September 18 2015


Young Markets 2015, a data rich day of market discussion with some brilliant presentations, including our keynote WSE Supervisory Board Chairman Wieslaw Rozlucki, Peter Jessup of NASDAQ, the Aesthetic Integration team of Denis Ignatovich and Grant Passmore & many more! Thanks to sponsors including Invest NI and HanzaTrade for making the day happen and our many fascinating speakers & delegates, including the CIAMSE team from the polish Academy of Sciences. Plaudits too to Thom Barnhardt and his team for a brilliant inaugural CEE Capital Markets Awards. Young Markets will be back in partnership with the awards in Warsaw September 15th, 2016, save the date now!

Next week it’s SFOA Burgenstock, looking forward to a fantastic Crossfire session!

Public Markets

JPX Annual Report 2015

CFTC Official Calls For Greater Algo Controls
Sarah Krouse – Wall Street Journal

Exchanges Face Pressure to Disclose High-Speed Trader Perks
Silla Brush – Bloomberg

Keynote Address By CFTC Commissioner Sharon Y. Bowen Before ISDA North America Conference

Exchanges should release more information about incentives and other financial perks they offer to lure certain traders to use interest rate, energy and other contracts on their markets, said Sharon Y. Bowen.

Swinburne Dismisses ‘Premature’ Buyside Call For Mifid II Delay (subscription)
Tim Cave – Financial News

A senior European politician has described calls from the UK’s Investment Association to delay Mifid II as “premature”, saying that implementing the vast changes to Europe’s trading rulebook was “never going to be easy”.

CSRC Official The Latest Target Of Beijing’s Stock Probe
See Kit Tang – CNBC

Zhang Yujun, the assistant chairman of CSRC, is being probed for “severe violation of discipline,” according to a statement by the Central Commission for Discipline Inspection late Wednesday. The online statement by the anti-graft watchdog did not provide further details but according to Reuters, disciplinary violations are often used as a euphemism for corruption.

Commodity Brokers Urge Sebi To Exempt Transaction Fee, Charges
Dilip Kumar Jha – Business Standard

With fears emerging among both small and large traders alike, commodity brokers are meeting Sebi next week seeking relaxation in the newly introduced transaction fee and transaction charges.

Read our Premium SEBI-FMC Merger Brief.

The Unraveling of Tom Hayes

Part Four – THE WAITING GAME (subscription)
Part Five – THE TRIAL (subscription)
David Enrich – Wall Street Journal

See also: Part One, Two and Three.

Hong Kong Joins Push For Sustainable Stock Exchanges (subscription)
Christine Chow – SCMP

Private Markets

IFCI Plans To Sell More Stake In NSE Within A Month
The Economic Times

As reported yesterday, IFCI sold 1.5% of its stake in National SE (NSE) to a Mauritius based PE fund for Rs 263.2 crore (USD 39.7 mln), a deal that would value the exchange at Rs 17540 crore (USD 2.63 bln).

Malay Mukherjee, CEO & MD of IFCI said, “The sold NSE stake mainly because we plan to exit from non-core businesses. We have non-core assets valuing Rs 3000 crore (USD 454 mln).”

Read our Premium India – NSE Sales Brief and Exchange Deals Brief.

EPEX SPOT To Develop Certificate Trading System CTS

The Exchange Council of EPEX SPOT has welcomed the EU Commission’s Consultative Communication on the future European electricity market design.

Dalian Commodity Exchange, Ping An Bank Ink Strategic Cooperation Agreement

CFTC Orders Bitcoin Options Trading Platform Operator & CEO to Cease Illegally Offering Bitcoin Options and to Cease Operating a Facility for Trading or Processing of Swaps without Registering

Bitcoin Is Officially a Commodity, According to CFTC
Luke Kawa – Bloomberg

Virtual money is officially a commodity, just like crude oil or wheat.

So says CFTC, which on Thursday announced it had filed and settled charges against Bitcoin exchange Coinflip / derivabit.

“In this order, CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities,” according to the press release.

PLY: QV CFTC licensing LedgerX as a SEF last week.

Alt-Options Launches Bitcoin Derivative Market
Nick Abouzeid – Bitcoin Magazine

Bitcoin Payment Processor BitPay Loses $1.8M In Phishing Hack
Tanaya Macheel – American Banker

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, 63 Moons up 2.7%.


EEX: Wind & Solar Power Data Partly Not Available

EEX experiences repeated outages of the data provision for the expected and actual production of wind and solar power since Sep 16th caused by a delayed data processing on the ENTSO-E platform. This issue is already under investigation by ENTSO-E.

FAO: No updates provided by the exchange til Friday noon – EEX News page here.

Ireland Creates Fintech & Payments Body

The Fintech and Payments Association of Ireland (FPAI) brings together the members of two existing not for profit organisations, Payments Ireland, which was established by Colm Lyon, founder of Realex Payments and the FinTech-Ireland meetup group set up by Morgan Lynch, CEO of start-up Senddr.


Eurex Expands Product Offering On European Government Bonds

Futures contracts on Spanish government bonds available as of 26 October.

Exchanges, Regulators Scramble To Fix ETFs After August Rout
David Michaels – Bloomberg

BATS’ Concannon says U.S. markets can’t handle growth of ETFs. NYSE hires a consultant to examine trading of products.

Citadel Shut Out Of Tradeweb As It Makes US Treasury Move (subscription)
Kris Devasabai & Robert Mackenzie Smith – Risk

Citadel Securities is set to start quoting US Treasuries on Bloomberg’s dealer-to-client trading platform this week but has been blocked from doing so on Tradeweb, thanks to a closely guarded rule book that is said to bar any firm from joining the bank-owned platform unless it is a primary dealer.

Alcoa: LME’s Warehouse Proposals Designed To Cut Queues Could Backfire On Aluminium Market (subscription)
Metal Bulletin

In the letter seen by Metal Bulletin, Alcoa’s Tim Reyes said the exchange itself had said its proposals could increase the potential for manipulation by metal owners to obtain free storage, a rise in storage costs in LME warehouses, and a rise in the price of aluminium traded on LME, Alcoa’s Tim Reyes, President of Alcoa Casting, wrote.

Russian FAS Approves SPIMEX Day-Ahead Launch Date (subscription)

The Russian Federal Antimonopoly Service has approved a 26 October launch date for day-ahead gas trading on the St. Petersburg International Mercantile Exchange (SPIMEX).

ISDA Launches New Industry Initiative For A Derivatives Product Identification Standard

Canadian Securities Regulators Seek Comments On Enhancing Regulation & Transparency In The Fixed Income Market

IIROC Works With CSA To Improve Access To Fixed Income Information

Career Paths

ICE announced that Right Honourable William Hague has joined the Boards of ICE and ICE Futures Europe. Mr. Hague will assume the role of Chairman of ICE Futures Europe in January 2016, succeeding Sir Bob Reid who is retiring from that role after 16 years of service. Sir Bob Reid continues as the Chairman of ICE Clear Europe through 2015.

Mr. Hague served as a Member of the UK Parliament from 1989 to 2015. He entered the UK Cabinet in 1995 and led the Conservative Party from 1997 to 2001. From 2010 to 2014 he served as First Secretary of State and Foreign Secretary and between 2014 and 2015 he was the First Secretary of State and Leader of the House of Commons. He was nominated for a life peerage in August 2015.

PLY: Interesting move probably not unrelated to ICE Europe supremo David Peniket having impeccable Conservative Party links. Mr Hague used to be a McKinsey consultant incidentally.

ITG appointed Bret Goldin as Director, ITG Americas Sales. Prior to joining ITG, Goldin ran Morgan Stanley’s Electronic Trading (MSET) business in Canada.

FOW reports that LSE hired Ramesh Chhabra, the former press secretary to British chancellor of the exchequer George Osborne.

Financial Calendar

Next week

22.09 – LSEG 10.8 pence interim dividend payment

22.09 – CFTC Agricultural Advisory Committee

25.09 – Nasdaq $0.25 quarterly dividend payment

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

Share Notes

Interactive Brokers President Milan Galik sold 12,880 shares on Sep 14, 2015 at $38.28 (bargain $492,951.03).

Lending Club CTO John Macilwaine sold 12,500 shares Monday, September 14th at $12.52 (bargain $156,500.00). He now owns 13,588 shares.

CBOE CEO Edward T. Tilly sold 6,250 shares Tuesday, September 15th at $66.02 (bargain $412,625.00). He now owns 96,849 shares.

Check our Share Notes page in Premium.

Analyst Notes

HSBC Reissued “Hold” Rating On LSE – GBX 2,500 Price Target

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

Other stories

Finra Would Allow Brokers To Block Trades To Protect Seniors (subscription)
Anna Prior – Wall Street Journal

Financial firms that believe an older client is being taken advantage of would be allowed to temporarily block requested disbursements of cash or securities from an account, under a proposal approved Thursday by FINRA’s board.

Amended: IOSCO Publishes Report On Cross-Border Regulation

The International Organization of Securities Commissions (IOSCO) published the final report of the IOSCO Task Force on Cross-Border Regulation (Task Force).

FIA Releases SEF Tracker Report For July

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