September 01 2015

elb2 Welcome back London readers after a supremely wet bank holiday, even by the soggy standards of the genre I believe. Meanwhile in Hong Kong, the global clients of NASDAQ’s SMARTS technology have gathered to discuss the latest in surveillance systems et al. Interesting meeting with well over 100 clients attending the biennial gathering.

Rem: Burgenstock is Back! September 23rd, the Crossfire panel will be the can’t miss panel of the year and that’s just the opener of the main day: Register Here. A week earlier, if you really want to understand the future of finance, it’s Young Markets, small, intimate and a data rich day out unlike any other on the conference circuit…you can register here.

When they rebranded FTIL aka ‘JigCorp’ as “63 Moons Technologies Ltd” it seemed like a move from the “Shahdenfreude” era to his pivoting away from fintech to some other field. Clearly there is life in the old FTIL mechanisms yet: Power market IEX has just signed an agreement for tech from FTIL-sorry 63 Moons, which is “perpetual, irrevocable, non-transferable and non-assignable.” Yip, more surreal than the enduring Central European heatwave… and certainly not as agreeable.

Elsewhere legacy fintech remains in the crosshairs as BNY Mellon – Sungard continue to struggle with their abaci to calculate NAVs.

Meanwhile, out in the big wide world beyond market structure, RIP Lord Montagu of Beaulieu, founder of the National Motor Museum of the UK located at his ancestral seat. Montagu’s own father it will be recalled, helped mould the Rolls Royce ‘spirit of ecstasy’ emblem.

Public Markets

Euronext Expands Global Reach To Israel
Euronext

Euronext, has received approval from the Israeli Securities Authority (ISA) to allow Israeli based qualified trading firms to have direct access to Euronext’s cash and derivatives markets.

PLY: Arguably worrying sign of hubris emerging at Euronext which has branded itself in this, otherwise welcome, release as “the leading exchange in the Eurozone.” That strikes me as being of dubious merit on multiple levels. For one thing, everybody outside a coterie of delusional blobsters associate “Eurozone” with abject failure, mismanagement and, at best, economic stasis. The last thing Euronext needs at this (still fragile) stage in its wondrous renaissance, is to remind us of its troubled NYSE period which was a festering shambles albeit not as bad as the Eurozone remains… Good announcement but the message risks being lost amidst dubious hype.

ESMA Consults On MIFID II Standards Regarding Trading Suspensions, Data Service Providers & Derivatives Reporting
MondoVisione

Private Markets

‘Risk Management Will Improve Once Pakistan SE Is Formed’
Kazim Alam – Tribune

Currently, ISE and LSE brokers have to first place orders with Karachi-based brokers on behalf of their investors and then they are routed through the KSE’s trading system called Karachi Automated Trading System (KATS). This practice will change after the merger of the three stock exchanges, as Islamabad- & Lahore-based investors will trade shares through direct brokers of a single stock exchange.

Representatives of the KSE, ISE and LSE signed a MoU last week, which will lead to the integration of the three entities into the Pakistan SE (PSE).

Read our Premium Pakistan Exchanges Merger Brief.

PLY: My ongoing crusade for an expanded deregulated universal alphabet clearly reaches another fascinating level. ISE is Islamabad SE & not, well, ISE. Similarly neither the ISE (not Islamabad SE) CEO Gary Katz  (nor ex-SwX boss & forthcoming Crossfire panellist Christian Katz) are referred to when it comes to the phonetically similar Karachi platform, KATS. As to the LSE, well clearly you immediately thought of Lahore SE, being a cosmopolitan reader.

Bloomberg Launches Electronic Trading Platform In Japan
PRNewswire

Bloomberg Tradebook Japan launched its Electronic Trading Platform (ETP) in Japan, in support of the September 1 mandate for banks and securities firms to use electronic platforms for specified OTC derivative transactions.

FIA Releases 15th Issue Of SEF Tracker
MondoVisione

Coinbase Expands Bitcoin Services To Canada
Pete Rizzo – CoinDesk

The bitcoin services firm, which has raised $106.7m in four public venture rounds, is now available in 27 countries in North America and Europe.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Slightly lower orbit for 63 Moons (ex-FTIL), down 1.5% while MCX is off 3%.

Technology

63 Moons Technologies (ex-FTIL) Signs Software Agreement With IEX
Ashish Rukhaiyar – Livemint

63 Moons Technologies (formerly FTIL) signed an agreement with Indian Energy Exchange (IEX) for a perpetual licence agreement for the use of certain application software developed by the listed entity for a one-time licence fee of Rs.108 crore (USD 16.3 mln).

According to a stock exchange statement, the licence is “perpetual, irrevocable, non-transferable and non-assignable.”

PLY: Sadly a paucity of evidence is emerging that the Indian software industry has adopted competitive conventions in the wake of the NSEL scandal. When we get woken up Woody Allen “Sleeper” style a few centuries hence from our cryogenic tank, the one thing we can feel comfortable about is that IEX will still be powered by 63 Moons (unless they adopt a less silly name of course). Does this agreement come stamped with “GUBU” on it or just the old fashioned “Approved?” Either way how any board can let this outrageously daft agreement past them simply escapes me!

BNY Catches Up With Pricing Backlog (subscription)
Kirsten Grind & Telis Demos – Wall Street Journal

BNY Mellon Update On Fund Accounting Issue
MondoVisione

BNY Mellon said Monday morning that it had finished working through a backlog of mutual and ETF-pricing issues before the market opened, ending a weeklong struggle by the company to provide accurate asset values to about 1,200 funds.

Teams at BNY Mellon worked through the night to set net asset values through Friday, Aug. 28, for funds that have been affected for the past week by a software problem at the bank’s third-party vendor, SunGard Data Systems.

PLY: Presumably the only way this fiasco could have been worse timed would have been if FIS hadn’t already signed the agreement to buy. Presumably managements the world over in various entities are now involved in honing Powerpoints and spin to assure their non-executives that there is ‘nothing to see here’ akin to Officer Bar-Brady in South Park at the scene of various disasters.

Blythe Masters Tells Banks The Blockchain Changes Everything
Edward Robinson & Matthew Leising – Bloomberg

As reported in March, Blythe Masters, the former JPMorgan executive who helped pioneer credit derivatives in the 1990s, has re-emerged as CEO of cryptocurrency startup Digital Asset Holdings.

PLY: We’ll be dangling on the cutting edge of the Blockchain at Young Markets September 17th with a series of experts not often seen outside of their natural habitats… It promises to be a fascinating discussion.

Products

Vienna SE: Continuous Trading In Austrian Government Bonds Starts Today
Vienna SE

Irish SE: New Online NAV Submission Process Commences 28 September 2015
MondoVisione

Indexes

MOEX: List Of Securities Under Consideration To Be Added To The MICEX Innovation Index Announced
MondoVisione

MOEX: RTS Index Celebrates 20 Years
MondoVisione

PLY: A Happy Birthday to the RTS Index…

STOXX Changes Composition Of Blue-Chip Indices
MondoVisione

Career Paths

Ashwin Kumar was appointed DB1’s new Global Head of Product Development as of 1 September. He will report as MD directly to CEO Carsten Kengeter. Ashwin Kumar was a founding partner of Meru Capital and worked for the hedge fund from 2009 until 2014. Previously, he was also a founding partner of Old Lane., following a lengthy sell-side banking career with the likes of Bank of America, Commerzbank Securities, CS First Boston and Citibank.

PLY: An interesting move wherein it will be fascinating to see how Ashwin Kumar works with the DB1 Head of Innovation Brendan Bradley in delivering the DB1 vision of markets in the future…

BNY Mellon appointed Michelle Neal as President of BNY Mellon Markets.  She was most recently global head of listed derivatives, markets clearing and fixed income market structure with Deutsche Bank. Assuming her new role on November 30th, 2015, Neal will report to Curtis Arledge, Vice Chairman of BNY Mellon.

Former Silk Road Task Force Agent Pleads Guilty To Money Laundering & Obstruction – Ex-Secret Service Agent Used Status To Pocket $820,000 Worth Of Bitcoin
MondoVisione

PLY: The really surreal twist to this story is that apparently the accused has sold the movie rights to his story – which presumably aids restitution from his previous theft, as it were…

Financial Calendar

01.09.2015 – Record date Interactive Brokers $0.10 quarterly dividend

02.09.2015 – Record date NZX 3.0 cents interim dividend

04.09.2015 – Record date CBOE $0.23 dividend

04.09.2015 – TMX $0.40 dividend payment

04.09.2015 – BGC Partners’ BoD $0.14 quarterly dividend payment

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

Analyst Notes

CME Downgraded By Vetr From “Strong-Buy” To “Buy” – $104.72 Target Price

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

Other stories

Nerves On Edge As Chinese Authorities Probe Market Mayhem
Paul Carsten & Nishant Kumar – Reuters

China State Media Announce Confessions In Stock Market Investigations
Reuters

The head of hedge fund manager Man Group China business has been taken into custody to help authorities in a probe into recent market volatility while separately a local financial reporter confessed on national TV to having spread false information that caused “panic and disorder”.

Both are likely to jangle nerves in the financial industry as regulators try to find out who they think was behind China’s wild stock market rollercoaster ride in the past three months.

PLY: Australian hedge fund manager and provider of blog pith, John Hempton offers an excellent screen grab of a Tweet which surmises China’s current simmering financial angst.

ESMA Approves Greek HCMC Short Selling Ban
MondoVisione

 

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