September 29 2016

elb2Greetings from 30-something thousand feet…

This edition of Exchange Invest comes from somewhere over the Atlantic as I fly back to Europe returning from the World Co-Operative ManagementConference in Belo Horizonte, Brazil. Admittedly, it was a bit touch and go, as the airport of Sao Paolo combines often wondrous interior architecture with the most blithely disorganised fiasco of customer obliviousness it has been my misfortune to experience in years of frequent travel.

Anyway, the wonder of it all is inflight wifi and a chance to complete today’s (not inconsiderable) pith from a certain altitude and elegant travel comfort.

 

 

In Today’s Exchange Invest

EC Antitrust goes in even harder than I expected on Phase 2 investigation of DB1’s proposed acquisition of LSE. Literally everything is under investigation, even German equities on a national basis, let alone freight, repos, you name it, the EC is worried about it…(and quite right too many not on the DB1-LSE payroll will add). Meanwhile, DB1-LSE responds with an offer to sell assets they had already earmarked months ago… Indeed, even before the Merger of Equal Desperation, there are many who seem to recall XavRol saying he didn’t want to own said asset in the first place… Ahem.

It’s a busy day outside the DB1-LSE merger setback (this broad a review is, make no mistake a very large wet fish across the jowls of the misplaced hubris of the proposed merger), let’s get scrolling

In BigWorld

Meanwhile in Bigworld: Frequent flyer tip: you may think your Samsung Galaxy Note 7 is the best phone ever but due to its battery difficulties, using one in flight is the sort of traveller gaffe which is likely to get you, at best, tasered. At worst, well, let’s just say resolution will be much faster than an EU antitrust process…

Events

Spot the banner to the left of this, it’s coming up to Burgenstock. Slightly buffeted by dates, (SIBOS pushed it from the slot this week into November and then it was tricky not to coincide with the WFE who are off to the depths of Colombia for their annual boondoggle the week before) ICDA will meet in Geneva mid-November, a touch later but with a strong impact remaining. Interesting line-up still filling out for continental Europe’s leading derivatives event, you ought to be there…

 

 

Public Markets
EU Has Serious Concerns About DB1 Acquiring LSE
EC

The key areas for Phase 2 are:

A Clearing
B Derivatives
C Repos
D German stocks
E ETPs (ETFs et al)
F Other markets including:

“The transaction was notified to the Commission on 24 August 2016. The Commission now has 90 working days, until 13 February 2017, to take a decision. The opening of an in-depth inquiry does not prejudge the final result of the investigation. “
NB As expected, the initial questionnaire did not preempt many of these issues but as clients will know, I have consistently noted this deal was always going to go to an in-depth examination. Indeed I am now more sceptical than ever that it can survive unscathed (and remains unlikely to complete) due to the extent of the phase 2 investigation…and indeed the utterly pathetic remedy suggestion.

EU Opens In-Depth Review of DB1, LSE Merger
Wall Street Journal
LSE Plans French Clearing Unit Sale to Appease EU Regulators
Bloomberg

PLY: Actually “appeasement” is probably the closest we have got yet to what amounts to what many may view as an insult of the parish’s intelligence by a scintillatingly arrogant management approach to steamrollering through an awful deal which is bad for customers, bad for markets and bad for the EU economy within and beyond the EU. XavRol wandering around waving a piece of paper guaranteeing “merger in our time” is kind of where appeasement meets this dismal suggestion. After all the story goes that XavRol wasn’t a fan of LCH owning Clearnet from the get go and has apparently been frequently eager to sell it as LSE CEO – the notion that now it can be the means to secure this deal through antitrust demonstrates either a swaggering arrogance for all parties concerned, or just a plain incapacity to appreciate the industry.

NB I cannot help but feel it was pure coincidence that the movie I chose on LH505 at this juncture was “Alice Through the Looking Glass.”

LSE Plans French Clearing Unit Sale to Appease EU Regulators
Bloomberg

PLY: Like, woof man, woof woof woof, as they may say in California. Hopefully they will see through this dismal canard in Brussels too – after over 6 months, if this is all LSE-DB1 can offer, it shows they don’t understand the parish (but many already suspected that…).

CBOE, Bats Face Challenge Of Integration
Crain’s Chicago Business

PLY: CBOE faces the proving ground which, actually, is not really the undoing of others – given how many, larger exchange groups still retain largely undigested acquisitions on their balance sheets. Of course if CBOE-BATS can integrate  successfully the way some others cannot, then they end up becoming more akin to ICE which is a feat to emulate methinks…

Exclusive: Bats’ Buyout Means Growth For Kansas City
Kansas City Business Journal

PLY: Kansas City optimistic in the wake of its homegrown business which has taken on the parish and defeated many…

CBOE’s $3 Billion Bats Purchase Is Actually A Tech Deal
Bloomberg
CBOE-Bats Should Pass Antitrust Probe – Lawyer
FOW magazine
ETF Gold Mine Is Prize In CBOE’s $3.2 Billion Bats Acquisition
Chicago Tribune

MCX Valuations Ignore Ground Realities
Livemint

PLY: Raises the spectre (ongoing for some time) that CME is looking to buy a major stake (now 15% thanks to recent rule changes).

EU Banks Eye $5 Billion Capital Reprieve As SEC Votes On Rules
Bloomberg

Nasdaq’s Greifeld Weighs In On IPO Market & M&A
Bloomberg

Nasdaq Exec: Private Capital Raising Requires Knowhow
Globes

ASX Pledges To Guard Against New Outage
The Australian

MCX Signs Agreement With IGIDR To Support Research On Issues Related To Commodity Derivatives
Economic Times

SGX Sees Baltic Buy Helping Boost Asian Freight Derivatives
Reuters

UK Greek Shippers Happy With Baltic Exchange Sale
Kathimerini

What’s The Next Big Change For India’s Stock Markets
Bloomberg

Video: NSE India CEO Chitra Ramkrishna discusses India’s markets and her investment thoughts..

Did Sebi Just Ask NSE To Investigate Itself?
Livemint
Indian Exchange Grapples With Technology Divide Among Customers
Bloomberg

 

Private Markets

NCCPL – A Case Of Pakistan’s Infrastructure Institutions’ Success
Business Recorder (registration) (blog)

One Year On, BSE Awaits Regulator Nod For Commodity Platform
Business Standard

 

BSE’s rival NSE is already in the commodities space, through its 15 per cent stake in NCDEX.

To Be Free To Sell, A Farmer Cannot Be Beholden To The Lender
Swarajya

PLY: One of those articles which reminds us why we do this…the enabling of better markets for the real economy to improve the human condition.

Commodities Exchange Coming In Q4
VietNam Breaking News

DFM Seeks To Reduce Impact Of Speculation
Gulfnews.com

Sebi Allows Options Trading In Commodities
Livemint
Regulator Allows Options Contracts In Commodities
The Hindu
NCDEX Welcomes Sebi Approval Of Commodity Options
Times of India

PLY: Very significant both on account of the pushback by those not yet educated to the advantages of options (qv Hindu Business Line scepticism). Exchanges need to win the argument for options in India as it means a chance for farmers to hedge … Albeit I can readily appreciate that Indian markets so often become fixated with a massive raft of speculative excess. However the rough smooth index needs balance to enable prosperity for the broadest quantity of folk.

Stock Exchanges to Back Entrepreneurs, Approved by South Africa
Bloomberg

PLY: GP amongst the locales to see a true grassroots exchange renaissance it seems – that’s the hype but many will recall that Gauteng Province was often referred to as gangsters paradise. We need better markets, here’s hoping the South African entrepreneurial impetus can be helped.

Bond Dealers Beat Flash Boys In Treasuries Trading With Clients
Bloomberg

Thomson Reuters Partners Clifford Chance On OTC Derivatives Documentation
Finextra

PLY: An interesting, potentially profitable and beneficial scenario is feasible – good move.

Canada’s Oanda Seeks To Reposition fxTrade As Data, Payment Platform
SMN Weekly (blog)

This Man Wants To Blow Up Stock Exchanges
Politico

PLY: Interview with Patrick Byrne about Overstock…

Keler Hungary To Join Target2-Securities
Budapest Business Journal

Gain GTX To Launch London & Tokyo Matching Engines
PR Newswire (press release)

 

Special Section: FTI, NSEL, India at the Crossroads

 

NSEL-FTIL Merger: Next Hearing Nov 24
Hindu Business Line

Fighting NSEL Merger, 63 Moons Wants To Go Digital
Economic Times
63 Moons Tech Sets Up Investment Panel To Protect Rs 2000 cr Cash
Business Standard

 

Technology

 

ICAP & Wind Info Team Up To Extend Market Data Portfolio
Finance Magnates

ASX Completes Blockchain Trading Platform Prototype
ZDNet

 

Products

 

The Growing Trend Of P2P SFTs
Global Investor

CME Group Adds New Exchange To Bitcoin Index
CoinDesk

Shanghai Exchange Said To Mull Tighter Property Bond Sale Rules
Bloomberg
Career Paths

 

Mamdooh Al Sedairy has been appointed As CEO Of the Securities Depository Center Company of Saudi Arabia.

Dr Ken Henry AC was re-elected to the board of the ASX at the AGM while Melinda Conrad was elected to the board (all other motions passed).

Jane Norberg has been Named Chief Of SEC Whistleblower Office

and an: AVP Job at Multi Commodity Exchange Of India Ltd. in Mumbai has been advertised on LinkedIn.
Crowdfunding

 

Pokemon-Style Money Maker, Vulture Capitalist Is Kickstarter’s New Featured Game Project
GameZone

PLY: Train startups to win…can you be the new Sprechmonchan?

When You Use A Bomb to Swat A Fly: A Response To The Proposal Banning SAFEs
Crowdfund Insider

World’s First eSports Cryptocurrency ‘eBoost’ Sees Crowdfunding On Bittrex
CryptoCoinsNews

 

 

Other Stories

 

 

SEC To Host Public Fintech Forum
CryptoCoinsNews

OCC Supports SEC Decision On Covered Clearing Agency Rules
MondoVisione

ASX Founder Ian Roach’s Hawthorn Home On Sale For $3.8m
The Australian Financial Review

SEC Proposes Rule Amendment To Expedite Process For Settling Securities Transactions – Proposal Shortens Settlement Cycle From Three Business Days To Two
MondoVisione

PLY And lo many industry folk got very excited at the prospect of arriving kicking and screaming 2 days behind a decent blockchain…

…and for me time to close down the internet on Lufthansa somewhere over the Atlantic and push a few z’s – good night!

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