September 23 2015

Burgenstock 2015 - 468x60

elb2 Delighted to have just completed a terrific Crossfire panel which was enlivened by the brilliant presence of CME CEO Phupinder Gill, NSE CEO Chitra Ramkrishna, ICE Europe COO David Peniket, Nasdaq Group SVP Magnus Billing and former SwX CEO & FESE President Christian Katz.  Crossfire brought discord on open access (unsurprisingly) alongside unanimously enthusiastic discussion concerning customer-centric initiatives delivering value across a vast global market chain. My personal thanks to all the panellists who enlivened an enthusiastic audience in Geneva this morning. The proof is out there this morning. By the banks of Lake Geneva, the SFOA and their showcase Burgenstock meeting is bouncing back, saved by Otto Naegeli and now pushed further forward by Chairman Dan Day-Robinson. My thanks for the invitation, it is great to be back.

Public Markets

LSE’s Sale Of Russell Investments To Citic May Collapse
Cathy Kit Ching Chan, Aaron Kirchfeld & John Detrixhe – Bloomberg

The plunge in the Chinese stock market since mid-June, as well as investigations into some Citic Securities executives, have derailed discussions. China’s biggest listed brokerage had been in advanced talks to buy the fund-management business for about $1.8 billion

Read our Premium LSE – Frank Russell Deal Brief.

What Would A U.K.-China Stock Exchange Look Like?
Wall Street Journal

Plan To Link British & Chinese Stock Markets Faces Hurdles (subscription)
Philip Stafford – Financial Times

U.K. Treasury chief George Osborne used his trip to China this week to outline plans for the two countries to look at ways to “formally connect” their stock markets in a move aimed at forging deeper economic ties. Here is what you need to know.

Read our Premium China Capital Markets Transformation Brief – Main File.

PLY: For those expecting a low latency happy ending…they have clearly never encountered the dynamics of a trade mission speech.

Germany, Belgium Consider Transaction Tax Impact On Economy
Huw Jones – Reuters

PLY: The joke we heard from the politically incorrect wing of the Frankfurt dealing rooms was “How many stock transactions does it take to pay for an economic migrant?” …Curiously enough all the other jokes concern Volkswagen.

Read our Premium EU FTT Brief Part 2.

Industry Warns Over Failure To Reach EU-U.S. Deal On Derivatives
Huw Jones – Reuters

“So far, with respect to the clearing issue, the damage has been contained by the holding action of the commission,” said Eric Litvack, Chairman of ISDA.

Liquidity Rules Proposed On Outflow Fears (subscription)
Joe Rennison – Financial Times

US financial regulators voted on Tuesday to strengthen rules for mutual funds and exchange traded funds to minimise the risk that financial institutions may not return money to investors when hit with severe redemptions.

ESMA Says Too Soon To Intervene On Market Liquidity

Several factors affect market liquidity and it was too early to consider regulatory intervention, Steven Maijoor, ESMA Chairman said on Tuesday as its U.S. counterpart proposes new rules.

SEC said mutual funds and ETFs will be required to create new programs to better manage their liquidity under a plan it proposed on Tuesday.

No Consensus Over Stopping Clearers Becoming ‘Too Big To Fail’
Huw Jones – Reuters

SGX Faces Test As China-led Boom Fades
Anshuman Daga & Saikat Chatterjee – Reuters

Loh Boon Chye, the new head of SGX, which was hit hard in its derivatives trading by China’s economic slowdown, could face his toughest questions yet at the AGM as pressure mounts to find new sources of revenue.

Russia Now Monitors Speed Traders For ‘Unscrupulous’ Behavior
Ksenia Galouchko & Vladimir Kuznetsov – Bloomberg

Bank of Russia is monitoring the nation’s financial markets to ensure high-frequency traders aren’t using unfair practices.

The regulator’s interest was piqued by an increase in HFT, which accounts for about half of stock trading at MOEX, according to Valeriy Lyakh, the head of the market violations monitoring department at the central bank.

Whistleblower On Credit Suisse Dark Pool Says He’ll Ask SEC For Millions
Steve Goldstein – MarketWatch

With reports that Credit Suisse may pay tens of millions of dollars to settle allegations of wrongdoing in the operation of its dark pool, the man who tipped off the agency says he’s planning to ask for a “whistleblower” award.

Rich Gates, the founder of fund manager TFS Capital, said he’s planning to apply for a whistleblower reward after the agency announces its penalty against Credit Suisse.

BATS Rule Could Work “Across Markets” (subscription)
Alice Attwood – FOW

SEC is considering the exchange’s Client Suspension Rule.

Private Markets

Shanghai Futures Exchange Moves To Levy Fees On Same-Day Trading
Business Times

Shanghai Futures Exchange is from Tuesday charging fees for closing nickel positions on the same day they are opened, part of a series of measures by China to curb speculation in futures markets.

IDX Considers Delaying Free-Float Rule Change (subscription)
Avantika Chilkoti – Financial Times

The Indonesian stock exchange (IDX) is considering pushing back its deadline on new free-float requirements, potentially deferring trillions of rupiah worth of share sales, in the face of market volatility in Southeast Asia’s largest economy.

Barry Silbert: Private Blockchains Will ‘Capitulate’ To Bitcoin
Pete Rizzo – CoinDesk

Wall Street is increasingly expressing an enthusiasm for applications of bitcoin and blockchain technology, but according to venture capitalist Barry Silbert, the attention of the traditional financial community has so far fallen on its more problematic implementations.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX off 1.5%, 63 Moons (FTIL) up 1%.


FactSet Research Agrees To Buy Portware For $265 Million In Cash
Steve Dickson – Bloomberg

PLY: Delighted to hear of this successful sale and congratulations to Alfred Eskandar and his team.

LME To Launch System To Better Track Metals After Qingdao Fraud

LME Shield will launch in December and will allow the exchange to provide electronic receipts for metal stored outside its system, according to Matt Chamberlain, LME head of business development.

This comes in response to a financing fraud in China that surfaced last June, when a private metals trading firm, Decheng Mining, allegedly duplicated warehouse certificates stored at Qingdao to pledge a metal cargo multiple times as collateral for bank loans.

Fidessa Establishes Partner Programme

Fidessa launched a Partnership Program which enables selected third parties to integrate their services directly into Fidessa’s global trading workflow platform.

BATS Successfully Operates U.S. Businesses From Local Disaster Recovery Site as Part of Business Continuity Planning Process

An Early Lending Club Investor On The Future Of FinTech
Maureen Farrell – Wall Street Journal

In the fast-growing financial-technology sector, LendingClub was one of the first firms to create a massive online marketplace of borrowers and lenders. And Dan Ciporin, a general partner at the venture-capital firm Canaan Partners, was one of Lending Club’s first investors.

Bank of America Files Patent for Cryptocurrency Wire Transfer System
Pete Rizzo – CoinDesk

The patent, filed on 17th March, 2014, and published 17th September, seeks to protect a system by which electronic funds could be sent between customer accounts using the underlying blockchain of a given cryptocurrency as the rails for payment.


Commodity Traders Given Breathing Room (subscription)
Gregory Meyer – Financial Times

CFTC proposed to change one aspect of long-debated rules on commodity position limits, or caps on speculative holdings that were mandated by the Dodd-Frank financial reform. The regulation has been contentious, even after the collapse in commodity prices.

CFTC Approves Supplement To Proposed Rulemaking To Modify The Aggregation Provisions Of Its Position Limit Rules

EEX To Launch UK Power Futures On 16 November 2015

Need To Build New Warehouses To Curb Price Swings: FMC


IISL To Rebrand Its Indices; CNX Nifty To Be Renamed Nifty 50
The Economic Times

India Index Services & Products Limited (IISL) (NSE group) has decided to rebrand its flagship ‘CNX Nifty’ index as ‘Nifty 50’ besides renaming all its other existing indices from November 9.  The company will rebrand all its existing indices to include ‘Nifty’ in their names as against the name ‘CNX’ used currently.

Career Paths

DTCC appointed Mark Wetjen as MD. Mr. Wetjen will join on Sep 28, 2015, and will be based in Washington, D.C. He will report to Larry Thompson, Vice Chairman of DTCC and General Counsel.

Mr. Wetjen previously served as Commissioner on CFTC from October 2011 to August 2015, including 5 months as Acting Chairman.

FCA Makes Final Appointment To ExCo With Georgina Philippou As COO

FCA Names Former Stockbroker As COO (subscription)
Lindsay Fortado & Caroline Binham – Financial Times

FCA named Georgina Philippou as its COO after she was passed over for the top enforcement job, finalising the latest round of executive hires following a strategy review.

LME appointed four new members to its Steel Committee as it moves closer to the launch of two new ferrous contracts – steel scrap and steel rebar – in November.

The new members are:

Spencer Johnson, INTL FCStone

Phillip Killicoat, Goldman Sachs Commodities

Gianpiero Repole, Liberty Commodities

William Schmiedel, Sims Group Global Trade Corporation

LME also appointed Christian Schirmeister (previously at JP Morgan and Metallgesellschaft AG) as a senior consultant in its Product Development team.

Reuters reports that China’s Communist Party has sacked Zhang Yujun, the assistant Chairman CSRC, days after it was announced he was the subject of a graft probe. Yujun was under investigation (reported here) for suspected “serious violation of discipline”, using the euphemism it employs for corruption.

SEC named Lara Shalov Mehraban as Associate Regional Director for Enforcement in the agency’s New York Regional Office.

Ipreo, a leading global provider of market intelligence and productivity solutions to corporate and financial services professionals, announced that it has hired Ronnie West as EVP and MD of Global Human Resources.

Financial Calendar

23.09 – SEC Advisory Committee on Small and Emerging Companies – agenda here.

25.09 – Nasdaq $0.25 quarterly dividend payment

New announcement

SGX Q1 Results FY2016 – 21 October 2015

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

Share Notes

Interactive Brokers Chief Information Officer Thomas A.J. Frank sold 12,970 shares on Sep 18, 2015 at $39.01 (bargain  $506,041.56).

Analyst Notes

NASDAQ OMX Upgraded By Zacks From “Hold” To “Buy” – $57.00 Price Objective

BNP Paribas Reaffirmed “Neutral” Rating On Betfair – GBX 3,000 Price Objective

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

Other stories

Financial Stability Board: Progress Report On Work To Enhance CCP Resilience

BVB Launches New Corporate Governance Code

ESMA’s Chairman, Steven Maijoor, Gives ISDA Keynote Speech: Clearing The Way Towards An OTC Derivatives Union

Statement On Open-End Fund Liquidity Risk Management Programs & Swing Pricing, SEC Chair Mary Jo White

Statement SEC Commissioner Kara M. Stein On Open-End Fund Liquidity Risk Management Programs & Swing Pricing

Statement At Same Open Meeting: SEC Commissioner Michael S. Piwowar

Statement At Same Meeting: SEC Commissioner Daniel M. Gallagher

Statement Of CFTC Chairman Timothy Massad On The Proposed Rulemaking To Modify the Aggregation Provisions Of Position Limit Rules

Statement Of CFTC Commissioner J. Christopher Giancarlo

Opening Statement By CFTC Chairman Timothy Massad Before The Agricultural Advisory Committee Meeting

Statement of CFTC Commissioner J. Christopher Giancarlo

Statement Of CFTC Commissioner Sharon Y. Bowen


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