September 23 2014

elb2

Real time clearing progress as LME launches CCP powered by Cinnober. Power market consolidation, regulatory confusion, not sure if there are any lies but there are some interviews so somebody may have uttered a ‘porky’ along the way as there is news from multiple markets, various asset classes and of course a dose of the usual hot air where exchange CEOs extemporize without really appreciating the irony of their own comments. Happy scrolling:

Public Markets

LME Clear Announces Successful Launch
LME

LME Clear announced its successful launch yesterday, migrating 100% of the positions of LME members from previous clearer LCH.Clearnet Ltd to its own risk and clearing system, LMEmercury.

Paradigm Shift As Real-Time Clearing Becomes A Reality In Europe
Cinnober

LME has announced the successful launch of its brand new clearinghouse, LME Clear. Swedish supplier and long-term partner, Cinnober Financial Technology, is providing the core technology for real-time, multi-asset clearing and risk management to the exchange.

The new LME Clear system, named LMEmercury, is based on Cinnober’s TRADExpress RealTime Clearing solution, which provides high-performance and multi-asset capabilities and is designed to handle the rapidly-growing demands on clearing and real-time risk management.

German EEX Eyes French Peer Powernext, Focus On Gas
Vera Eckert & Michel Rose – Reuters

EEX plans to take over French peer Powernext, according to a request lodged with the German competition regulator, in a move that could allow them to rival Britain as the region’s leading gas trading hub.

EEX and Powernext confirmed they were planning a tie-up and that it would focus on their gas activities, but declined to say whether it would involve a takeover or to comment further at this stage.

Market Activity Softer In FY15: ASX CEO
Michael Roddan – Business Spectator

AGM comment from the ASX AGM – Chairman and MD and CEO’s addresses – here and presentation Slides – here.

MCX Gets Time Till Nov 2 To Appoint New MD & CEO
Moneycontrol

The MD & CEO post has been lying vacant since the first week of May this year when Manoj Vaish resigned citing health reasons. At present, MCX’s EVP P K Singhal has been given the charge of MD.

Higher Turnover & CEE Position Priorities For WSE
Kamila Wajszczuk – Warsaw Business Journal

In its updated strategy, Warsaw SE (WSE) wants to focus on reversing negative trends in terms of turnover and on expanding its international position, the bourse’s CEO Paweł Tamborski told business daily Parkiet.

Last week, VSE co-head Michael Buhl cited stumbling blocks to a potential merger with GPW, while the WSE CEO said he wanted to present its final position on a proposed tie-up with Vienna bourse operator CEESEG before the end of this month.

PLY: Former junior minister turned government puppet CEO, Pawel Tamborski, tells us nothing we didn’t already know and announces intentions to tackle problems he doesn’t yet appear to have a coherent strategy for but which were already apparent. However, let’s all be clear, Warsaw will be at the epicentre of whatever it is that happens in the New Europe, even if it is unfettered value destruction…

I sympathise with Mr Tamborski that he is under duress to make public utterances but at the same time, given he knew for some time he would be dropped in to the job why didn’t he actually have a coherent strategy ready on all fronts? It only takes a nanosecond to see how much a Vienna merger is a stitch up against shareholder value, so are GPW staff busy being forced to thread camel’s through the eyes of needles? Likewise, being part of a government which stole half the private pension assets may not have helped the initial objective of increasing turnover… The time for words has passed, we need action, although sadly it may be such that it erodes the GPW’s advantage and with it the epicentre of New Europe’s capital markets. Oh and how to improve secondary market turnover – er, anybody read the fee schedule of GPW recently – it makes for painful reading…

Insight – Frankfurt Exchange’s China Dream Turns To Nightmare
Reuters

PLY: A tale of some woe from Frankfurt where the exchange’s efforts to woo China has involved source code transfer and a series of listings which, like many foreign bourses’ experience of Chinese listings has been a touch perplexing. Here’s hoping the Alibaba tale ends happily for one and all, although I still feel uncomfortable with their shareholding structure.

Thomson Reuters Announces Pricing Of US$1 Billion Note Offering
CNW

Thomson Reuters announced the pricing of its offering of US$1 billion of debt securities: US$550 million principal amount of 1.65% notes due 2017, and US$450 million principal amount of 3.85% notes due 2024, expected to close September 29, 2014 to be used for general corporate purposes.

Hedge Funds Keen On China Exchange Link
Bei Hu – Bloomberg

Goldmans Sachs reckons hedge funds may drive initial demand for Shanghai-listed stock via the HK through train – August 25th, HKEx completed connectivity test for Shanghai-Hong Kong stock connect.

Euronext To Partner With Degiro On Dutch Retail Investor Services
MondoVisione

Degiro, a member of the Euronext cash and derivatives markets, will be the first online broker to distribute a range of Euronext’s retail services via its direct channel to its client base, ensuring more efficient and effective communication to the end user.

PLY: Cees Vermaas headed to CME Europe (where he lands in January) with TOM appearing to be gaining momentum all round, Euronext clearly need to stem the bleed, hence this agreement.

Mercuria Registers With Regulator Ahead Of Major Acquisition (subscription)
Sarah Kent – Wall Street Journal

Swiss commodities trader Mercuria Energy Group has registered with the U.K.’s financial regulator as the company nears completion of a transformative deal to buy J.P. Morgan Chase’s physical commodities unit.

Palestine Exchange On FTSE Frontier Market Watch List
MondoVisione

Palestine has been placed on the FTSE watch list for possible promotion to frontier market status within FTSE equity indices.

Sebi Mulls Prudential Governance Norms For Stock Brokers
The Economic Times

After prescribing a new Corporate Governance Code for listed companies, capital markets watchdog Sebi is now mulling over a new set of Prudential Governance Norms for stock brokers.

Private Markets

NSE Chief Woos China’s Financial Institutions, Stock Exchanges
NDTV

As China looks to step up its investments in India after President Xi Jinping’s first visit, India is wooing major Chinese financial institutions like the sovereign wealth funds, which can potentially invest billions of dollars in the lucrative Indian stock market.

Belgian Tax Body: Bitcoin Trades Not Subject To VAT
Coindesk

Belgium’s Federal Public Service Finance (FPS) has issued a new statement finding that certain domestic digital currency transactions are not subject to VAT.

The ruling from the tax body was revealed in an email to local digital exchange Belgacoin, which was concerned it would need to pay VAT on digital currency trades.

PLY: Hooray for a spot of Belgian cryptocurrency enlightenment.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Another flat day for FTIL and MCX.

Technology

Exchange Mergers Boost Tech Costs (subscription)
Joe Parsons – FOW

Exchange consolidation is hiking the cost of technology for clients, Object Trading warned.

For Some High-Speed Firms, It’s No Longer Just About Speed (subscription)
Geoffrey Rogow – Wall Street Journal

The game now in HFT is about making trades that are both fast…and smart, even if it means slowing down the trade slightly.

Products

CME Swaptions Clearing Ready For November Launch (subscription)
Tom Osborn – Risk

CME will begin clearing swaptions contracts as soon as November 3, pending approval from CFTC, but dealers warn the service may not have widespread support in the near term. In particular, banks say it will take time to get comfortable with risk and default management procedures for what would be the most complex OTC products cleared to date.

PLY: AKA bankers say they will do their utmost to maintain their cosy cartel…

Goldman Sachs Files For Active ETFs, Joins Wall Street Bank Trend
Ashley Lau – Reuters

Goldman Sachs has laid the groundwork to launch actively managed exchange-traded funds, becoming the latest Wall Street bank to set its sights on the fast-growing market.

Goldman separately filed late on Friday for regulatory approval to self-index, which would allow Goldman to launch funds based on their own proprietary indexes created in-house.

PLY: Would you trust an actively managed Goldman Sachs ETF developed on their proprietary index? If you answered ’depends who asked for the other side of the trade,’ I would commend your due diligence skills.

Indexes

Nairobi Securities Exchange Joins FTSE Mondo Visione Exchanges Index
MondoVisione

Nairobi Securities Exchange was added to the FTSE Mondo Visione Exchanges Index effective 16 September following its trading debut on 9 September.

BVB Launched BET-TR Index
BVB

BET-TR is a free float market capitalization weighted index of the most liquid companies listed on BVB, to which adjustments are made for dividends distributed by companies included in the index.

Career Paths

MV reports that H.E. Eng. Ibrahim Mehleb, Egyptian Prime Minister issued the decree No. 1635 year 2014 to appoint 2 independent expertise members to the EGX’ BoD.

The statement issued by EGX pointed that the decree to appoint Prof. Ayman Ahmed Rajab, accounting and auditing professor and Dean of the faculty of management; the Arab Academy for Science, Technology & Maritime Transport; and Mr. Ayman Sherif Nour, founder and managing partner of Noor & Taha law firm fulfill EGX board need in accounting, auditing and corporate law specialties.

SEC announced that Jason S. Patil begins work at the agency this week as an Administrative Law Judge.

Financial Calendar

This week

ASX 89.9c dividend payment
CME $0.47 quarterly dividend payment
LSE rights issue – Final day for acceptances and the rump placing
NASDAQ OMX $0.15 quarterly dividend payment

New announcement

SGX Q1 FY2015 results – 21 October 2014

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

Share Notes

ICE Director Jean Marc Forneri sold 1,000 shares Wednesday, September 17th at an average price of $200.00 (bargain $200,000.00). He now owns 18,697 shares. All ICE insider stock transactions are chronicled here.

Charles Schwab EVP James D. Mccool sold 35,000 shares Wednesday, September 17th at an average price of $30.10 (bargain $1,053,500.00). He now owns 84,905 shares.

Other stories

Exclusive Interview With CFTC Chairman Tim Massad
FIA

CFTC chairman Tim Massad covers a number of regulatory issues now pending at the CFTC…

U.S. SEC To Pay $30 Million-Plus In Largest Whistleblower Award
Sarah N. Lynch – Reuters

An anonymous tipster living abroad will be receiving more than $30 million, in the largest whistleblower award ever doled out by U.S. securities regulators as part of a program that aims to incentivize insiders to report wrongdoing.

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