September 15 2015

 elb2PLY: Already ITG looks so ‘last year’ in the dark pool fining accumulator as SEC announces a lottery sized payday from their restitution mechanisms. Meanwhile EU regulators, as I have noted for ages, don’t have enough money to implement Brussels’ big regulatory agenda. Sobolewski under fire in Bucharest?

Meanwhile in the big world out there, Australia’s Liberals (really quasi-Conservatives, like Britain’s liberal Conservative government) deposed their leader Tony Abbott installing as PM Malcolm Turnbull. As an ex-head of Goldman Sachs in Sydney, do we presume that the successful dotcom investor will lean more towards the ASX, or towards free markets? A point to ponder…

Housekeeping note for Young Markets Delegates: Free workshop at Warsaw SE by RSVP tomorrow 1700, co organised with CIAMSE, 1700, please email for registration. Young Markets runs from 0900 Thursday 17th at the Westin Hotel, Warsaw – looking forward to some great crunchy discussion!

Public Markets

LSE Confirms Sale Of Proquote To IRESS

Terms of transaction not released. Deal is expected to be completed in Q4 2015. Acquisition also includes LSEhub.

PLY: A minor buy, a minor sell, nothing material for the bottom line.

Credit Suisse Said Nearing $80 Million Dark Pool Settlement
Keri Geiger & Sam Mamudi – Bloomberg

Credit Suisse will pay more than $80 million to settle state & federal authorities’ allegations that it didn’t fully disclose to its clients how it operated its dark pool – more than $50 million in fines and disgorgement in what would be a record dark-pool settlement with SEC, as well as around $30 million to the New York Attorney General.

FAO: In August ITG paid $20 mln to settle “secret trading desk” claims with SEC.

PLY: As I commented on Aug 13th: “The auction war heats up for SEC fines – it’s just a case of when not if we see “any advance on $20 million…” Doubt that cheers anybody up at Credit Suisse or Barclays who may now feel as if they are locked into a sort of inverse Dutch option – whoever hits the ‘Pay fine’ button may find themselves paying less than the next guy given the strong uptrend.”

Uh oh…Barclays…

SEC Obtains $30 Million From Traders Who Profited on Hacked News Releases

SEC announced that Ukrainian-based Jaspen Capital Partners Limited & CEO Andriy Supranonok have agreed to pay $30 million to settle allegations they profited from trading on non-public corporate information hacked from newswire services.

SEC announced charges in August against 34 defendants who allegedly took part in a scheme hacking and newswires & transmitting the stolen data to a web of international traders, including Jaspen and Supranonok.

FXCM Completes Sale of FXCM Hong Kong To Rakuten Sec

Total consideration approx. $38 million. Additionally, FXCM anticipates repaying $33 million outstanding under its credit agreement with Leucadia and will have repaid $115 million to date, leaving $195 million remaining.

Read in Premium FXCM Stakes Sales Brief and FX – CHF Crisis – Brief.

3Red Set For ‘Spoofing’ Legal Battle (subscription)
Gregory Meyer – Financial Times

3Red Trading, a proprietary trading firm, is girding for a court battle with CFTC as it awaits charges over “spoofing” — duping other traders by quickly entering and cancelling orders.

Read in Premium The Kennel – Premium discussion of the “Hound of Hounslow”.


On the agenda: Approval of the amending the Company’s Articles of Incorporation structured on the dual system of administration.

SIFs Want ‘BVB Problem’ In Their Own Hands (Romanian version)
Adina Ardeleanu – Bursa

BVB’s BoD, with a mandate expiring early next year, suddenly remembered, after a 1.5 years delay, that in April 2013, BVB shareholders approved, at the request of SIF Moldova, mandating the BoD to propose during the next AGM moving to a dual board system… (a Monitoring Council (7 members) & a Directorate (3 members)).

The current CEO will thus become the President of the Directorate, while the current members of the BoD will become members of the Monitoring Council. The Directorate is named by the Monitoring Council.

PLY: The relatively neanderthal approach to Romanian corporate governance may be perceived as alive and well. The powerful post voucher privatisation funds “SIFs” (circa 21.5% of BvB’s stock) are seeking to exert control and have Ludwik Sobolewski in their sights.

HSBC Latest Bank To Leave Aim
Marion Dakers – Daily Telegraph

HSBC has joined the growing exodus of large banking advisers leaving London’s junior stock market, after asking to cancel its status as a nominated adviser (nomad).

PLY: Problem or Opportunity? Big flaccid banks cannot support SME fundraising under their existing structures. A blow to AIM but an opportunity for the smaller NOMADs to grow…

EU Cash Squeeze Threatens Post-Crisis Financial Reforms
Huw Jones – Reuters

Insufficient funding for the European Union’s trio of financial watchdogs undermines reforms aimed at averting another financial crisis, leaves banks in the dark and weakens the region’s voice in global rulemaking.

PLY: QV What I have been arguing for 2 years now: ESMA, EBA & EIOPA simply do not have the cash (each agency’s budget is minimal compared to even the biggest bank’s individual lobbying efforts) to implement the blizzard of (mostly dimly overly prescriptive) regulation facing finance. Start by ripping up MIFID II I say and work out from there towards a wave of deregulation which enables the future…

EEX Approved As Registered Reporting Mechanism

China Brokers Shut Out of Own Futures Market Try Singapore
Amy Li & Helen Yuan – Bloomberg

“Goodbye, China Financial Futures Exchange; Hello, FTSE A50!” reads an advertisement by a unit of Shenzhen-based Essence Securities on the WeChat messaging service, referring to Singapore-traded futures on an index of the biggest mainland companies.

PLY: A Sino-variation on the SIMEX NIKKEI bear market story…

The Unraveling of Tom Hayes – Part Two –  THE GAMBLER (subscription)
David Enrich – Wall Street Journal

Part One here.

GFI Group Announces Consent Solicitation With Respect To Its 8.375% Senior Notes Due 2018


GFI Group has commenced a consent solicitation with respect to its 8.375% Senior Notes due 2018 (CUSIP No. 361652AA8) which have been fully and unconditionally guaranteed by BGC Partners.

SEC Publishes ISE Holdings’ Form 1 Application For ISE Mercury

PLY: Rem: Mercury proposes a customer priority/pro-rata market structure but with a different fee structure focusing on a payment for order flow/rebate-driven structure.

Private Markets

NSE’s Own Goal & A Hurrah For More Transparency
Mobis Philipose – Livemint

It’s interesting how things, sometimes, come full circle. National SE, which prides itself for bringing transparency to India’s capital markets, was lambasted by a judge of the Bombay high court for, among other things, a lack of transparency. Hopefully, this will serve as a wake-up call for India’s stock exchanges and their regulator for increased transparency.

Last week Bombay High Court dismissed NSE’s notice of motion against Moneylife, and directed the exchange to pay Rs 50 lakh (USD 75 k) to Moneylife. Earlier in July, NSE had filed a Rs 100-crore defamation accusing Moneylife of publishing a ‘false’ algo trading report.

BATS London FX Matching Engine Goes Live
Andy Traveller – Finance Magnates

BATS Global Markets has gone live with its new London FX matching engine, via newly-acquired subsidiary, HotSpot FX.

NOREXECO Launches Derivatives Exchange Platform For Pulp & Paper Industry – ECC To Provide Clearing Services For New Products

Former Boss Of HKMEx Barry Cheung Gets Jail Term Quashed (subscription)
Julie Chu – SCMP

Barry Cheung Chun-yuen, former Executive Council member and Chairman of the now-defunct Hong Kong Mercantile Exchange (HKMEx) had his six-week jail term for failing to pay an employee quashed yesterday, and was instead ordered to perform 160 hours of community service.

Read our Premium HKMEx Fate Brief.

PLY: Gosh takes us back to those amazing days which ended in 2013 when HKMEX was the poster child for an exchange burning cash faster than any other…

NSIA Moves To Revamp Nigeria’s Comatose Commodity Exchange
Business Day

The Nigerian Sovereign Investment Authority (NSIA), (Nigeria’s SWF), has expressed interest in reviving the country’s Commodity Exchange, a process which government authorities estimate could cost as much as $20 million.

Read our Premium Rise of Africa Brief – Part 5.

PLY: Please send me a cheque for $20 million, I am sure I can do the revamp for less…

Bitcoin Blockchain Technology In Financial Services: How The Disruption Will Play Out
Laura Shin – Forbes

Both the financial services and Bitcoin communities perked up last week when Citi, Nasdaq, Visa and other large financial institutions invested in, a Bitcoin blockchain services provider.

…while most everyone seems to agree that the technology will disrupt financial services, there’s no consensus as to how it will play out.

PLY: There is huge value in here, I am working on it right now (and discussing it a great deal at Young Markets this week). However the way forward is not a single path nor even a simple binominal…

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL (63 Moons) down 2.5%


Symphony Reaches Data Deal With Regulator (subscription)
Gina Chon & Ben McLannahan – Financial Times

New York State Department of Financial Services Reaches Agreements With 4 Major Banks On New Symphony Chat & Messaging Platform

Goldman Sachs & Deutsche Bank are among four banks that have reached a record-keeping agreement with a New York regulator to settle concerns that some features of Symphony, the messaging tool, could hamper investigations.

The DFS agreement, which also includes Credit Suisse and BNY Mellon, takes some regulatory pressure off Symphony ahead of its launch Tuesday. The start up recently struck a deal with Dow Jones to offer news content in its service as it looks to battle Bloomberg, the market leader.

PLY: Worries about the proposed Symphony “guaranteed data deletion” function presumably mean Snapchat aren’t looking at getting into financial messaging anytime soon.

Thomson Reuters Launches Industry Leading Market Data Services In SGX Co-Location Data Centre


CME Turns Its Guns On US Oil Export Ban (subscription)
Gregory Meyer – Financial Times

CME has deployed its powerful Washington lobbying operation to aid oil companies fighting curbs on exports of crude. The move is a rare foray outside derivatives and tax policy that usually occupy CME’s lobbyists, and highlights how high the stakes are over energy trading rules for some companies in the financial sector.

Changes To Market Operation Rules For Borsa İstanbul Derivatives Market (VIOP)

EEX: Successful Start Of Trading In Cap Futures


KRX Launches Strategy Indices Of KOSDAQ & Currency Derivative Markets

KRX Launches KOSPI Benchmark Index (i-KOSPI) For Institutional Investors 14, Sep. 2015.

Career Paths

Reuters reports that Dr. Leila Fourie, executive director responsible for JSE‘s post-trade and information services, will be leaving the exchange in mid-2016.

Bloomberg reports that Johan Tellvik, Brevan Howard Capital Management’s last remaining equity-focused manager, has left the hedge-fund firm one year after he joined.

Traders Magazine reports:

Tabb Group hired Dayle Scher as a senior analyst in the company’s research and consulting business, with a focus on technology and equities.

Keith Cataldo has been appointed director of trading at Fenimore Asset Management, the investment advisor to FAM Funds.

Bursa Malaysia appointed Datuk Chay Wai Leong as its Nominee Director to the BoD of its subsidiaries, Bursa Malaysia Derivatives Berhad and its clearing house, Bursa Malaysia Derivatives Clearing Berhad.

The BoD of these subsidiaries as at 14 September 2015 consist of three Nominee Directors of Bursa Malaysia Berhad and one Nominee Director of CME which owns 25% shareholding in Bursa Malaysia Derivatives Group. They are as follows:

  1.   Dato’ Tajuddin bin AtanCEO & Executive Director of Bursa Malaysia Berhad
  2.   Dato’ Zuraidah binti AtanNED & Public Interest Director of Bursa Malaysia Berhad
  3.   Datuk Chay Wai LeongIndependent NED of Bursa Malaysia Berhad;
  4.   Mr. Bryan Thomas Durkin, a CME Director.

Evercore appointed Finula Cilliers as the Firm’s Investment Banking business as a MD in the Debt Advisory Group in London.

Fired Currency Traders Won’t Leave Quietly
Suzi Ring &  Kit Chellel – Bloomberg

Six lawsuits filed in London by FX traders emerged last month. Banks also faced employee suits after Libor scandal lay-offs.

Financial Calendar

15.09 – Thomson Reuters $0.335 quarterly dividend payment

16.09 – Record date ICE $0.75 Q3 2015 dividend

16.09 – NZX 3.0 cents interim dividend payment

18.09 – CBOE $0.23 quarterly cash dividend payment

New announcements

CFTC Agricultural Advisory Committee to Meet on September 22, 2015 – press release here.

BVB EGM – 28/29.10.2015

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

Share Notes

Interactive Brokers Vice Chairman Earl H. Nemser sold 2,561 shares on Sep 10, 2015 at $38.12 (bargain $97,617.46).

Check our Share Notes page in Premium.


Indiegogo Is Getting Ready For Equity Crowdfunding
Harry McCracken – Fast Company

When Facebook announced in March 2014 that it was acquiring virtual-reality pioneer Oculus VR for $2 billion, the news caused jaws to drop throughout the tech industry. It also left at least a few of the 9,522 people who had contributed to Oculus’s Kickstarter campaign less than two years earlier grumbling that they should be cut in on the windfall.

Sorry, crowdfunders: The $2.4 mil­l­ion you put up via Kickstarter entitled you to posters, T‑shirts, and prerelease versions of the Rift headset, not equity participation in a landmark deal. But Oculus’s journey from crowdfunding phenom to blockbuster acquisition did get people asking a bigger question. Sites such as Kickstarter and its archrival, Indie­gogo, have had a transformative effect on how startups bootstrap themselves. Why shouldn’t the masses be allowed to invest in new companies and have a chance at realizing a profit?

PLY: Which also undermines the story from last week where somebody claimed Kickstarter & Indiegogo would not go the equity crowdfunding route…

Slovak P2P Lending Marketplace Zlty Melon Raising Capital
P2P Banking

Žltý melón, the first p2p2 lending service in Slovakia, has successfully completed a Series A investment round. The first tranche was little below 1M EUR, with the agreement for additional capital in range of 2M EUR after several milestones will be achieved.

Global Crowdfunding Market Now Worth 30 Billion

Other stories

ESMA Chair’s Statements To The ECON Committee At The European Parliament

PLY: To be read to the background noise of somebody rattling a collection tin, for a realistic feel of how it is nowadays to be that remarkable entity – a pauper of the blob.


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