September 23 2016

elb2In Today’s Exchange Invest
Very exciting development as CBOE talks takeover of BATS. ASX defends turf post tech kerfuffle, Euronext CEO talks the French line inferring that the EU is perfection and Britain will be back in mud huts soon. Thomson Reuters buys REDI, NSE appoints independent to report on access row. SEBI staff are upset at being targeted  by FTIL/MCX-SX/MSEI investigations and Indonesian Exchange pushes for dual listings of firms. Meanwhile – it’s been a while… but the bank which seemingly doubles as a poster child for sanction (justified or not) – Barclays – has been fined by the CFTC. Recordkeeping violations apparently, how remarkable.

In BigWorld
The rioting in Charlotte is a very sad blight on the USA. However the good news is that the NASCAR Hall of Fame Museum has sustained only light external damage. Meanwhile in the US Presidential election campaign (seriously is this for real, I mean it isn’t like some kind of reality tv stunt is it? – the Truman Show appears hyper-plausible by comparison), rumours abound that Hillary Clinton has a body double. In which case – wouldn’t it make more sense to have a body double who made better stump speeches?
Meanwhile the Donald’s charity returns suggest he is highly adept at spending other people’s money and taking the credit. Gracious me, sounds like he is a typical exemplar of what passes for government in the modern age…


Public Markets
CBOE Holdings Said in Talks to Buy Exchange Operator Bats Global

PLY: Nope didn’t see that coming either. Many optionalities here and unlikely to be a big antitrust issue (AKA would be 38% US single name options versus 36% currently for the acquisitive NASDAQ). For one thing it makes CBOE something other than an entity priced on the basis of “is CME serious about taking OneChicago into, er, OneChicago?” At the same time, it would move CBOE into various parallel segments which are all additive. Moreover, if CBOE can indulge the BATS legendary panache for parsimony, approach to spending money, it could have an interesting added knock-on to the bottom line.

Again looks like a deal which may be predicated on bank CFOs going “I get the notion that control is good, chief dealer, but the lure of a slug of cool hard cash does things for my balance sheet your day to day activities cannot match.”

Very interesting possibility on the horizon to create a business which on paper would sit at 7th in the public exchange market cap table, above ASX and likely newcomer NSE, a billion shy of Japan and remarkably within a few billion of NASDAQ…

ASX Identifies Failings Behind Its Worst Systems Outage Since 2011
The Sydney Morning Herald

PLY: The ASX report can be read here. My previous comments can be found all week long from here.

Split Ends
The Economist

PLY: Discussing stock splits in the Economist beginning with the ICE’s plans.

Thomson Reuters Strengthens Buy-Side Trading Capabilities With REDI Acquisition
PLY: An interesting catch for Thomson Reuters who seem to be assiduously avoiding the claim to be an exchange while operating all manner of remarkably similar platform type entities…

The Shrinking U.S. Stock Market
Seeking Alpha

PLY: Stock issuance is in trouble. Regulation of capital markets is at all time highs of cost and complexity for issuers. The problem is also deeply afflicting Europe. #Worrisome.

Euronext’s CEO Sees Diminished Role For London After Brexit
PLY: Stephane Boujnah’s criticism of the DB1 purchase of LSE is spot on but his claims of wondrous milk and honey in the EU against al the prevailing facts of relative and outright economic decline, is best understood in the context of French government control of the Euronext entity.

SGX Faced Queries Over Salaries, Trading Outage At AGM
The Straits Times

PLY: Hardly down there with Romanian corporate governance (they do AGMs which make some riots look like tea dances) but there is clearly a swell of frustration around SGX currently and the messaging from the exchange is non-existent.

Banks Said To Plan For Loss Of Euro Clearing After Brexit

“I think it’s a bit of scaremongering,” said David Mercer, CEO of London-based currency trading venue LMAX Exchange.



Private Markets


IDX Seeks Cooperation With International Stock Exchanges

SEBI Renews Metropolitan Stock Exchange Licence Till 2017
Hindu Business Line

Salaries Of TASE Employees Skyrocket


The Tel Aviv Stock Exchange (TASE) today officially began its search for a replacement for retiring CEO Yossi Beinart.



PLY: Salaries may (according to the headline) have skyrocketed (in places) but there is apparently considerable worker disenchantment within TASE.


NSE Submits Concerns To Sebi About Listing On BSE


PLY: NSE still justifiably confused as to why it can only list on a rival market which will I am sure sow a seed of confusion into the minds of the North American investors the exchange is meeting currently.


NSE To Appoint External Auditor To Probe Allegations Of Unfair Algorithmic Access
The Indian Express


PLY: An independent report is a swift response by NSE as it clearly wants to cauterize any speculation as its roadshow hits North America ahead of the planned IPO.


Sebi Staff Body Concerned Over ‘Selective’ Searches
Economic Times


PLY: Nobody wishes any branch of the executive to particularly favour investigating any individuals but at the same time, given what many have felt to be high-handed actions of Sebi in the past, this hopefully will provoke a wake-up call for unionised civil servants that they too must ensure the highest standards of investigation without undue pressure being exerted on anybody.


SA’s New Exchange Brings Stocks To Everyone

PLY: Looking ahead to the October launch of ZAR X.



Special Section: FTI, NSEL, India at the Crossroads


PLY: FTIL down 1.5% MCX up 2%.


ED Attaches FTIL’s Mutual Funds Worth Rs307 crore ($45 million)







Percival Will Deliver Solution To New CSD In Iceland
Craig Donohue of OCC on the Potential For Blockchain
OCC Blog
Please Don’t Call It a Blockchain If It Isn’t One


PLY: Welcome to the Mockchain. Good article by Elaine Ou, on yesterday’s fabulous consultancy work where Accenture somewhat reinvented the wheel only to make it a rectangle.
Hibernia Networks Expands Its Leading, Lowest Latency Network Platform Connects To Emirates
Marketwired (press release)
PLY: DGCX amongst those on the horizon for HFT amongst others in the gulf…


DME Lists Two New Middle East Fuel Oil Derivatives

Repurchase Agreements Between Non-Bank Legal Entities Became Possible On BSE (Baku)
Azerbaijan Business Center



Career Paths
Tel Aviv Stock Exchange CEO, Yossi Beinart’s Resignation And Decision To Form A Selection Committee
PLY: Once again wishing Yossi Beinart all the best.


NASDAQ has appointed John Shay Global Head of Fixed Income and Commodities, reporting to Hans-Ole Jochumsen.
Ontario Securities Commission (OSC) Chairman & CEO Maureen Jensen announced the appointment of Grace Knakowski as Corporate Secretary to the Commission, effective October 3, 2016.
Brexit Lobby’s New Advisory Council Has MEP Pedigree
Financial News (subscription)


PLY: A group engineered by arch Brexiteer  Daniel Hodson and remainer Anthony Belchambers (did they create it during an NLX board meeting I wonder?) has created an advisory panel including some arch remainian figures such as former MEP / LSE director Sharon Bowles and Z/Yen consultancy chairman Michael Mainelli. The board looks like a pragmatic mix.


Tom McMahon has joined HKEx as a consultant, senior advisor on risk management and platform development according to Metal Bulletin.
PLY: Good luck to Tom who has been active in Hong Kong for some years, first with HKMEX and now HKEx.
Following the MCX AGM, Ajai Kumar and Mak Prabhu are no longer directors of the exchange while the SGX AGM passed board changes as noted previously.
PLY: Plaudits to Brad Katsuyama who has been listed in the Fortune Magazine 40 Under 40 listing while IEX are looking for a NY-based: Software Engineer, Cloud.


Are Online Funding Platforms For Startups Breaking The Law?



Other Stories
The FCA’s Role In Promoting Innovation – Speech By Christopher Woolard, Director Of Strategy & Competition, FCA, Delivered At BBA FinTech Banking Conference
Op-Ed: Bitcoin’s Journey to Digital Reserve Currency Status
Bitcoin Magazine
PLY: The fascinating ramifictions of digital currency reducing frational reseve multiplies et al and thus changing our very core banking system – fwiw, as I have noted in the past (like 15 years ago in the past).

CFTC Orders United Kingdom-Based Barclays Bank PLC To Pay $500,000 For Recordkeeping Violations


PLY: I can’t say it’s a welcome return but if the US regulators didn’t have Barclays, what would they find to occupy so much time?

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