G’day All,
Turquoise: Announces fee cuts, but I wonder if this is a step away from transparency. Their rate table has aggressive, accelerated, etc. etc.
I’m still a fan of Chi-X (.3bps aggressive / .2bps rebate) all markets all stocks. And EMCF 5cents, all markets all stocks. That is transparency and comparability.
Dark Pools: New York Block Exchange gets approval in the US as does Smartpool in Europe.
Securities lending CCPs: Sorry, I’m still a bit sceptical. Prod me if I need to move with the times.
Default funds: SGX proposes a revision to the guarantee fund. I think these are in line with international practice and of course pushes more responsibility onto users whilst providing the CCP (exchange owned) with greater flexibility.
BATS: Congratulations on becoming the 3rd largest exchange, not bad from a standing start in Jan 2006.
DTCC: So much debate about DTCC being 10 times cheaper etc than Europe, and only now they seek to address novation at the point of execution. I still feel there is much that can be learnt from the maturity of the European Clearing business and models.
ASX continues to muddy the waters in the Australian infrastructure game. I just feel bad for every investor in Australian securities every day – they’re getting ripped off and the government is just allowing it.
FinNews and clearing round up.
Side effect of GFC (Global Fin Crisis), carbon emissions now 12 euros per tonne. My brother feels the price naturally mitigates the cost of compliance during the GFC but I can’t help but feel sorry for our planet. What incentive to clean up at 12 Euros?
Anyway, better dash, just in case Aust can claw themselves a win after the shame of losing both the Test series and One Days to SA. Congratulations to SA.
Super 14 round the corner which means 6 Nations too.
Easy ones: Italy nah, Scotland nah, Ireland, try hard but nah. Wales, (last test beat the wallabies), England, (every nation will pull out their best performance), and France (some up, some down). So, Wales to win the 6 Nations.
Have a great week-end all,
History at:
S
The big swim was indeed a big swim.
This year they put the markers out so it was at least 2.9km.
I like to swim ‘wide’ (I mean, there is a whole ocean) to avoid both the main swimming group and the chop of the surf at the headland.
Not sure how successful this was as all swimmers complained of rough seas this year.
I did go ‘deep’ and wide of the headland, maybe too far, anyway, I did avoid the crowd.
What I did find in the deep was jelly fish (apart from sharks, I hate jelly fish.)
Fortunately they were the non stinging kind.
At first I could see them in the deep but then I felt them as I pushed them aside during my arm stroke.
I just hoped for none of the nasty blue ones (they hurt) and eventually I managed to come through unscathed once I rounded the headland.
The sea was pretty unforgiving throughout.
Tough break to get out from Palm Beach (which I thought would favour me).
Rough sea to the headland (which has 2 ‘false’ heads), some stingers, and then a very choppy rounding after about 1.7kms.
Run into Whale Beach was clear water with a mixed swell.
Didn’t manage to catch the big wave in so had to settle with being dumped onto the sandbank.
Will I ever do this again? You bet!
Next one is:
http://www.rainbowclubaust.com.au/oceanswim/course.htm
Oh, the results:
Pretty disappointed actually to come 933 out of 1,141 (men) or 1,574 entrants.
I came 112 out of 179 in my age group (oh well, still room to improve).
Time of 57.15 not great either, but everyone had the same conditions.
I think the timing chips are great, but I notice a lot of people don’t observe the correct start wave nor handicap. (but who cares?)
Also happy to be in the main wave – there was about one person per second crossing the line for the 3 minutes before and after me.
I’m just happy to have done the distance and to have had plenty of fuel in the tank at the end.
Results here:
http://www.thebigswim.org.au/
A good recap here:
http://www.oceanswims.com/nsw89/090125.html
An interesting blog / comments of the day:
http://oceanswims.blogspot.com/2009/01/big-day-for-big-swim.html
26/01/2009 11:37:00
TURQUOISE INCREASES REBATES FOR HIGH VOLUME TRADERS
As the battle for market share in European stocks ramps up, bank-backed equity trading venue Turquoise says it will increase the rebates it pays to members for posting bids on its order books.
More on this story: http://www.finextra.com/fullstory.asp?id=19563
See also:
http://www.tradeturquoise.com/doclibrary/Tariff_Schedule.pdf
Turquoise price cuts may not reach buy-side
28/01/2009 13:00:00
SMARTPOOL GREENLIGHTED BY FSA TO BEGIN TRADING NEXT WEEK
SmartPool, the new multi-lateral trading facility (MTF) set up by Nyse Euronext, BNP Paribas, HSBC and JPMorgan, has received Financial Services Authority (FSA) approval to launch its dark pool for block trading in European stocks.
More on this story: http://www.finextra.com/fullstory.asp?id=19574
BATS CLAIMS WORLD'S THIRD LARGEST STOCK EXCHANGE IN NOTIONAL VALUE TRADED
http://www.finextra.com/fullpr.asp?id=25685
27/01/2009 12:06:00
NYSE EURONEXT AND BIDS GET SEC APPROVAL FOR BLOCK TRADING JV (i.e. New York Block Exchange)
Nyse Euronext and Bids Holdings are set to launch a block trading execution platform later this week, after receiving the greenlight from the Securities and Exchange Commission.
More on this story: http://www.finextra.com/fullstory.asp?id=19567
29/01/2009 16:06:00
DTCC PLANS REAL-TIME TRADE GUARANTEE
The Depository Trust & Clearing Corporation (DTCC) has outlined plans to implement a real-time trade date guarantee for equity and corporate and municipal bond transactions, as it looks to ease concerns among market participants over security of settlement.
More on this story: http://www.finextra.com/fullstory.asp?id=19581
27/01/2009 16:12:00
QUADRISERV AND EUREX CLEARING TEAM ON TRANSATLANTIC CCP FOR SECURITIES LENDING
Eurex Clearing is partnering North America's Quadriserv to offer central counterparty (CCP) clearing and settlement services for securities lending of European equities.
More on this story: http://www.finextra.com/fullstory.asp?id=19569
SINGAPORE EXCHANGE LOOKS TO REVISE DERIVATIVES CLEARING FUND STRUCTURE
http://www.finextra.com/fullpr.asp?id=25615
http://info.sgx.com/SGXWeb_RMR.nsf/NEWDOCNAME/PC_230109
BATS EUROPE LAUNCHES MARKET SHARE DISPLAY FREE OF CHARGE
http://www.finextra.com/fullpr.asp?id=25632
NASDAQ OMX renamed the Philadelphia Board of Trade, the small futures exchange piece of the recently acquired Philadelphia Stock Exchange, as NASDAQ
OMX Futures Exchange (NFX).
Nasdaq OMX revises Nordic CCP plans
NASDAQ OMX COMPLETES EMCF STAKE ACQUISITION
http://www.finextra.com/fullpr.asp?id=25715
INSTINET BECOMES AUSTRALIAN CLEARING MEMBER
http://www.finextra.com/fullpr.asp?id=25713
FIRST DERIVATIVES SECURES £3M FROM INVEST NORTHERN IRELAND FOR JOB CREATION Banking software developer First Derivatives has secured over £3 million in funding from Invest Northern Ireland (InvestNI), the country's economic development organisation, to support the creation of 142 new jobs.
Full story: http://www.finextra.com/fullstory.asp?id=19577
AUSTRALIAN FINANCIAL REVIEW: ASX Rivals Impatient for Licence GrantsBy Matthew Drummond1/27/09ASX Ltd’s sweeping overhaul to its trading systems could be put on hold after its aspirant competitors urged the federal government not to approve the changes until it had decided on their applications to set up rival exchange platforms.Marking a more gloves-off approach, Chi-X chief executive officer Tony Mackay slammed ASX’s conduct as “opportunistic” and “typical of monopolists battling to maintain their positions”.ASX has proposed a range of new services that Chi-X believes copy its own business plan, a plan which has been on ice for a year while the, government considers granting it a licence and ending ASX’s monopoly.“First they come out and do scaremongering... and tell you that these new systems will cause huge structural problems to the markets and we should stop them at all costs. And then in the background they are feverishly trying to introduce these new innovations themselves and saying you don’t need competition because we’ve brought this in ourselves,” Mr Mackay said.“They have defeated so many diversions in the mind of the government by bringing up issues that they have now had to completely backtrack on.”Mark Weldon, chief executive of NZX Ltd, which part-owns AXE ECN, said he had the same concerns. AXE-ECN had been waiting for a licence to compete in Australia for three years, he said.“This stuff is going around and if Australia has aspirations to be a global financial centre it needs to address this state of affairs pretty quickly.”Chi-X and AXE-ECN hope to offer faster share-trading services at a lower cost to the ASX.After one year of operating in the UK, Chi-X said it had taken 14 per cent of the market in trades for FTSE 250 stocks off the London Stock Exchange.The government’s go-slow on deciding whether to end ASX’s monopoly is one bright spot among otherwise bleak trading conditions for the exchange. Analysts have steadily crimped their earnings forecasts for ASX as trading volumes weaken. Morgan Stanley noted last week that 2008 was the first year since 1990 that value traded on the ASX had fallen — by 12 per cent year on year. It expects value traded to fall 23 per cent this year.On Friday, ASX spokesman Matthew Gibbs rejected Mr Mackay’s criticism and said that ASX did not seek to deny market entry to trading-venue operators that preserved market quality.“The issues for ASX have been about what needs to go in the legislative framework that would be necessary to achieve this, and what market models are inconsistent with this objective and therefore should not be permitted,” he said.In representations made to the Australian Securities and Investments Commission and Corporate Law Minister Nick Sherry, Chi-X accused ASX of bringing in the same services that it had warned could create a disorderly market if brought in by rival platform operators.The new services, announced late last year, would widen ASX offerings to fund managers and other large investors to shift large parcels of stock away from smaller investors, preventing price movements and lowering transaction costs.The services include a “dark pool”, to be called VolumeMatch, where large investors can anonymously move big share parcels and “iceberg orders”, allowing traders to enter a large trade but reveal only a small amount of the total volume.Chi-X’s director of markets and operations in Australia, Jason Keady, said ASX had originally claimed such reforms would lead to a lack of market transparency, but now appeared to have “completely back- flipped on their previous policy”.Mr Gibbs said ASX’s proposed services could not be characterised as the same as those proposed by aspirant operators. VolumeMatch had inbuilt transparency mechanisms lacking in the proposed models of potential rivals at the time of ASX’s submission to ASIC, he said.ASIC is still to decide whether to approve the new services, which require changes to the ASX’s market rules.
=====================FINANCIAL NEWS: Clearing Competition Feels the Squeeze By Luke Jeffs 1/26/09The hope expressed last year by consultants Boston Consulting Group that banks can save hundreds of millions of dollars by “optimising their clearing networks” may well ring true in theory, but European institutions may be left muttering: “Chance would be a fine thing”.More than a year after the adoption of the European Commission’s code of conduct on clearing and settlement, which required the region’s clearing houses to foster competition between themselves by linking up, only one such example of mutual interoperability has emerged despite numerous requests.Europe’s largest exchanges and clearers, also known as central counterparties, remain publicly bullish about the code of conduct but behind the scenes they tell a different story: the code has become mired in protectionism and finger-pointing.Miranda Mizen, a senior consultant at research house Tabb Group, said: “There are more than 80 requests for access and interoperability outstanding, languishing in lawyers’ offices and in CCP inboxes, stuck behind differences in national laws, market practices and facing foot-dragging resistance to competition. Most of the 80 will never see light of day.”A lack of clearing house interoperability may not seem such a big deal, particularly in the current financial climate, but without it banks will not be able to “optimise their clearing networks” as Boston Consulting Group recommends and realise its headline savings.The lone example of interoperability – which involved the London Stock Exchange opening up to Swiss clearing house SIX x-clear in addition to its incumbent provider LCH.Clearnet four months ago – offers some hope.Swiss bank UBS jumped at the chance to consolidate its UK and Swiss equity clearing on SIX x-clear in December last year, saying it would look to bundle as much of its clearing activity through one CCP as possible. Robert Barnes, managing director, equities, at UBS, said banks face higher fees for processing the same amount of business because the value of trading is plummeting while the volume of trades continues to increase, a function of increased electronic trading.Exchanges and their rival multi-lateral trading facilities base charges on the value of orders but clearing house fees typically correlate with the number of trades.Barnes said: “User choice in clearing is an important mechanism to help reduce the frictional cost of front-to-back trading and it is for this reason that UBS has backed the user choice model and for this reason that it moved its business to SIX x-clear on December 12 – a move that was technically easy to implement and continues to deliver smooth on-time settlement.”Rival clearing houses said UBS’ part ownership of SIX x-clear was a factor in its decision but the bank has denied this.Barnes said: “If a clearing house is functionally attractive and chooses to offer an attractive clearing tariff then it makes sense for us to route business there, and if they are offering attractive volume discounts across multiple markets it makes sense for us to send as much business as possible to that clearer.”Even LCH.Clearnet, which lost out on the deal, is philosophical. Alberto Pravettoni, managing director, corporate strategy at the Anglo-French CCP, said: “In the case of the LSE opening up to X-Clear this is an isolated example where we have lost business but we are open to competition in the UK market and with X-Clear we have proved that interoperability can work.”He added that he was confident there would be further examples of interoperability between European clearing houses this year.He said: “The multi-lateral trading facilities in particular may take the lead here by reviewing their single clearing house strategies and I think we are well positioned to take advantage of that.”Europe’s MTFs – Chi-X Europe, Turquoise, Nasdaq OMX Europe and Bats Trading – use a single CCP to support their businesses but Pravettoni believes these platforms may look to embrace competition in a bid to drive down costs for their customers.Diana Chan, the chief executive of EuroCCP, the CCP to Turquoise, is frustrated by the lack of progress and questions whether all the MTFs will look to embrace competition, insisting it is up to the brokers using these platforms to make them offer a choice of clearers.She said: “Some exchanges and MTFs may have economic interests not to offer competitive clearing, but even when an MTF has no economic interest, the incumbent clearer could say it has no time to work on it. Switching clearing houses entirely is effectively not an option open to an MTF because many of the trading firms don’t have the technology budget to be able to switch.”Chan’s assertion that “competitive clearing is fine in principle but without mandated interoperability, the incumbent will not find time to work on it with a challenger” does not bode well but there are signs that things may be about to change.US group the Depository Trust & Clearing Corporation, also the owner of EuroCCP, is quietly moving ahead with its plan to buy LCH.Clearnet in a deal estimated to be worth €739m ($958m).Second, European equity trading, dominated by large exchanges and the start-up MTFs, may be set for consolidation if the value of trading, the basis for their main revenue, continues to fall, as it has done over the last three months.Chan said: “I think the future of European clearing will be dictated by what happens at the trading level. If there is a merger between two exchanges or an exchange and an MTF, this will hasten consolidation between clearers faster than interoperability and competition.”Finally, there are the regulators. The code of conduct may have been largely ineffectual but it is unlikely Europe’s lawmakers, smarting from criticism of their handling of the credit crisis, are going to tolerate “foot-dragging” over managing counterparty risk, their bête noire after the fall of Lehman Brothers.Transatlantic merger would cut costsThe debate about the efficacy of the EC’s code of conduct could be made largely redundant by the proposed DTCC/ LCH.Clearnet merger, a transaction that would create first transatlantic clearing house and offer huge savings to European customers.The combination will allow the Anglo-French clearer to leverage the US group’s massive clearing volumes and offer tariffs in line with those in the US, where fees are a fraction of those paid by European banks and brokers.Alberto Pravettoni, managing director, corporate strategy at LCH.Clearnet, said: “The DTCC deal, assuming it goes ahead, will provide us with access to the economies of scale and the technology that will allow us to be more aggressive on fees, which is one of the key drivers behind the proposed deal.”Miranda Mizen, a senior consultant at research house the Tabb Group, said consolidation was the key to driving down European clearing fees.She said: “Clearing is a volume game and CCPs need to create economies of scale and diversification across markets and industries to leverage common platforms and create multiple revenue streams. This is only possible through consolidation of CCP services into larger, more diverse companies that reach across borders.”If the DTCC/LCH.Clearnet deal goes through, any fee cuts by LCH.Clearnet could set a benchmark that its European rivals will have to match if they want to remain competitive.
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CO2 Emissions Trading: Financial Crisis Drives Down Price of PollutionAs the economic effects of the financial crisis deepen, it has become surprisingly cheap to pollute. Prices for carbon dioxide emissions permits have fallen below 12 euro per ton. Some companies are selling them to generate much needed cash.
http://www.spiegel.de/international/europe/0,1518,603521,00.html
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