September 24 2014

elb2

FTIL confirms will exit exchange business to concentrate on vendor activities. Deal sheep slaughtered as Warsaw finally sees sense and abandons the world’s worst merger proposal. Vienna abandoned at altar by sudden outbreak of totalitarian government pragmatism. Exchange Invest celebrates having been the first to point out the folly of this proposal and applauds the GPW for being able to say no to a daft deal…

There’s lots more in today’s issue, all worth a scroll, from SIP to NSE listing to, well actually take a look…

Public Markets

WSE Focuses On Organic Growth
WSE

WSE Management Board is to focus on the Polish capital market and to fully leverage its potential; therefore, WSE is not considering a capital alliance with CEESEG at this time.

PLY: Hooray! I felt like a single voice of reason in the public domain at first, as all the usual fee-sheep followed the notion that any deal is a good one. This dreadful proposal has rightly been shelved. Now it is time to focus on the potential of WSE itself. Can CEO Tamborski can deliver value having correctly recognised that the Vienna deal was wrong, wrong, wrong? There are vast opportunities as well as threats domestically to the Polish exchange right now and there has been a lot of unnecessary government upheaval this year which has (fortunately, in the M&A sense) left us with no change…

VSE Says Warsaw Tie-Up One Of Many Options
Angelika Gruber – Reuters

Vienna SE still sees a tie-up with its Warsaw counterpart as an option:

“This remains one of many options for the Vienna Exchange,” a spokesman in Vienna said.

PLY: The unmitigated stubbornness of the Vienna management demonstrates exactly why their market is adrift. Wholesale reform is required but the banks are too spineless to have management that might actually add value and endanger the status quo – a very European paradox in other words…

FTIL To Exit Exchange Business
Business Standard
FTIL To Focus On Core Software Business
The Hindu

FTIL will focus on its core software business, and chart a new path for growth, Venkat Chary, Chairman and independent NED, said.

PLY: Cue wave of bourses saying “No no dear Jignesh do please reconsider, we have all so enjoyed the value you brought to…oh no, hold on a moment…” #Shahdenfreude.

Nasdaq To Administer SIP
Herbert Lash – Reuters

Nasdaq OMX won a contract to administer billing and other chores for the SIP data feed system but a contract to build and manage the system remains undecided.

MCX Seeks More Time To Cut Stake In Arms
The Hindu Business Line

MCX has written another letter to market regulator SEBI seeking more time to offload its holding in the MCX-SX and MCX-SX Clearing Corporation. A similar request sent by MCX in August was rejected by SEBI.

However, this time around, the commodity exchange is hopeful of getting approval from the regulator, as its promoter FTIL is close to selling the residual 15% stake and exiting the exchange completely after being declared not ‘fit and proper’ to hold stake in stock exchanges.

Apart from the 4.99% equity holding, MCX has 63.41 crore warrants in MCX-SX, which when converted would take its holding in the stock exchange to 33%.

As reported on July 21st, FTIL entered into a share purchase agreement (SPA) to sell a 15% stake in MCX to Kotak Mahindra Bank Ltd. (KMBL) for a total consideration of Rs. 459 crore ($76.1 million).

MCX Trying To Get Nod For Contracts For Next Year
Business Standard

MCX’s 12th AGM on Tuesday, the company said its management was making all efforts to sign a software technology contract agreement with FTIL, its former promoter, so that the exchange secured approval to launch contracts for next year.

HKEx’s Stance On Voting Rights Leaves It Out In The Cold (subscription)
Jennifer Hughes – Financial Times

HKEx itself falls a far less fun task: figuring out how many Alibabas it is prepared to lose for the sake of its one-share-one-vote principle.

PLY: A dreadful precedent has been set by Alibaba building on the Google offering and others – one share one vote is a must for civilised markets and Hong Kong will be in the eye of a storm soon if it allows its high standards to slip in this regard.

SGX Must Overcome Market’s Cynicism & Scepticism
R Sivanithy – Business Times
Innovation, Connectivity Needed For SGX To Hold Its Own: Tharman
Dylan Loh – Channel Asia

The Deputy Prime Minister and Finance Minister said SGX has a lead in certain areas, its location in a neutral, well-regulated country will help it to ride the next wave of prosperity in Asia.

New SGX Database May Not Boost Retail Participation Significantly: Analysts
Wong Siew Ying – Channel Asia

SGX StockFacts provides more information on all SGX-listed companies, but retail interest has to do with sentiment, and there is also a need for more investor education programmes, say analysts.

U.A.E. To Start Market For Private Joint Stock Companies
Arif Sharif & Sarmad Khan – Bloomberg

UAE exchanges will start a platform listing private joint stock companies.

SIX Securities Services & Euroclear Join Forces For Global Fund Services
MondoVisione

TWSE Renews MOU With WSE
MondoVisione

Taiwan SE (TWSE) has renewed its MoU with the Warsaw SE (WSE) that was originally signed in 2008

PLY: Did this follow Young’s Law of MOUs aka they aren’t worth the air miles generated in their signing?

MOEX Meeting Of Supervisory Board
MondoVisione

The Supervisory Board of MOEX met on 23 September.

Derivatives Market Transparency – Three Entities Recognized As Trade Repositories In Québec
MondoVisione

Effective October 31, 2014, derivatives market participants in Québec must report their data to one of three trade repositories that have now been recognized by the AMF, namely, CME, DTCC Data Repository and ICE Trade Vault.

Barclays Will ‘Robustly’ Defend Dark Pool Allegations: CEO
Michelle Fox – CNBC

Barclays Group CEO Antony Jenkins told CNBC Monday: “We believe our defense is strong, and we intend to defend robustly those allegations that were made against us,” he said in an interview with “Closing Bell.”

Barclays filed a motion in July for the case to be dismissed after they were sued by NY AG in June.

Derivatives Industry Calls Global Reporting Plan A Dream
Huw Jones – Reuters

Plans for a global snapshot of risks in the financial derivatives market are a “dream” that must not detract regulators from tackling discrepancies in trade reporting, a top industry official said on Tuesday.

Cross-Border Swap Dispute Risks Trade War, CFTC’s Giancarlo Says
Silla Brush – Bloomberg

U.S. and European regulators risk a permanent breakdown in financial markets if they can’t end a dispute over transatlantic oversight of the $700 trillion swaps industry noted Commissioner J. Christopher Giancarlo, in his first speech since joining the CFTC in June.

PLY: Suggesting a more pragmatic approach by Giancarlo than the previously aggressive imperial standpoint of the CFTC.

O’Malia Urges CFTC To Rethink SEF Registration Rules
Michael Watt – FX Week

Scott O’Malia, the new CEO of ISDA, has urged his former colleagues at CFTC to rethink the Dodd-Frank rules on SEF registration amid concerns they are magnifying market fragmentation.

Private Markets

SEBI Approves New Name For MCX-SX – Metropolitan Stock Exchange Of India Ltd (mSXI)
MondoVisione

MCX Stock Exchange (MCX-SX) has received approval from Capital Market Regulator SEBI to change its name and operate under the new iconic name, ‘Metropolitan Stock Exchange of India Ltd’, abbreviated as ‘mSXI’.

PLY: The Metropolitan Stock Exchange strikes out to identify itself as entirely separate from those agricultural yokels of the Multi-Commodity Exchange with which they once shared a parent… The deployment of the word “iconic” marks for me a new low in the already dismally over-hyped world of exchange media communication. Meanwhile the mnemonic mSXI looks like a teenage SMS code suggesting an element of ardour.

NSE To Get Listed At ‘Most Opportune Time’, Says Chitra Ramkrishna
The Economic Times

Emphasising its commitment to being listed, the CEO of National SE (NSE) has said the bourse would do so at the “most opportune time”.

PLY: Looking forward to this very exciting listing whenever Ms Ramkrishna and her team bring NSE to market.

Indonesia Looks To Retail Investors Of The Future (subscription)
Ben Bland – Financial Times

He is not a securities litigator or quantitative analyst, but Stephanus Cahyanto Kristiadi has one of the toughest jobs in global capital markets: turning risk-averse Indonesian housewives, students and noodle sellers into the equity investors of the future.

He trains hundreds of retail investors every year at the small IDX office in Semarang, a fast-growing port city in Central Java, and one of 17 locations outside Jakarta where the exchange is promoting the under-developed investment industry.

Qatar Bourse To Consult Market On Improving Liquidity
Reuters

Qatar SE said it would consult with market participants and issuers next month on improving liquidity in the market, and review the way in which its indexes are calculated.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat as FTIL tumbles 2% on the back of news it is pulling out of the exchange business.

Technology

TMX Quantum XA Launched On TSX Venture Exchange
MondoVisione

TMX announced the successful launch of its high performance equity trading engine, TMX Quantum XA on TSX Venture Exchange.

ConvergEx Teams Up With IEX Group To Deliver Dynamic Order Routing
Forex Magnates

ConvergEx has announced a dynamic order routing strategy which allows its clients to transfer a determined percentage of any order to be sent for execution on the IEX ATS.

Peru’s BVL Exchange Selects VeriFIX Automated Testing Tools
Finextra

CameronTec Group announced the Peruvian Exchange, Bolsa de Valores de Lima (BVL), has selected VeriFIX automated testing tools to optimize trading opportunities available on its new Millennium trading platform.

DealVector Launches A Big, Simple Idea: A BWIC Marketplace
MondoVisione

DealVector, provider of the only secure electronic communication network to allow fixed income professionals to directly connect with authenticated participants in specific bonds, today announced the launch of their BWIC Board, a marketplace for BWICs where investors can view bid requests from across the market, set alerts for specific bonds or bond criteria, and respond directly to the broker of their choice.

Products

LME ‘Absolutely Committed’ To Aluminium Premium Contracts (subscription)
Metal Bulletin

LME is “absolutely committed” to introducing its proposed aluminium premium contract.

MOEX Ready To Start Hong Kong Dollar-Ruble Trade
Russian Radio

MOEX is ready to launch trading of the Hong Kong dollar-Russian ruble currency pairconducting spot and swap deals.

US Corporate Bond Traders Go Electronic (subscription)
Tracy Alloway & Michael Mackenzie – Financial Times

Regulators Back Widening Of FX Fixing Window To Five Minutes: Sources
Patrick Graham – Reuters

Global regulators have decided to back a widening to five minutes of the 60-second window during which daily currency reference rates are fixed, as part of industry efforts to overhaul the world’s biggest market.

Indexes

Exceed, Nasdaq Ally for Structured Investment Indexes, Data Distribution (subscription)
Faye Kilburn – Waters Technology

New York-based boutique financial services firm Exceed Investments is launching a new family of indexes, dubbed the Nasdaq Exceed Structured Indexes, in partnership with Nasdaq OMX

Career Paths

Bloomberg reports that Goldman Sachs’ European head of spot FX trading, Mitesh Parikh, is leaving after 12 years to join a hedge-fund firm.

SEC announced the appointment of Liban Jama as director of the Atlanta Regional Office, where he will oversee enforcement and examinations in a region covering five states.

SEC announced that Rhea Kemble Dignam has been named as senior counsel to the director of the Office of Compliance Inspections and Examinations (OCIE).

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 CTO Edwin D. Marcial sold 3,500 shares on Wednesday, September 17th at an average price of $200.00 (bargain $700,000.00). He now owns 21,911 shares. All ICE insider stock transactions are chronicled here.

Interactive Brokers SVP Milan Galik sold 1,800 shares Monday, September 22nd at an average price of $25.69 (bargain $46,242.00). He now owns 717,617 shares. Mr. Galik’s regular sales are chronicled on this specific page.

Crowdfunding

CrowdStreet Raises $800,000 To Bring Crowdfunding To Real Estate
Oregon Live

Portland startup CrowdStreet reported Tuesday has raised $800,000 to help connect real estate developers with well-heeled investors, project by project.

Other stories

Barclays Fined Twice In One Day For Compliance Failures
Alan Katz – Bloomberg

Barclays was fined twice in one day for client account failures in the U.K. and the U.S., hurting the bank’s effort to rehabilitate a tarnished image. It agreed to pay a total of $77 million in penalties.

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