September 28 2015

elb2PLY: In the event of a CCP failure, nationalisation is an option, EU considers. Welcome to the newly merged SEBI-FMC unitary regulator for India’s equity and commodity markets. Massive car crash of lawsuits alleging rigged Bond Issuance process in US Treasuries as some practitioners consider an EU rule bonfire…

…and there’s more, happy scrolling:

Public Markets

AIM Listing of Plus500 on Hold Due to Pending FCA Approval
Victor Golovtchenko – Finance Magnates

Read our Premium Plus500 Turmoil & Deal – Brief – Part 2.


Nationalizing A Failed Clearing House An Option: EU Document
Huw Jones – Reuters

PLY: if the waterfall cascades to chaos how much hope have we the government’s already indebted agencies can credibly be the counterparty, of last resort?


Finance Industry Readies EU Regulatory Hit List (subscription)
Anna Irrera, Mark Cobley & Mike Foster – Financial News

The financial sector is drawing up a list of EU regulations it wants abolished or changed following a “very welcome” plan by the European Commission to review rules brought in since the financial crisis.

PLY: As becomes an industry of microspecificists, the solutions here appear to be relatively minor tinkerings. What is generally required is a broad bonfire of rules to make life simpler, with a coordinated recycling of national gold-plating too. Rome wasn’t burnt in a day but we live in hope the EU might manage to work up a bit of a bonfire in anticipation of CMU. However, this process must take place. Without some form of deregulation, markets will become sclerotic amidst what is already an ingrained sclerosis of growth in the Eurozone economy…before we get back to my regular point that no regulator can afford to police the burden of rules they already have, anyway.


UNAVISTA & DTCC, Partner To Provide MIFIR Reporting Service For Clients

BSE Gets Shareholders’ Nod To List Its Shares
The Hindu Business Line

At BSE AGM on Friday shareholders approved the listing  of its shares, together with a resolution to allow those with more than 10% stake to sell the same through the offer-for-sale mechanism. According to SEBI norms, a stock exchange’s shares cannot be listed on its own trading platform. Besides, prior approvals from SEBI and RBI are also required.

Previous discussions on BSE’s IPO here and here.

PLY: The debate is moving forward, perhaps really only inch by inch but a new future where free markets sit at the epicentre of, well, free markets, is coming closer in India, albeit with a lot of debate still to be had…

FMC Merges With SEBI
The Hindu

From Monday, FMC Under Sebi Umbrella
Indian Express

What Will Be The Impact Of FMC-Sebi Merger?

SEBI regulations do not allow brokers to undertake any other activity. Currently, many brokers undertake merchant activities in gold, metals and agri commodities. Commodity exchanges have sought relaxation of these rules for brokers.

PLY: We wish the newly merged SEBI-FMC every success in the future delivering a pragmatic and wise approach to the Indian marketplace as the nation’s economy and markets continue to grow.

Read our Premium SEBI-FMC Merger Brief.


Sarao’s Extradition Hearing Is Delayed Until February (subscription)
Chiara Albanese – Wall Street Journal

Read our Premium The Kennel – Premium discussion of the “Hound of Hounslow”.


Speed Traders Offer ETF Fix To Prevent Repeat Of August Rout
Nick Baker – Bloomberg

CME & CFETS Sign Agreement On Cooperation

CFTC Issues Order Adding the Interest Rate & Forex Asset Classes to the Asset Classes ICE Trade Vault, LLC Intends to Serve as a Provisionally Registered Swap Data Repository

CFTC Signs MOU with Korean Financial Services Commission & Financial Supervisory Service to Enhance Supervision of Cross-Border Clearing Organizations

Private Markets

UCX Likely To Lose Its National Level Status
Ram Sahgal – The Economic Times

Universal Commodity Exchange (UCX) might lose its status as a national level commodity futures exchange with FMC having recommended withdrawal of its recognition to the government a month ago, following financial mismanagement by its promoters and top management.

Last week UCX’s MD & CEO, Praveen Pillai, was declared not fit and proper by FMC.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 1.5% despite press stories noting how volume has declined for its futures in FIA rankings in recent years while 63 Moons (FTIL) is flat.

Conspiracy To Kill FTIL?
Bureaucracy Today

Two years after the payment crisis at the National Spot Exchange Limited (NSEL) rocked the corporate world in 2013, the issue continues to remain at the centre of a multi-agency probe and a web of legal proceedings and endless blame game. Though the judiciary is yet to assess who was at fault, confidential documents accessed through an RTI application which are now with Bureaucracy Today indicate that the crisis in India’s first spot commodity exchange was a conspiracy carefully crafted by an unholy nexus between some bureaucrats and market competitors.

PLY: Worth reading. Not agreeing with the thesis as this is a case of the ‘pure’ causality doesn’t seem to involve FTIL therefore, ipso facto, FTIL is not culpable. A deft syllogism but even leaving aside the venerable “Shahdenfreude” of others, this messy problem took place while FTIL/NSEL management were overseeing an unregulated market they had created. True, the festering sting in the tail of enforced FTIL – NSEL merger even being proposed remains an appalling travesty of corporate governance but again looking at correlation / causation and the like, can NSEL really have run a market that didn’t realise what was happening? Well, how about those empty / non-existent warehouses for a start?

Read in Premium NSEL Scandal Brief – Main File.


ESMA Consults On The European Single Electronic Format

ESMA launched its public consultation on its regulatory technical standards on the European Single Electronic Format (ESEF) for company data.

PLY: Interesting that the first suggestion is a PDF – in other words, a document from which it is more difficult to extract the data. Second line suggests additional XBRL or similar formats – surely any data that can be instantly digital is vital for better market analysis?

ESMA Publishes Draft RTS On European Electronic Access Point

ESMA delivered its regulatory technical standards (RTS) on the European Electronic Access Point (EEAP), as required under the amended Transparency Directive, to the European Commission for endorsement.

Blockchain: The Right Solution At The Right Time?
Anna Irrera – Financial News

The Public vs Private Debate On Blockchain (subscription)
Anna Irrera – Financial News

Blockchain: Four Financial Frontrunners (subscription)
Anna Irrera – Financial News

Moving From T+2 To T-instant (subscription)
Diana Chan – Financial News

Blockchain: An Uber Moment For Finance – Maybe (subscription)
Gren Manuel – Financial News


Investor Lawsuits Pile Up Claiming US Treasury Market Is Rigged (subscription)
Joe Rennison – Financial Times

A total of 23 related cases have been filed so far, alleging the primary dealers that underwrite the US government’s debt colluded to manipulate the price of US Treasuries to their benefit.

PLY: This is clearly no laughing matter although I had to suppress a titter that one of the lead plaintiffs is a ‘Teamsters’ Pension Fund (“Cleveland Bakers & Teamsters” to be precise). Seriously, a messy situation – and another where the old means of doing things is being prised apart by lawsuits it seems. There are a lot of moving parts in bond markets and it strikes me that primary dealers naturally had to give themselves some cover in a market which is usually rather volatile – was this an act of blatant profiteering? Hmmm….

Swiss Competition Body Probes Banks In Precious Metals Trade
Corinne Gretler & Jeffrey Voegeli – Bloomberg

Swiss Investigate Seven Banks Over Precious Metals Market Trading (subscription)
John Revill – Wall Street Journal

Seven banks: UBS, Deutsche Bank, Barclays, Morgan Stanley, Julius Baer. and a unit of Tokyo-based trading company Mitsui & Co. Ltd. are also part of the probe, the Competition Commission, known as Weko, said in a statement on Monday.

Market Making Program Based On Revenue Sharing On Borsa Istanbul Derivatives Market Is Extended

IOSCO Research Reports On Corporate Bond Markets In Emerging Markets


Euronext Launches Euronext BeNe 40 Equal Weight Index

MSCI To Report Carbon Footprints Of Indexes (subscription)
Ezequiel Minaya – Wall Street Journal

Career Paths

LedgerX announced that Mark Wetjen will join its board. Wetjen was also appointed as MD of DTCC, as reported last week.

PLY: A busy week of appointments for Commissioner Wetjen (who stepped down August 28th, curiously his CFTC web page infers he is still in situ…).

Reuters reports that Jeremy Penn, CEO of Baltic Exchange, will step down next summer. Penn took the helm of the exchange in 2003.

PLY: Good luck to Jeremy Penn the CEO of the rather wondrous but largely unknown exchange at the heart of London’s shipping markets.

Business Standard reports that Rajeev Kumar Agarwal, whole-time member, Sebi, will be in charge of commodity derivatives as FMC is set to merge with Sebi.

Board of Supervisors of ESMA appointed the following individuals to serve as chairmen of its standing committees:

David Lawton, Director of Markets, Policy and International of FCA, UK, will chair the Investor Protection and Intermediaries Standing Committee;

Misu Negritoiu, President of ASF, Romania, will chair the Committee on Economic Market Analysis; and

Edwin Schooling Latter, Head of Market Policy of FCA, UK, will chair the Commodity Derivatives Task Force.

JWG, the financial services regulation experts, appointed Blythe Barber as their new MD.

Financial Calendar

This 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 CEO Jeffrey C. Sprecher sold 38,000 shares Tuesday, September 22nd at $226.65 (bargain $8,612,700.00. Following the sale, the chief executive officer now owns 285,563 shares in the company, valued at approximately $64,722,853.95.

Mandatory Notification Of Trades – Oslo Børs Vps Holding ASA

In connection with a monthly share savings plan for employees of subsidiaries, Oslo Børs VPS Holding has sold a total of 1553 shares. New holding is 4239 shares. Employees paid a share price of NOK 88.- per share, but were allowed a discount of 20% on purchases up to NOK 625.


Georgia Gets First Federal OK For Crowdfunding Business
Walter C. Jones – OnlineAthens

The nation’s first business with federal approval to use multi-state crowdfunding is a Georgia company building on an innovative state law. Atlanta-based Groundfloor began in North Carolina but moved to Georgia to take advantage of the Peach State’s law that opens the door to small investors.

P2P Business Loans To Hit £12bn In 2020
Tim Wallace – Daily Telegraph

Thomson Reuters Partners With Crowdnetic To Help Increase Crowdfunding Transparency – Data Tracked Using Thomson Reuters Permanent Identifier To Be Available In Eikon

Other stories

ITG Releases Research Unbundling Guide

Statement Regarding Security-Based Swap Rules, SEC Commissioner Daniel M. Gallagher And SEC Commissioner Michael S. Piwowar Sept. 25, 2015


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