September 25 2015

What a week or two! Apologies if your mail is languishing in my inbox, I will catch up by early next week! At the same time, a marvellous fortnight with an epic “Young Markets” and a magnificent “Burgenstock” – both events to return bigger and better with the momentum from this year. Meanwhile, thanks so much to those across the world who love baseball or merely admired Yogi Berra, I am glad yesterday’s tribute pith substitution was so universally popular.

Today in Exchange Invest, Ukrainians buying back MOEX stakes in local exchanges. Lots of new ways the blob seeks to manipulate markets from FTT for migration to Romania’s regulator pushing exchange mergers and much more…

Public Markets

Ukrainian Investors Plan To Buy MOEX’s Stakes In PFTS & Ukrainian Exchange
Reuters

NSSMC (Ukraine’s National Securities and Stock Market Commission) received a statement from Stock company Favorit and Investment Capital Ukraine to buy MOEX’s stake in PFTS, and from Dragon Capital and Univer Capital for the purchase of MOEX’s stake in Ukrainian Exchange. MOEX holds 50% plus 1 share in PFTS and 43.08% in Ukrainian Exchange.

FAO: MOEX Supervisory Board approved management’s proposal to exit the Group’s subsidiaries in Ukraine and to potentially participate in the capital of a new Russian credit rating agency.

LCG Capital Group Holdings Posts Substantial H1 Loss Amid Restructuring
Victor Golovtchenko – Finance Magnates

In H1 2015 LCG Capital Group posted an adjusted loss before tax totaling £9.9 million ($15.1 million). Main causes – increased expenditure on new staff, the Swiss National Bank event and additional technology infrastructure spending.

UN Official: EU Needs FTT To Help Migrants
Zoltan Simon – Bloomberg

EU should impose a 0.1% tax on the trade of stocks and bonds and a 0.01% tax on the trade of derivative contracts as part of a “Marshall Plan” to help the continent deal with a refugee crisis, UN Undersecretary-General Philippe Douste-Blazy said.

Read our Premium EU FTT Brief Part 2.

PLY: Once again the perfidy of the blob is obvious. The banker tax is being modified from its original flawed purpose even before it can be implemented.

Regional CCP To Boost CEE Local Capital Markets
MondoVisione

The creation of a regional CCP across CEE will drive the development of capital markets and economic growth in the region, a report by EBRD and the management consultancy Oliver Wyman has found.

PLY: An interesting development as EBRD looks to create a consolidated CCP for the markets east of the Oder. Interesting.

Sibex AGM Resolutions
Sibex

Among others:

– empowered the BoD for approving the regulations regarding the organization and functioning of the regulated energy derivatives market with underlying the indices of spot electricity market,

– empowered BoD to initiate and hold discussions with Bucharest SE (BVB) in view of a potential cooperation, including discussions regarding aspects related to a merger and subsequently to present the results of the said discussions within a General Shareholders Meeting

– gave up the exercise of the court action for damages against the former Board Member Sima Cristian, as decided further to OGSM resolution no.VI dated November 19, 2012.

PLY: The clock counts down to the end of Mr Sima’s 5 year ban – will he endeavour to make a return? Meanwhile merging SIBEX with BvB remains a flawed construct but is now being openly pushed by the local regulator…

Commodities Traders Brace For New European Rules (subscription)
Sarah Kent & Georgi Kantchev – Wall Street Journal

A final draft of expanded rules governing the EU’s oversight of financial markets is expected to extend its authority over firms that focus on trading in oil, farm products, industrial metals like copper and a host of other commodities.

PLY: The blob expands its remit without having the resources to fund its existing responsibilities…

EC To Launch Sweeping Review Of Post-Crisis Regulation (subscription)
James Rundle, Anna Irrera & Fareed Sahloul – Financial News

The European Commission is to launch a fresh, all-encompassing review of regulatory changes made in response to the financial crisis, as part of its push towards a CMU – a move that could ultimately see changes made to huge pieces of legislation, including Mifid II.

Read our Premium EU CMU Brief.

PLY: Massive deregulation is the only workable way forward but this is unlikely to be the net result of the blob’s prevarications, alas.

ASX To Open Office In Hong Kong
ASX

Headed by Asian Business Development Manager, Mr James Keeley.

ATHEX-Cyprus SE MoU Regarding The Latter’s Markets Clearing From ATHEXClear
Capital

ITG RFQ-hub Expands Broker Network & Client Roster
ITG

CFTC Grants Nodal Clear Registration As A DCO
CFTC

Statement Of CFTC Chairman Timothy G. Massad Regarding Nodal Clear, LLC Registration As A Derivatives Clearing Organization
MondoVisione

Private Markets

Fanya Exchange’s 36 Bln Yuan Default ‘Tip Of Iceberg’ In China (subscription)
Xie Yu – SCMP

Rhodium and steel to garlic and onion, you name it, they trade it. Hundreds of these so-called commodity exchanges, which have mushroomed across the mainland in a regulatory void and attracted 1 trillion yuan in investments, are now under the microscope.

Beijing this week was treated to a rare sight of protesting investors wielding banners outside the office of the country’s top securities authority, complaining they were duped by the Fanya Metals Exchange in Yunnan province.

But Fanya, say industry insiders, is only the tip of the iceberg.

“There are at least 400 such exchange platforms in China, managing roughly one trillion yuan of assets,” said Wang Hongying, head of the China Financial Derivatives Investment Research Institute. “Local governments have been very supportive of these exchanges as their turnover adds to the local GDP data.”

CFTC Settles with TeraExchange For Failing To Enforce Prohibitions On Wash Trading And Prearranged Trading In Bitcoin Swap
CFTC

CFTC Charges Tera Exchange For Wash Trading On Bitcoin Derivatives Platform
Leon Pick – Finance Magnates

CFTC Acts Against Bitcoin Trade Platform (subscription)
Joe Rennison – Financial Times

Dissenting Statement By CFTC Commissioner Sharon Y. Bowen Regarding TeraExchange
MondoVisione

CFTC has charged bitcoin derivatives platform Tera Exchange for failing to enforce prohibitions against circular trading schemes. This is the third this year against bitcoin venues following the SEC’s move against Sand Hill Exchange, which led to a $20,000 penalty, and CFTC’s action against CoinFlip.

PLY: Sharon Bowen’s position as eager to punish wrongdoing is clear from her statement of dissent:

“I believe fictitious trading deserves a penalty. Tera Exchange facilitated wash trading and prearranged trading in violation of the Commodity Exchange Act. That is why we brought this case. I fundamentally disagree with the notion that they deserve no penalty. Accordingly, I dissent.”

Dividend News

MOEX Supervisory Board approved a new dividend policy, raising the payout floor to 55% of the Group’s net profit under IFRS.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX 936.10 up 1.5%, 63 Moons flat.

Technology

Wall Street Firms Turning To Social Media Analytics, Focusing On 5 Specific Approaches To Mine Data: TABB
MondoVisione

Products

Euronext Again Delays Volatility Launch (subscription)
Alice Attwood – FOW

Euronext has delayed the launch of its new volatility contracts for the second time.

BSE To Enter Commodities Markets
Ashley Coutinho – Business Standard

BSE will apply to Sebi for a commodities trading platform, after Sebi’s merger on Monday with FMC.

India – Norms For Agri Commodity Derivatives May Be Tightened
Rajesh Bhayani – Business Standard

With SEBI set to regulate commodity derivatives from Monday, it is considering strengthening the norms relating to risk management for agricultural commodities derivatives, which account for a fifth of overall volume.

Santiago Bourse Sees Derivatives As Answer To Slump In Trading
Javiera Quiroga & Eduardo Thomson – Bloomberg

Santiago exchange is planning to create stock options as trading volumes slump to a 10-year low.

Cargill Settles “Wash Sales” Probe (subscription)
Gregory Meyer – Financial Times

CFTC ordered a Mexico-based subsidiary to pay $500,000 for executing “wash sales” on the CBOT and KCBT between March 2010 and August 2014.

Career Paths

Five More Years For Esma’s Maijoor (subscription)
Anna Irrera – Financial News

The board of supervisors of ESMA on Thursday decided to extend the terms of both Steven Maijoor and executive director Verena Ross for another five years.

Press release here.

Mr. Buliga Mihai was elected as member in Sibex BoD.

SMH reports that Macquarie Group appointed Peter Warne as Chairman. CEO Nicholas Moore will remain at the helm for at least another year.

The new ASX office in Hong Kong, due to open on Oct. 1st, will be headed by Asian Business Development Manager, Mr James Keeley.

Financial Calendar

Next week

30.09 – ICE $0.75 dividend for Q3 2015 payment

30.09 – ASX AGM

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

Share Notes

ICE General Counsel Johnathan H Short sold 2,986 shares on Sep 22, 2015 at $226.72 (bargain $676,993.69).

Interactive Brokers Vice Chairman Earl H. Nemser sold 2,605 shares Wednesday, September 23rd at $39.09 (bargain $101,829.45).

Check our Share Notes section in Premium.

Analyst Notes

LSE “Neutral” Rating Reissued By Macquarie – GBX 2,468 Price Target

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

Crowdfunding

Funding Circle Plans To Launch London-Listed Fund, Raise 150 Mln Pounds
Reuters

Prosper Marketplace Adds to Lending Services With BillGuard Acquisition
Michael J. de la Merced – NY Times

Prosper is buying BillGuard, a start-up that helps customers manage their money and protect their financial identity.

The transaction, which is valued at about $30 million, is the latest move by Prosper to augment its services as it competes in the popular online lending industry.

Harmoney Lands $200 Million To Launch P2P Lending Business In Australia
Rob Stock – Stuff

P2P lender Harmoney has secured $200 million in funding to help its launch into Australia. The company was the first to get a P2P lending license in New Zealand