105 Exchange Invest Weekly Podcast July 31st, 2021

Exchange Invest
Exchange Invest
105 Exchange Invest Weekly Podcast July 31st, 2021
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Transcript

 

        This week in the parish of bourses and market structure: 

        Awesome Nasdaq results as India’s IEX power market electrifies with their P&L statement. 

        Meanwhile, even PLY has the occasional share of the headlines…

        My name is Patrick L. Young,

        Welcome to the bourse business weekly digest.

        It’s the Exchange Invest Weekly Podcast Episode 105

        Good day ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the weakened market structure. All the analysis of the week’s many events and happenings can be found in Exchange Invest daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox. 

        More details: ExchangeInvest.com.

        Thank you readers, friends, parishioners for all your kind words. It was a fabulous day last Thursday as the RNs hit the wires and messages popped up from colleagues old and new across the globe. Being appointed Executive Director of Valereum Blockchain is a wildly exciting development from me, Patrick L. Young to what was already a stunning 2021 for market building – let’s see where it leads! 

        Over in crypto land, crypto-based ‘Shadow Financial Markets’ are spooking regulators. 

        According to Politico:

        “New financial services built on cryptocurrency are offering consumers the ability to borrow and trade billions of dollars without the oversight of bankers or their regulators. Washington is now scrambling to catch up, amid concerns of illegal activity and minding consumer risks.”

        And if you believe in Decentralised Finance (DeFi), Gazza Gensler is coming to get you. Essentially, unless your DeFi network avoids the US and the US dollar in its entirety, with say, servers, in maybe Sealand or Scaramanga’s private island in the South China Sea from in Fleming’s “The Man with the Golden Gun”. Perhaps North Korea and Taliban controlled territory could be options for your network. Unless you’re in those sorts of places. Frankly, you might as well be emailing Gazza@sec.gov right now with your orange tailoring measurements. So you look reasonably attired when you do the perp walk of shame in your new Federal orange jumpsuit.

        My new  hashtag for DeFi is #NotGonnaHappenOnEarthTryMars

        Of course, I mean, that’s pretty revolutionary but as we all know, Rome wasn’t burnt in a day. 

        Now to address the history issue here, I think of the 1960s-70’s when Africa’s predilection post colonialism was a near never ending stream of coups. Likewise, what does the history of the Russian revolution teach us? 

        They might alter / modify / change aspects of the law itself, but the basic system stayed the same even as the politics shifted around. Indeed, in Africa, the coups usually saw the same Secret police apparatus – albeit reporting to a different President/Dictator/General. DeFi thinks it’s going to outsmart all of this. And by all of this, I mean, multiple thousand years, where the legal system has had an a net centralization, unfortunately, to the notion that DeFi is going to suddenly wipe away 1000s of years of legal precedent and practice depending on the legal system you look at. 

        HAB I say (where the “B” stands for ‘Balderdash’, clearly.)

        It was a busy week for results in the parish, all the deals were in Exchange Invest daily, the newsletter no person can afford to be without in capital markets and market structure. For the sake of this podcast, let’s just look at a few wonderful highlights:

        NASDAQ awesome results delivering 21% increase in revenue compared to the prior year. 

        With an $811 million consensus, NASDAQ crushed those numbers coming in at $846 million. Excellent results, Adena Friedman looked on top of the world in more senses than one as she talked to CNBC from the roof of NASDAQ’s Times Square HQ. 

        Meanwhile, IEX (Indian Energy Exchange) shares are quoted in India, their Q1 accounts were simply stunning. IEX recorded a 49.3%  rise in consolidated net profits, that’s Rs 62.82 crore on a 34.1% rise in net sales  to 91.03 crore in Q1 FY 22 over the previous quarter of FY21. 

        Meanwhile, good to see Deutsche Boerse they’re also rising through the profit charts, Q2 profits net profit up 21% better than expected. Great data from Deutsche Boerse in a week when so many other aspects of the financial market infrastructure disappointed but to read about all those disappointments and others, including the excellent numbers from MSCI, you needed to be subscribed to Exchange Invest daily. More details about that at ExchangeInvest.com, so you too can be at the watercooler of the bourse business Monday through Saturday. 

        New markets this week:

        CBOE, they’re gonna launch their new European Derivatives Market on September the 6th, they have received Dutch regulatory approvals to use CBOE Europe as the platform and the Euro CCP as their Central Clearing Counterparty. Of course, that’s now Euro CCP, which is a subsidiary of CBOE these days.

        All the very best to Ade Cordell and his team with the new CBOE ETD market in Amsterdam. Looking forward to your progress from September the 6th.

        Deal this week:

        Well, just before they announced those excellent up 21% numbers, NASDAQ announced they’re gonna spin out their private markets exchange in a deal with a series of banks and by sides. In other words, they’re going to be doing a deal where they’ll be contributing and receiving some equity for their platform, while a series of other counterparties are going to join in what is going to be a rejuvenated, bigger and presumably better NASDAQ private market. At the same time NASDAQ announced a price to some 615 a million euros of senior notes this week at a yield of actually a yield so insignificant I don’t think it’s even worth reporting. 

        Elsewhere, on Singapore Exchange they’re buying FlexTrades FX OMS, better known as Maxxtrader, they’re paying $125 million for that. The proposed acquisition of Maxxtrader from FlexTrade systems follows the acquisition of the remaining stake in BidFX which SGX did not own in June of last year. 

        Don’t forget ladies and gentlemen it’s the middle of summer. I know in the Northern Hemisphere summer you’re having winter breaks down under, well, that’s if you’re not actually locked down which seems to be the case of huge swathes of the Southern Hemisphere right now particularly the People’s Republic of Australia and indeed, neighbouring it the other Commonwealth People’s Republic of New Zealand 

        While you’re in lockdown or whether you’re on holiday, perhaps you’re even lucky enough to be on the beach. If you’re looking for some reading, don’t forget to pick up a copy of my most recent book “Victory or Death” – Blockchain, Cryptocurrency and the FinTech world, published by DV Books and distributed by Ingram worldwide. 

        Meanwhile, we’re in summer holidays at the moment with IPO-Vid Livestream. But don’t forget, you can call by a YouTube.com look for IPO-Vid, and you’ll be able to pick up all of the back issues 37 riveting episodes of discussion about markets.

        In crypto land this week:

        Well another week of warnings, warnings and warnings with actually not a few implicit threats. The Bank of Russia told stock exchanges in Moscow to avoid crypto-related funds. Investment products should not be listed in Russia, which are related to cryptocurrency prices. 

        Meanwhile, a class action suit offered COIN ALERT went the headline on Business Wire: Investors with substantial losses have the opportunity to lead the Coinbase Global Inc. Class Action Lawsuit

        Lead plaintiff motions for the Coinbase class action lawsuit must be filed with the court no later than this September the 20th 2021. 

        Case allegations: The Coinbase class action lawsuit alleges that Coinbase’s offering materials were false and misleading and omitted to state. Well, ladies and gentlemen, they omitted to state various things I have to add at that time of the offering. Of course Coinbase, even with a Bitcoin bump this week on the possible speculation of what Amazon might be doing, actually finds itself in the doldrums. Still, the stock has been essentially half where it reached at its peak just after the DPO frenzy burst. As you recall, we were cynical from the start. 

        Meanwhile, Binance, well they’re on the road to Damascus. It seems they could be seeking a new CEO, they could be seeking a new headquarters, they could be seeking multiple new headquarters. They might even be transparent about where they have any of their offices amidst a litany of regulatory probes and a multitude of banks and other services refusing to allow them to accept payments for Binance. 

        At the same time their current CEO, Mr. CZ said he welcomes regulation and presumably wants to have to say through gritted teeth given how reluctance Binance appears to have been in the past towards embracing regulation. Contrition of some sorts seems to be the order of the day at Binance. But well, ladies and gentlemen, I’m just not really ready for a moment of Damascene road repo, are you? 

        Meanwhile, in China, Cryptocurrency Exchange operators Huobi and OKCoin both announced they’re closing their Beijing subsidiaries amidst China’s crackdown, as a crackdown which also has driven vast swathes of the cryptocurrency mining business to the United States of America. 

        Elsewhere talking of well fraud investigations of the week and other criminal probes, Tether Executives (that’s tether the stable coin), their management are said to face a criminal probe into bank fraud. 

        In other words, the title or the name of that company Tether now seems to be in handcuffs, which looks like the likely outcome. We may wish to brace ourselves yet ladies and gentlemen for what I think is going to be a remaining Q3 is unlikely a Q4 with a lot of litigation in the crypto space, and I fear one or two massive frauds may yet emerge as part of the crackdown denouement. 

        In product news this week:

        ICE launched a discussion paper on the evolution of the Brent Complex in association with S&P Global while SiX (the Swiss Exchange)expanded their custody services reach to the United States of America. 

        Meanwhile, the United Kingdom was revising its SPAC rules, while simultaneously IOSCO, the International Union of regulators was seeking to ensure sparks don’t run amok with securities regulations. 

        Technology, ASX CHESS – a slow motion car crash, while Patrick McConnell on LinkedIn lamented the ASX CHESS replacement of a slow motion car crash, forex clearing utility CLS completed the migration of their settlement services to a new state of the art platform. 

        Elsewhere, Arcadier, who are people who build all sorts of marketplaces for e-commerce, they’re partnering with Exberry, the exchange software provider to develop deep tech trading infrastructure for marketplaces.

        Finally, in a white paper this week, the London Blockchain firm SETL have detailed their bold approach to regulating the blockchain and making it profitable for all. You can read it if you go to our website ExchangeInvest.com, a download of the paper Realising the Internet of Value  that’s on the podcast page where you can find all of the other podcasts in this series from ExchangeInvest.com., all 105 Exchange Invest weekly podcasts.

        Over in India, a couple of snippets of technology news. India’s power exchange IEX, they’re the people with the incredible 49% increase in profits over the last quarter. They’re partnering with the Belgian Scale-up company N-SIDE to implement their power matching solution based on Mixed-Integer Linear Programming (MILP) for price discovery in the day ahead market. 

        Elsewhere, the MCX data breach which took place a while back, there are going to be no charges against the former MD, a breath of relief there for one former CEO.

         Regulation news this week:

        The European Union is tightening their rules on crypto asset transfers. In other words, crypto asset transfers are going to become just like bank transfers full AML KYC and an understanding and a specificity no less of who is doing the transferring. 

        The SEC’s Gary Gensler, has been issuing warnings left right and centre as fake stocks bloom on blockchains was the way that the Bloomberg journal split the headline. SEC Chairman Gary Gensler has a warning about the synthetic stocks popping up on blockchains. And of course, as you’ll recall, various synthetic stock providers have suddenly withdrawn those blockchain solutions across the course of the last week. 

        Good reading from Shearman and Sterling, the US law firm with a very very significant footprint in Europe. They’ve reviewed the UK wholesale markets and reviewed essential reading. A very very useful primer on the key points as Britain looks to a great post MIFID Brexit future.

        Warnings from Forbes back to Gary Gensler.

        Gary Gensler’s political start at the SEC aids allies, could harm investors. That’s like waking up from the haze which infected the US to delirium back when things were being sensibly – if Uber manically on the PR front – managed/deregulated by the Trumpy one?

        Gary Gensler sees Stablecoins as securities. Gary Gensler’s agency is looking at security based swaps as well.

        I have to say I think Gazza is spot on with the idea that Stablecoins are potentially securities. They look very, very much like something akin to security to me. 

        And of course, if you’re wondering where all that zeal for regulation is coming from, remember who’s got Gary Gensler’s back in Congress, none other than Senator Elizabeth Warren, she’s been pressing, Janet Yellen, the treasury secretary and regulators to address what were in terms the ‘growing threats’ in the crypto market. 

        In other words, Senator Warren, one might say, is applying the analogue era political standard of “stuck record campaigning” to digital finance. Nonetheless, the crackdown looks to be growing. 

        Ladies and gentlemen, on that note of crackdowns that leads me to only point out one final story, the UK Financial Conduct Authority, all was the nanny state of regulators believing that investors need an incredible amount of protection issued a coin warning this week. Specifically, they issued a consumer warning on a company called Coinburp Limited

        I mean #seriously? somebody called something Coinburp and people invested? Do we also allow these people to vote? 

        And on that mysterious and magnificent note, ladies and gentlemen, my name is Patrick L. Young.

        Thank you very much for listening to this, the latest episode 105 of the Exchange Invest weekly podcast. I will be back next week with a brief surmise of what has happened in the business of bourses.

        But of course, if you want to be right up close to the watercooler of exchanges, don’t forget Exchange Invest. It’s out every day of the week in newsletter form, and it’s the easiest, simplest, most accessible and I must say so pithiest way to understand the business of bourses. 

        Until next week, my name is Patrick L. Young. 

        Thanks for listening, have a great week in life and markets.

 

LINKS:

Crypto-Based ‘Shadow Financial Market’ Spooks Regulators
Politico

Nasdaq Reports Second Quarter 2021 Results; Delivers 21% Increase In Revenue Compared To Prior Year
Nasdaq

Nasdaq, Inc. CEO Adena Friedman on Q2 2021 Results – Earnings Call Transcript
Nasdaq

IEX Q1 PAT Rises 49% YoY To Rs 62 Cr
Business Standard

Deutsche Boerse Q2 Profit Rises
Nasdaq

Deutsche Börse : Boerse Q2 Net Profit Up 21%, Better Than Expected
Marketscreener

Deutsche Boerse Q2 Net Profit Boosted By M&A Growth
KFGO News

Cboe To Launch New European Derivatives Market On Sept. 6
Nasdaq

Cboe Europe And EuroCCP Receive Dutch Regulatory Approvals For New European Derivatives Market
CBOE

Nasdaq To Spin Out Exchange For Private Businesses In Deal With Banks
Financial Times

Nasdaq Sees Up To $1.5 Billion Of Revenue From Trading Platform
Bloomberg

Bank of Russia Tells Stock Exchanges to Avoid Crypto-Related Funds
Yahoo Finance

Binance Seeks New CEO, Headquarters Amidst Regulatory Probes
Bloomberg

Binance CEO Says He’s Willing To Step Down As World’s Biggest Crypto Exchange Welcomes Regulation
CNBC

Cryptocurrency Exchange Operators Huobi, OKCoin To Close Beijing Subsidiaries Amid China’s Crackdown
South China Morning Post

Tether Executives Said To Face Criminal Probe Into Bank Fraud
Reuters

Circular 21/111 Paper On The Evolution Of The Brent Complex
ICE

SIX Expands Its International Custody Services Reach To The US
SiX

UK Revises SPAC Rules To Attract Listings To London Market
Bloomberg

Britain Eases SPAC Rules As Global Watchdog Puts Sector On Watch
Reuters

New IOSCO SPAC Network Discusses Regulatory Issues Raised By SPACs  
IOSCO

Global Markets Regulators Team Up To Keep Watch On SPACs
Yahoo Finance

CLS Completes Migration Of Its Settlement Service To New State-Of-The-Art Technology Platform  
CLS

Arcadier And Exberry Partner To Deliver Deep-Tech Trading Infrastructure For Marketplaces – Exberry Provides Its Robust Infrastructure To Enhance User Capabilities And Price Discovery For Arcadier’s Marketplace Builder Platform
Exberry

London Blockchain Firm SETL Details Bold Approach To Regulating Blockchain
Setl

India’s Premier Power Exchange IEX Partners With The Belgian Scale-up N-SIDE To Implement Its Power Matching Solution Based On Mixed-integer Linear Programming (MILP) For Price Discovery In Its Day Ahead Market (DAM)
PR Newswire India

MCX Data Breach: No Charges Against Former MD
The Hindu BusinessLine

EU To Tighten Rules On Cryptoasset Transfers
Nasdaq

SEC’s Gensler Issues Warning As Fake Stocks Bloom On Blockchains
Bloomberg

UK Wholesale Markets Review
Shearman & Sterling

Gensler’s Political Start At The SEC Aids Allies, Could Harm Investors
Forbes

Gary Gensler Sees Stablecoins As Securities
The Coin Republic

Elizabeth Warren Presses Janet Yellen, Regulators To Address ‘Growing Threats’ In Crypto Market
CNBC

UK Financial Conduct Authority: Consumer Warning On Coinburp Limited
FCA










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