October 30 2014


Good numbers from WSE suggest the changes by outgoing CEO Adam Maciejewski were bearing great fruit as the government was parachuting Pawel Tamborski in to office.

Lots happening on all fronts, a sprinkling of pith is below and now, apologies time for me to race to RT studios in London…happy scrolling:

Public Markets

WSE Q3 2014 Financial Results

Consolidated net profit was PLN 30 mln (USD 8.93 mln) in Q3 2014, an increase of 15.5% YoY and 46.9% QoQ
Total revenue increased to PLN 77.9 mln (USD 23.18 mln) , i.e., by 12.9% YoY and by 12.4% QoQ
Revenue from the financial market was PLN 49.3 million and was stable compared to previous quarters
The Group’s operating expenses decreased by 5.6% QoQ to PLN 41.9 mln (USD 14.67 mln)

PLY: Very encouraging numbers which clearly bear testimony to the strategy of the outgoing CEO and provide a good base for new CEO Tamborski to build on, to wit here is his much trailed new strategy:

Key Assumptions Of The Updated Strategy GPW.2020

WSE wants to be the exchange of first choice for investors and issuers in Central and Eastern Europe
WSE will become client-centric and tailor its offer to market needs
WSE will focus on growth in those business segments where it has competitive advantages
WSE’s ambition is to grow revenue by 7% CAGR by 2020. The Exchange Management Board expects EBITDA to double and the cost/income ratio to fall below 0.50 in that period.

PLY: In the rush to pixel, what I can see appears to be more Soviet cant than a clear strategy (“increasing tractor production’ has been replaced with a modern mantra to invest in state of the art technology – er, so what was that NYSE Tech then…er…clearly more details required). Sounds worryingly as if his time in government has made CEO Tamborski more of a politician than a manager. More data required (and it may be in the documents attached) but the headlines are frankly utterly uninspiring rhetoric. After all the hype: the announcement itself is in danger of being, well, disappointing hype.

This problem isn’t such a terrible plan but after all the hype, clearly hype and brochureware is a huge disappointment and demonstrates a worrying naivete at the top of WSE that they think investors will buy froth without substance.

Fast Traders Are Getting Data From SEC Seconds Early (subscription)
Ryan Tracy & Scott Patterson – Wall Street Journal

Hedge funds and other rapid-fire investors can get access to market-moving documents ahead of other users of SEC’s system for distributing company filings, giving them a potential edge on the rest of the market.

Two separate groups of academic researchers have documented a lag time between the moment paying subscribers, including trading firms, newswires and others, receive the filings via a direct feed from an SEC contractor and when the documents are publicly available on the agency’s website.

PLY: Sometimes you just cannot make this stuff up – will the SEC now prosecute themselves in line with Chairman Mary L. Schapiro ‘s hardline approach to market indiscretions in recent years?

KRX Should Follow Global Trend & Go Public: JPX CEO

“Cutting to the chase, it is better to go public,” Atsushi Saito, the CEO of JPX, told reporters during the WFE Annual Meeting held in Seoul. “Looking at South Korea in its overall state, I think it would serve them better if the bourse is operated on a private level.”

FTIL May Move CLB Against Govt’s Board Rejig Proposal
Rajesh Bhayani – Business Standard

FTIL is planning to file a caveat before the Chennai branch of the Company Law Board (CLB) against the government’s proposal to change the management of the company post the merger of NSEL with it.

Yesterday EI reported that the Blackstone Group Lp and the Sheth brothers are planning to challenge the government order regarding the merger.

PLY: Another great victory for the legal fraternity and a setback for the resolution of the NSEL debacle where government is now messing the process up enormously.

FTIL Delists Shares From Madras And Ahmedabad Stock Exchanges
The Economic Times

On October 10, company’s Board has approved voluntary delisting of the company’s equity shares from Madras & Ahmedabad stock exchanges.

Bond Trading Platforms Raise Stakes (subscription)
Tracy Alloway & Michael Mackenzie – Financial Times

The battle of the electronic bond trading platforms is set to intensify as Tradeweb rolls out its new offering to a wider range of market participants on Wednesday.

Corporate bond transactions have long been dominated by traders at big Wall Street banks but tougher regulatory standards and a market that has encouraged investors to pile in to credit has eroded the traditional “dealer” role in recent years.

FAO Bigger Picture: Liquidnet bought Vega-Chi in March, DB1 backed Bondcube is poised for a November launch, while ITG are also planning to launch a fixed income platform. The UK regulators approved Bondcube platform this month.

SGX Exploring Crowdfunding Platform For Startups (subscription)
Kenneth Lim – Business Times

SGX is exploring the feasibility of an equity crowdfunding platform for early-stage companies, and has formed a team focused on SMEs.

PLY: Very interesting, I do believe SGX ought to be looking much more closely at being a part of the startup scene centred around the dynamic city state, whether in fintech or elsewhere.

Europe Should Shake Up Tax Rules To Boost Equity Investment – LSE boss
Clare Hutchison – Reuters

European countries should change their tax rules to encourage investment in small businesses, the head of LSE said, as a sector crucial to the region’s revival is starved of cash by banks.

PLY: Yip, yip and thrice yip – not just tax rules burn the red tape that kills small business at the expense of the blob.

LME Fee Increase Could Widen HFT Bid/Offer Spreads (subscription)
Metal Bulletin

LME’s decision to increase fees by an average of 34% from next year could mean that high-frequency traders will need to change their strategies if costs are passed on, according to Standard Bank analyst Leon Westgate.

Charles Schwab’s New Platform Is The Latest Salvo In The Fight Against Other “Robo Advisors” Such As Betterment And Wealthfront
Value Walk

Charles Schwab disclosed on Monday, October 27th that a new online advisory platform to be marketed as Schwab Intelligent Portfolios would debut in the first quarter of 2015. By foregoing management and transaction fees, Schwab intends to be “disruptive” to competitors.

Previous discussions here.

FCA Markets Head Labels EU Dark Pool Caps As ‘Clunky’ (subscription)
Tim Cave – Financial News

A senior official from the FCA has branded proposed EU caps on dark pool trading as a ‘clunky’ policy measure, in a sign of the growing tensions between the UK and European regulators on new trading rules.

PLY: I would prefer a different term but “clunky’ is diplomatic enough against a regulation that merely adds complexity to markets and fails to help any investor.

DTCC Drops Case Against CFTC In Row About Data

DTCC dropped its case against CFTC in a dispute about access to potentially lucrative trading data, a court document showed on Wednesday.

Iosco Warns On Data Challenge To Risk Oversight (subscription)
Jeremy Grant – Financial Times

The top body representing global markets watchdogs has issued a warning over the proliferation of data collection systems in the $700tn derivatives markets, saying regulators will be unable to spot risks building up in the financial system unless data are aggregated properly.

Private Markets

Small Australian City Plans For A Big Bitcoin Economy
Jon Southurst – Coindesk

A plan to build the “world’s largest” local bitcoin-based economy is underway in the city of Launceston, Australia, with support from local businesses and even government.

Project organizers say the compact Tasmanian city with a population of 106,000 will make a good high-density testing ground for bitcoin. The plan is aimed to cover various levels of the business supply chain, allowing users to both receive and spend their bitcoins, rather than simply converting them to Australian dollars.

PLY: A great Tasmanian innovation in a remarkably lovely small city – go Launceston!

Dividend News

CBOE declared a quarterly cash dividend of $0.21 per share of common stock payable on December 19, 2014, to the unrestricted common stockholders of record on November 28, 2014.

Special Section: FTI, NSEL, India at the Crossroads

PLY FTIL and MCX flat as ongoing arguments about the ill-conceived proposed tearing up of corporate law with forced merger continues:

The NSEL Albatross Around FTIL’s Neck
Sridharan Ramakrishnan – The Economic Times

Limited liability is the keystone of modern-day corporations. Strike at that and you bring the roof down. The government’s order that the scam-tainted NSEL be merged with its parent FTIL to make good the losses of investors who speculated in commodities, violates the principle of limited liability. To be clear, the government does have the powers to force such mergers when public interest is at stake.

PLY: Yip in terms of failure to understand the basics of how to create a legal system that encourages enterprise, this is as fundamental as it goes, short of forced nationalisation. It is wrong, wrong and wrong.


US Plan To Curb Speed Traders “Will Hike Cost” (subscription)
Luke Jeffs – FOW

Speaking at the 54th WFE General Assembly in Seoul, Korea, Paul Hilgers, the group CEO of Optiver Holdings, said the US plan to impose speed bumps on traders “underestimates the complexity of the market”.


Euronext To Launch Rapeseed Meal, Oil Futures On Nov. 14

Euronext will launch futures and options for rapeseed oil and rapeseed meal on Nov. 14, with trading starting with delivery positions for next year’s harvest, in addition to Euronext’s existing rapeseed market, thereby offering a full rapeseed complex.

India – Govt Withdraws Exemptions To Spot Exchanges For One-Day Forward Contracts
Business Standard

The government on Wednesday withdrew exemption granted to spot commodity exchanges for launching one day forward contract in both agri and non -agri segments.

MOEX: Initial Margin Change In FX Market Starting From October, 31 2014

Due to the NCC decision the following risk parameters will be applied starting from October, 31 2014

Cross-Currency Swap Tear-Ups Hit US$500bn

Banks have torn up more than US$500bn of legacy contracts in the US$25trn cross currency swap market since compression cycles got underway for the product just six months ago.

Facing stringent capital and leverage requirements on derivatives exposures, particularly for those contracts that cannot yet be centrally cleared, banks have scrambled to clean up their balance sheets by eliminating superfluous trades.

Through its triReduce service, post-trade infrastructure firm TriOptima completed its first cross-currency cycle in May when eight participating firms eliminated ¥12.3trn of yen/US dollar swaps.

After four further cycles, the number of active participants has increased to 20 and the service has extended to cover euro/US dollar, Canadian dollar/US dollar and sterling/US dollar transactions.

PLY: How many PHDs will look back and write theses on how TriOptima played a key role in making the brave new post OTC world work and kept the lights on at cash-strapped banks?

Markit Extends Securities Finance Offering
Securities Lending Times

Markit has extended its securities finance offering with the integration of all publicly disclosed short-selling positions required by ESMA regulations.

Markit Securities Finance customers can now obtain a complete view of short interest which includes global securities finance trade data reported to Markit by lenders and borrowers, alongside public short selling disclosers.

Career Paths

The chief regulatory officer of SGX, Mr Richard Teng, has resigned from the company.SGX said Mr Teng will be moving on to take on the role as CEO of the Abu Dhabi Global Market Regulator.

MGEX BoD named 2014-2015 public directors, Board officers and approved committee assignments.
Four public directors were appointed by the Board:

Steve Fanady and William R. Power will each serve one year terms while Michael V. Dunn and Alan J. Swimmer will each serve two year terms.

The Board also elected officers and members of the executive committee. Richard A. Dusek was named Board chairman; Christopher T. Matzdorf was elected first vice chairman; Martin F. Farrell was named second vice chairman. Public directors Steve Fanady and William R. Power complete the executive committee.

The Board appointed chairmen for committees of the Board of Directors and standing committees of the corporation. A list is below.

Committees of the Board – Chairman
Audit – Richard A. Dusek
Executive – Richard A. Dusek
Nominations – Steve Fanady
Personnel and Compensation – Scott A. Cordes
Regulatory Oversight – William R. PowerRisk
Management – Alan J. Swimmer

Standing Committees of the Corporation – Chairman
Cash Markets – Michael O. Miller
Contracts – Michael O. Miller
Disciplinary – Mark G. Bagan
Hearing – Richard A. Dusek

BGC Partners has announced the appointment of Phil Cramp as Head of Credit, Repo and EGBs in London. Mr. Cramp succeeds Rob Kitchin who has been employed with BGC for twenty years and is leaving to pursue interests outside the industry. Mr. Cramp will formally assume Mr. Kitchin’s role on December 1, 2014.

PLY: I am delighted to see the elevation of the excellent Phil Cramp who remains a longstanding and inspirational figure in the world of OTC markets and will, I believe play a key role in their future development. A Happy day, well done Phil.

Financial Calendar


CME Q3 2014 Financial Results
BGC Partners Q3 2014 Financial Results
Thomson Reuters Q3 2014 Financial Results


CBOE Q3 2014 financial results

New announcement

Markit Q3 2014 Financial Results – Wednesday Nov 12th 2014

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


London Broker Launches ‘Crowdfunding’ Platform For Listed Companies
Business Spectator

A London brokerage is setting up a P2P service to let listed companies “crowdfund” equity finance from investors. FinnCap will enter the nascent online-lending market in partnership with equity crowdfunding website InvestingZone.

Start-Up Lendoor Aims To Use Crowdfunding For Small-Business Loans
William Alden – New York Times

A fledgling company in New York wants to bring the principles of crowdfunding to a dusty sector of American finance: small-business lending.

Reddit Adds A Crowdfunding Layer For Its Members
Mathew Ingram – GIGAOM

Reddit has launched a crowdfunding platform for its members called Redditmade — another in a series of bets that Reddit has made on the power of its community, something traditional media companies could learn from.

PLY: A cool innovation from Reddit, very very interesting amidst a series of fascinating crowdfunding updates.

Other stories

EEX Opens New Office In Milan

The move follows the successful entry of EEX in the Italian energy market.

CME to Host Seventh Annual Global Financial Leadership Conference

CME Group will host the seventh annual Global Financial Leadership Conference (GFLC) Nov. 17-19, 2014, at the Ritz-Carlton Beach Resort in Naples, Florida. The GFLC is an exclusive event that brings together decision-makers from the world’s leading financial institutions to discuss the global investment climate and outlook, debate critical economic issues and share insight and analysis of geopolitical trends and the global financial landscape.

PLY: In keeping with the current spirit of cost cuts at CME, er, er, hold on a moment… looks like an interesting programme with a broad array of 50K plus speakers, I am sure it will be an interesting event.

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