Nov 23, 2023 9 min read Exchange Invest Weekly Podcast

221 Exchange Invest Weekly Podcast November 25th, 2023

This week in the parish of bourses and market structure: It's A Tale Of Two Techies, BSBY Bye Bye, Meanwhile In Crypto Land, The FUD has gone, as David Guetta Might Have Sung…

Transcript:

This week in the parish of bourses and market structure:

It's A Tale Of Two Techies

BSBY Bye Bye

Meanwhile In Crypto Land

The FUD has gone, as David Guetta Might Have Sung…

My name is Patrick L Young

Welcome to the Bourse Business Weekly Digest

It's the Exchange Invest Weekly Podcast Episode 221.

Good day, ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the week in market structure. All the analysis of the many events and happenings from the past 7 days can be found in Exchange Invest Daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox.

More details at ExchangeInvest.com

The headline “Kraken Up!” as the US authorities attacked another exchange looked like the apotheosis of the weakened crypto but that was superseded by the DOJ’s pre Thanksgiving actions where the only conclusion could reasonably be that - to paraphrase the classic David Guetta song “The FUD has gone!”

$4.3 billion in fines later and one wonders if the goblin trolls of Binance’s cult might even have a pixel of remorse for their endless for “4:FUD!” which is hampered debate, discussion, and the reasoned analysis of the company and its often somewhat sub-transparent activities.

The business with no case to answer led by an allegedly peerless Canadian citizen, is now $4.3 billion poorer with CZ, it’s ex-CEO with a distinctly un-4:FUDDISH! Guilty plea marked on his card.

Will the $4.3 billion be fully played? Or do we have another naked emperor distributed on a horse?

Time will tell but meanwhile, congratulations to the new Binance CEO, former ADGM boss and senior MAS / STX executive Richard Teng. At least he adds a degree of gravitas to the exchange which might help ensure it can survive in turbulent times.

If you enjoy this excerpt, you may be interested to know that you can read Bitcarnage every day in Exchange Invest.

Alternatively, if you want to follow Bitcarnage, the daily update on happenings in the world of crypto and digital assets. You can find Bitcarnage as a standalone on Substack.

Over in the world of legacy markets, ASX finally it's back to the future - or perhaps just back… for the ASX settlement solution.

The better part of $300 million down the drain or more and now a few hundred million more will mean ASX might have a solution by the end of the decade. Albeit the vendor TCS is still working on TMX in Canada, and that seems to be wildly over budget.

The ASX is nowadays more renowned for shamelessly cheerleading itself as a tech company…where its ‘excellence’ in tech has been increasingly fixed in a T+forever settlement window. Now the one's trailblazing thing they were going to do with the new Kids on the Blockchain of Digital Asset, is going to be superseded (sic) by the company which also produced the memorably awful Tata Nano microcar. To complete the automotive metaphor, the ambition to deliver a cutting edge prototype and the supercar mould is now being set up to be the deployment of a rather older solutions architecture.

That architecture raises some inelegant post scripts:

ASX referenced the TMX installation in their PR that was unveiled in June 2017 and is still pending installation.

This is of course halted the same TCS company which totally failed to deliver the MCX trading system this past year.

At least I suppose this bit of the project is a mere bagatelle of $125 million AUD for phase one which will be implemented by 2028/29… So probably we don't get a full settlement solution before the end of the decade in fact.

Meanwhile, in the Middle East, ADX (Abu Dhabi Stock Exchange) has signed an MOU with the New York Stock Exchange to improve business collaboration.

Having seen the ICE management team do world class from over the Abu Dhabi waters and ADGM, ADX first took the network last week. Now they're going for a full-on cooperation over listings and much much more.

In Hong Kong, they will lower the stamp duty on stock transfers to 0.1%.

Trading is alas going to cease at the century-old Calcutta Stock Exchange on November 28^th following a directive from the Calcutta High Court. Therefore means that our announcement last week, the Calcutta Stock Exchange was going to get a full reboot relaunch next year would appear to have been somewhat premature.

It was a busy week for results in the parish and all the details 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 look at some edited highlights.

ATHEX improved markedly, Saudi somewhat slumped and TASE (Tel Aviv Stock Exchange) tweaked a double-digit gain amongst this week's flurry of results.

In new markets, Kenya's agricultural commodity exchange will go live in February 2024.

Meanwhile, in deals news, it was quite busy in deals, the news was of course in Exchange Invest Daily.

The London Stock Exchange Group is in optimistic mode with a pledge of a billion dollars of stock buybacks during 2024 while in other deal news, a long-standing discussion may yet be resurrected as a deal, at last.

Over in Manila, there's talk once again of a PSE PDEx deal uniting the stock exchange with the bond market. That conversation has been a fixture of Exchange Invest for years.

If you're trying to understand how technology is affecting life and markets, check out my recent book, “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World 20 years old from the excitement of the original FinTech best seller Capital Market Revolution. It's published by DV Books and is distributed by Ingram worldwide.

Meanwhile, while you're waiting for your copy of “Victory or Death?” to arrive, check out our LiveStream Tuesday 6pm London, 1 o'clock New York time - the IPO Video live show.

Catch the back episodes on Linkedin, and Youtube via “IPO-Vid”.

Our most recent guest was absolutely magnificent, Johan Norberg discussing The Capitalist Manifesto. It is a must-watch, go check it out. You can catch it on Youtube just search for “IPO-Vid”

Our “Finance Book of the Week” this week is by The Father of Financial Futures and himself an epic IPO-Vid guest on a couple of episodes ago in a show #123 Richard Sandor.

Richard Sandor: Electronic Trading and Blockchain: Yesterday, Today and Tomorrow discusses many exciting themes in the world of electronic markets.

Perhaps most notably, in 1970, the first widely used electronic trading exchange was established. Richard Sandor was the project director and father of the California Commodity Advisory Research Project (CCARP) which was alas a wonderful digital project just 20 years too early for the financial world.

Product news this week, lo BSBY dies in a year. A farewell to the Bloomberg risk-sensitive rate index regulatory pressure appears to have killed what is an essential development for the treasury toolbox in the future…

That marks a very murky trough in the interest rate business as a limited regulatory caste seeks to throttle risk transfer from risk-based products. It's a foolish move but hardly surprising given the gross limitations of many central banks for the past decade or two who retain a Canutian faith in their ability to control interest rates, despite all evidence to the contrary.

Meanwhile, great news from Australia's competitor futures exchange FEX.

FEX Global has set a December date for listing Large-Scale Generation Certificate (LGC) deliverable environmental futures contracts.

The CME is looking at launching €STR (Short Term Interest Rate) contract in Q1 2024.

Saudi exchange are introducing single stock options.

The Philippines will be selling tokenized treasury bonds for the first time.

From tokenization technology to the move to the cloud, NASDAQ has completed the migration of their third US market to Amazon Web Services. Once again great metrics for another smooth NASDAQ transition.

Speaking of transition CBOE Japan have completed their successful technology migration.

It's a major difference, I suppose, between Exchange Invest and the meeja at large. They wish to all too often highlight the tech inadequacy in a bourse where whereas Exchange Invest delighted to trumpet the success of the great technology that backs up our parish from NASDAQ and elsewhere.

Herewith the parish gazette wishes to salute the departing CTO of CBOE APAC, Michael Aikins who has for years run the software Chi-X in Australia and beyond with mellifluous excellence.

Not only did he transition the new CBOE Oz with a Rolls Royce smoothness, now he has completed his last major task before he stands down next year with the migration of CBOE Japan. Absolute excellence and plaudits to Mike and his magnificent team.

(Some of course might just wish to draw parallels with the ASX tech shambles and the excellence around the corner in much more modest Sydney offices but we would not be so gauche in a week where ASX went retro with the Digital Asset failure being pushed aside to the legacy tech provider TCS who are also still working to deliver the TMX market framework six years on having just endured Bollywood intrigue without glamorous dance numbers sadly, not being present where TCS finally delivered a very late trading solution to MCX.

Oh, did we say that out loud?

Finally, this week in technology, Tradeweb is going to acquire the technology provider of algorithmic systems R8fin.

One item of career news this week, the London Stock Exchange Group has appointed a new CFO Michel-Alain Proch, he's coming from the French multinational advertising and PR conglomerate, Publicis Groupe (Finance Feeds).

And let me end this week by saying it was a joy in BigWorld to be out there in a very very big world. Indeed the world's largest landlocked country no less. I was in Almaty, Kazakhstan last week for the 30th anniversary celebrations of the Kazakhstan Stock Exchange. It was a magnificent event including a fabulous conference where yours truly was honored to be the keynote speaker. I had the joy of chairing an illustrious panel to boot.

The theme of the conference was "The Role of Exchanges in the Transformation of Financial Market". A theme of course very close to the heart of Exchange Invest and this podcast and that was duly explored from many angles while we all enjoy the majestic welcome in the world's largest landlocked nation, home to the Baikonur cosmodrome and a massive exploration industry.

Fun fact, Kazakhstan was 18th in terms of daily oil production in the world in 2022 with the energy business constituting over 50% of GDP.

Thank you to CEO Alina Aldambergen of the Kazakhstan Stock Exchange and her terrific team for the invitation to this magnificent event.

And on that mysterious and magnificent note from the Caucasus ladies and gentlemen, my name is Patrick L. Young, creator of marketplaces the world over founder and publisher of Exchange Invest.

Join us at ExchangeInvest.com.

I wish you all a great week in life and markets.

LINKS:

Binance Founder Changpeng Zhao Agrees To Step Down, Plead Guilty
WSJ

Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With DOJ
Forbes

ASX Announces Product Based Solution For Chess Replacement – Industry Consultation On Next Phase To Commence In 2024
AFR

ADX Signs Pact With New York Stock Exchange To Explore Dual Listings
The National

Hong Kong To Lower Stamp Duty On Stock Transfers To 0.1 Pct
Xinhua

Trading To Cease At Century-Old Calcutta Stock Exchange On November 28
The Times of India

Kenya Agricultural Commodities Exchange To Go Live In 2024
The East African

LSEG Pledges £1 Billion Of Buybacks In 2024 As Boosts Guidance
Bloomberg

Bourse Merger Bid Revived
Inquirer Business