party, others, naming no names, said that months ago.

Moreover, I still don’t think his pivot will be enough to save the DB1 takeover.

Nasdaq’s Canadian ‘Dark Pool’ Launch Set For Halloween
The Globe and Mail

PLY: Dark pools and Hallooween always remind me of a London Liquidnet party where their marketing supremo Damian Kington dressed as a vampire. Arresting image once seen, never forgotten. Anyway, back in Canada, NASDAQ are preparing to be the next force besieging TMX just when Jos Schmitt again seems to have them quite well pinned down in various areas (once again).

The move into the Canadian dark-pool market is one of Nasdaq’s first major strategic moves since it announced a deal to acquire Chi-X last December.

Deutsche Bank, UBS, RBS Said to Mull Selling Tradeweb Stakes

PLY: It isn’t entirely a ragbag of motley banks with legacy capital issues but this is another good sign that where cash is available, banks will seek to exist their market structure investments (LME passim et al…).

Cramer: Exchange Stocks In The Middle Of A Wall Street Renaissance

PLY: The briliance of Cramer is his ability to simplify. This is, by turns, also his most infuriating trait as he manages to almost but not quite completely misunderstand the parish – at least based on this brief outpouring of comment. The problem is doubtless more in the summation than the argument for investing in the parish…albeit I still think the difficulty is distribution of investment throughout the pyramid but that takes a bit of work. Yet developing the markets of tomorrow is going to be vital.
Euronext Weighs Bid For Clearnet
City A.M.
PLY: I have pruned a few really obvious non-stories today but for some reason have charitably maintained this outdated missive (perhaps out of sympathy for the LSE press office who having lost the Mail may lose DB1 too).  Interesting pricing worth noting. LSE want to sell off something they have apparently said loses them money for roughly the same amount as the entire LCH deal when LSE invested. The one thing XavRol has been is a canny deal maker on the way in but his only exit with Russell marked the high water mark of his term in office…
Japan Exchange Group: Status Of Acquisition Of Own Shares

Stick With ‘One Man, One Vote’ In The Market
The Straits Times
Just watch the furore unleashed by the Singapore Exchange (SGX) among stock activists and corporate governance experts after its recent suggestion of changing to dual tier shares…
LSE’s CurveGlobal Live But Merger Casts Its Shadow
FOW magazine

Revitalized Philly Stock Exchange Relocating Again



Private Markets

UK Sinha Seeks To Correct Business Imbalance Between Commodity Exchanges

Currently, out of three commodity exchanges, metals and energy bourse MCX has around 85% market share followed by agri exchange NCDEX.

PLY: For those who wonder what, say a Bernie Sanders or a Jeremy Corbyn leadership of the US or UK might look like, then consider the more ridiculous socialist posturings of Sebi as a starting point. Having free markets saddled with such nebulous interventionism is an ongoing point of systemic weakness for India.

Commodities Trading: Stock Exchanges Will Have To Wait For Some More Time

PLY: #TheHandIsMeantToBeINvisible

Sebi Considering Entry For Mutual Funds In Commodity Derivatives
Business Standard

ICEX Gets Sebi Nod To Recommence Operations
Millennium Post

Earlier this week, Reliance Capital chairman Anil Ambani had announced that the firm will re-launch its commodity exchange with focus on diamonds and crude oil.

PLY: Interesting mix – and a second specific product line in diamonds following the lead of SDiX in Singapore which launched at the start of summer.

Shanghai Stock Exchange Bids For Stake In Pakistan Bourse
Nikkei Asian Review

PLY: Fascinating, the first attempt by a Chinese mainland exchange to buy a stake in an overseas market.

Cyprus To Hire Independent Advisor For Cyprus’ Stock Exchange Privatisation
Famagusta Gazette

PLY: My memory might fail me but I do believe that in all Exchange Invest’s near 900 issues, this is the first time the “Famagusta Gazette” has been the source of a story. Fascinating, news on Cyprus, wonder who will be in offering advice – there is a rich opportunity in the Mediterranean but little value in being part of a bigger group currently imho.

Gold Market Rife With Rumours Of Likely LBMA Partner To Increase Transparency
Platts (blog)

PLY: Good luck to Autilla if they are indeed the chosen party (they were always reported to be bidding with Cinnober) – albeit I am not sure I understand the notion of the LBMA seeking to improve market transparency… I always thought the London gold market wasn’t really overly fussed on such new-fangled democratic leanings. Times they are a-changing obviously.

ETMarkets: What Options Launch Means For Commodity Exchanges
Economic Times

PLY: A whole new realm for options markets – and a vast new educational campaign will be mounted…of course even in the early years of this decade, the likes of MCX and NCDEX were habitually educating the population of Wyoming or Luxembourg annually, so their concept of educational scale can cope with the task.

MGEX Announces Third-Country CCP Recognition

PLY: Good

Stockbrokers Want National Assets Sold Through Capital Market
Nigeria Today

Stockbrokers have said the federal government should sell its assets through the capital so more Nigerians can benefit from the exercise.

PLY: Hear! Hear!

Lungu Master Plan Promises Social, Economic Growth
Zambia Daily Mail

President says State-owned enterprises will also be listed on the Lusaka Stock Exchange to ensure broader citizen economic empowerment.

PLY: The more privatisation the merrier for markets, the economy and citizens. The rich irony is that Africa appears to be gaining in the free market growth oriented zeitgeist just as the west is falling apart in a nebulous obsession with inequality and a futile desire for political control as opposed to deregulating and growing the pie.

The Zimbabwe Stock Exchange Data Is Alive On The Internet. Here’s Where It Is…
Technology Zimbabwe

About a month ago, we were unhappy that the Zimbabwe Stock Exchange switched off their very useful website.

Special Section: FTI, NSEL, India at the Crossroads

Below The Line
Hindu Business Line

Financial Technologies played its ace in the NSEL-FTIL merger case last week. Appearing on its behalf, the renowned lawyer Harish Salve is said to have requested the Bombay High Court to give him at least three consecutive days to present his arguments. Salve’s presence has legal eagles eagerly awaiting November 24, when the hearing will take place and we can expect some hard hitting against the corporate affairs ministry’s final order.

Will this bring down the curtains on India’s first attempt at forced merger in the private sector space? Only time will tell.
IBM Buys Promontory Financial Group

Privately held Promontory will be added to the Armonk, NY-based company’s artificial intelligence unit Watson to advise clients on financial regulation.

PLY: Interesting acquisition.

Is Red Tape Holding Back The Financial Tech Industry In Canada?

The Bank of Canada is experimenting with “regulatory sandboxes.”

Seed CX Sets Stage for Hemp Commodity Exchange

PLY: For a product supposedly reputed to make you laid back, many folks are weaving themselves into a lather about Hemp futures on the GMEX powered CX.

RBI Allows Foreign Investors To Raise Stake In MCX
Economic Times

PLY: Total foreign holding is now set at 34%  for FIIS and RFPIs but there is still a 15% limit per individual holder. Progress from the Central Bank where the regulator seems to be having a little regessive spell.



Commodity Options To Start With Agri, Non-Agri
Times of India

PLY: Nevertheless this was vast progress and long may it continue that at least some part of Sebi sees the light of free markets.

Cattle Market Beefs Up Trading With Online Deals From Auction

PLY: More on a topic often mentioned of late (e.g. here). It’s a tricky conundrum to resolve.


Vietnam Stock Market Introduces Common Index
Tuoitrenews (press release)


Career Paths


ViableMkts Fintech Strategic Advisory Business Adds Three New Principals
Business Wire (press release)

PLY: Consultancy adds heft.


First Reg A Issuer Has Gotten Hit By The SEC

Funding Circle CEO: It’s A ‘Golden Age’ For Marketplace Lending As Revenue Jumps 144%
Business Insider

Giving Small Businesses The Best Possible Chance Of Succeeding When Crowdfunding
Crowdfund Insider



Other Stories



ESMA Consults On Future Reporting Rules For Securities Financing Transactions
ESMA Issues Final Guidelines On Inside Information And Commodity Derivatives


IMF Launches New SDR Basket Including Chinese Renminbi, Determines New Currency Amounts

PLY Somewhat completes one key strand of the Chinese Capital Markets Transformation story we were leading on in Premium from a while back. I discussed this with Sputnik radio yesterday too, will post the file as soon as I have it (hopefully tomorrow).

Cambridge Centre for Alternative Finance Holds Standout Inaugural Conference
Crowdfund Insider

PLY: I was alas unable to attend this but did appreciate the invitation…however I was already gainfully occupied in Brazil for the World Coops event last week.

German Stock Market Chief Warns Over Plunging Deutsche Bank Shares
NW Evening Mail

PLY: Comment from the excellent mind of Berlin Boerse bodd Artur Fischer who is a regular pundit with the BBC amongst other channels and always worth listening to.

A Behind-The-Scenes Look At What Actually Goes On During an NYSE IPO
Business Insider

Wall Street Guru’s Spiritual Guide To Hitting Your Number Faster
Business Standard

Brad Katsuyama, founder of the newest US equities exchange operator IEX Group, urges his employees to read Hy’s website RadReads…

PLY: Modesty forbids any mention of other sites the IEX team may be reading but anyway hope you guys all have a great week.

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