Chi-X, LCH.CN, CDS, LSE

G’day All,

Well, happy Paddies Day!

Chi-X: Couple of updates on the new structure(s) at Chi-X. This touches both Europe and Global.
NYSE Euronext: Arca Europe is everywhere apart from Euronext home markets.
LCH.CN: Goes to NY. Nice link to a previous story.
LCH.CN: For sale or project Lily. Couple of interesting developments. Deutsche advisors quits. (That’s not going to speed the deal up). LSE drops out. (Maybe they have run their slide rule over the numbers more closely and see their interests are slightly divergent from the syndicate, hence refocus on their CCP, CC&G), Couple of announcements from Boca. Liddel says due diligence not moving as fast with DTCC and Nasdaq observes via Greifeld that interest rate swaps could be more profitable than CDS. ICAP, and full respect to them, I suspect is chasing CDS.
Eurex: confirms syndication of CDS offer.
ICE: Starts CDS.
LSE: Still trying to breath life into EDX.
SGX: Introduces T+3 w/ buy ins. Good settlement discipline in my book.
Tax: People start to toy with who will pay the bill for the current mess. Please let common sense prevail, and not stamp duty.
I thought the UK Lords overturning the local boroughs on what fines they would levy for pavement cycling, depending not on the gravity of the offence, but merely on how strongly ‘anti-cyclist’ their Councillors wanted to be was evidence both of the importance of voluntary organisations (that had tireless lobbied the point) and that democracy can work.

Congratulations to the Little Haven team. Once again they have smashed their fund raising goal. So important for the carers at Little Havens. In it’s 5th year, this is becoming an important recurring event for the funding of Havens. Guys & Gals, you need to send me a re-cap and some pics.

No swims last week-end but I’m planning on the Illawarra Escapment this weekend.
http://www.oceanswims.com/nsw89/stanwell09.html
You must breathe to the left in order to appreciate this swim. If you breathe only right, you will get a glorious view of the Pacific Ocean horizon. If you can breathe left, you will have one of the most spectacular views in ocean swimming: the Illawarr Escarpment towering to infinity above you.The other thing about breathing to your right is that you may well miss the finish and end up north, running into Jibbon Point off Cronulla, or something.

RWC: well, the draw is out!
Hey, and the Queensland Reds won in the Super 14.
Congrats to the English who also found form on the w/end.
And what a final round…Ireland V Wales.
Defending Grand Slam champions Wales need to win by 13 points or more to wrest the title from Ireland's grasp.

Well, sorry Wales, here is to the luck of the Irish on Paddies day!
For those of you that get a chance, have a beer for me.

Have a great week all.

Shttp://clearingandsettlement.blogspot.com/





NOMURA POSITIONS LOWREY AS CHI-X GLOBAL CHIEF; MACKAY TAKES OVER CHAIRMANSHIP Nomura has strengthened its grip on the Chi-X Global business with a top tier reshuffle that sees Tony Mackay moved upstairs to the chairmanship and former Lehman exec John Lowrey appointed as chief executive.
Full story: http://www.finextra.com/fullstory.asp?id=19760

CHI-X EUROPE NAMES HOWARTH AS INTERIM CHIEF Chi-X Europe has named Mark Howarth as interim chief executive officer, taking over the position from Peter Randall, who stepped down last month for personal reasons.
Full story: http://www.finextra.com/fullstory.asp?id=19740

09/03/2009 12:12:00
NYSE EURONEXT AND PIPELINE ADD TO CROWDED EUROPEAN EXCHANGE MARKET
Competition in the exchange-trading space for European cash equities is set to get more intense with the forthcoming launch of new platforms by Nyse Euronext and Pipeline Financial.
More on this story: http://www.finextra.com/fullstory.asp?id=19732
… Nyse Euronext MTF everywhere apart from the Euronext markets…

16/03/2009 11:16:00
HODGKINSON APPOINTED SMARTPOOL HEAD
SmartPool, the European exchange-led dark pool for block trading set up by Nyse Euronext, BNP Paribas, HSBC and JPMorgan, has appointed Lee Hodgkinson as its new chief executive officer
More on this story: http://www.finextra.com/fullstory.asp?id=19770
***hard to keep a good man down***

11/03/2009 15:54:00
LCH.CLEARNET TO OPEN NEW YORK OFFICE
London-based LCH.Clearnet has opened an office in New York to support a push into the US over-the-counter and exchange-traded clearing business.
More on this story: http://www.finextra.com/fullstory.asp?id=19751
*** Watts - a former DTCC board member - previously held the position of managing director within the operations division at Goldman Sachs, where he spent 33 years of his career.

Now, let’s cast our minds back to…the 20th July 2006
http://www.finextra.com/fullstory.asp?id=15615
*** Liddell was formerly at Goldman Sachs where he was head of global operations…
*** and to do this a week or two before potentially transformational ownership (and management) negotiations…I’d like to see the sign on and termination clauses…


11/03/2009 12:44:00
ELX PREPS FOR JUNE LAUNCH
A new electronic futures exchange being set up by a group of banks and trading firms to take on the Chicago Mercantile Exchange plans to start live trading in June after a month of systems testing.
More on this story: http://www.finextra.com/fullstory.asp?id=19749

12/03/2009 16:49:00
EUREX IN TALKS TO SELL CDS CLEARING STAKES
Swiss-German derivatives exchange Eurex says it is in advanced talks to sell stakes in its forthcoming credit default swaps clearing house.
More on this story: http://www.finextra.com/fullstory.asp?id=19763

LCH.Clearnet consortium adviser quits Deutsche The head of the global financial technology advisory practice at Deutsche Bank, who was leading the consortium bid of eight banks and intedealer broker Icap for clearing house LCH.Clearnet, has left the firm, Financial News has learnt.
*** Project Lily.

London Stock Exchange Said to Drop Out of ICAP-Led Bid for LCH
By Nandini Sukumar
March 12 (Bloomberg) -- London Stock Exchange Group Plc, Europe’s oldest independent bourse, has pulled out of a group of banks and brokers led by ICAP Plc that may bid for LCH.Clearnet Group Ltd., according to three people familiar with the situation.
http://www.bloomberg.com/apps/news?pid=20601208&sid=aORkeZzR.rtk

13/03/2009 15:30:00
LSE PULLS OUT OF LCH.CLEARNET CONSORTIUM
The London Stock Exchange has pulled out of a consortium of banks led by inter-dealer broker Icap that is considering a takeover bid for LCH.Clearnet. The independent clearer says it has had extensive talks with the consortium but that it is still awaiting an offer.
More on this story: http://www.finextra.com/fullstory.asp?id=19768

LSE switches derivatives technology to ease expansion
“Since Nasdaq took over OMX it became clear that the company wasn’t the most appropriate partner to develop our derivatives business with, and so we decided to look
for another partner that would give us more freedom to develop the business,” said the LSE spokesperson.

Macquarie's new brain
Michael West 7:53AM Macquarie Group sets up crack lending unit under investment banking wunderkind Ben Brazil to spend a chunk of $13b raised over past three months.
***Imagine, some 30+ kid comes in and says, I wanna buy the LSE…and I’m backed with Billabong money from the sale of tee-shirts and board shorts…deal? (Mind you, he has just bought a A$16.5 mill home).

ICE starts clearing US credit default swaps
Though owned by ICE, ICE US Trust is an independent clearing house, and all CDS market participants will be able to access the service.

ICE Begins Clearing U.S. Credit Derivatives
By Michael Eggebrecht
IntercontinentalExchange’s ICE US Trust subsidiary will begin clearing credit default swap (CDS) index trades today, following a March 6 exemptive order from the Securities and Exchange Commission. Two days earlier, the Atlanta-based exchange operator received approval from the Federal Reserve Board.
“It is critical that we bring increased transparency to credit default swaps by developing efficient and effective oversight of credit default swap clearing agencies,” said SEC chairman Mary Schapiro, adding that the conditional exemptions “will help enhance competition in the market” for clearing of credit derivatives and “ensure greater protections for investors through SEC regulatory oversight of the central counterparty.”
According to ICE, the clearinghouse initially will handle trades on Markit Group’s North American credit derivatives indexes, but liquid single-name CDS will be added in the coming months. ICE Trust’s president will be Dirk Pruis, former head of Goldman Sachs’ global bank relations and market infrastructure team and CEO of securities lending platform EquiLend.
EUROPEAN PARLIAMENT OUTLINES NEW BANK RULES TO IMPROVE RISK MANAGEMENT
http://www.finextra.com/fullpr.asp?id=26410



CME to launch FX clearing assault CME Group is set to make its latest foray into over-the-counter clearing by launching a new service for booming foreign exchange markets, Financial News has learnt.

Critics round on US trading tax A proposed tax on trading US securities would not only kill high frequency trading, it would force exchanges to migrate stock market listings and futures contracts to non-US destinations, say analysts.
Eurex ahead of the game in CDS clearing championship English football supporters have developed a powerful sense of foreboding about penalty shoot-outs. Every time their team reaches the knockout stage of an international competition they assume, when the final whistle has blown and the scores are even, they will be on the next flight home while the Germans go on to lift the trophy.
02/03/2009 11:17:00
GOLDMAN SACHS TO LAUNCH HONG KONG DARK POOL
Goldman Sachs is set to launch its Sigma-X dark pool equity trading platform in Hong Kong this week, according to the Financial Times.
More on this story: http://www.finextra.com/fullstory.asp?id=19698

SGX PROPOSES REVISED CENTRAL DEPOSITORY SETTLEMENT PROCESSES
http://www.finextra.com/fullpr.asp?id=26411
*** Singapore introduces a T+3 buy in

TRAYPORT JOINS FPL
http://www.finextra.com/fullpr.asp?id=26404
*** another feather in the cap for FIX…if there is anyone out there that remains to be convinced



Bailing the ailing How Nasdaq's bail-out index measures up to the S&P 500…When everyone is starting a new index, may as well join in…

NEWSPlanning of the Apes: Zoo Chimp Plots Rock Attacks on VisitorsA canny primate shows that humans are not the only animals who scheme
*** best thing about this is the comments to the article.


Plans for council workers in London to arbitrarily remove parked bikes have been blocked. Earlier this week, the Lords Committee examining the Bill also rejected its proposals to allow different London boroughs to choose what fines they would levy for pavement cycling, depending not on the gravity of the offence, but merely on how strongly ‘anti-cyclist’ their Councillors wanted to be.
http://www.bikebiz.com/news/30338/Bike-parking-victory-for-London-cyclists
***common sense can prevail!

Error sees QBE trade at 4 cents
4:01PM Trades in QBE shares at $15 and below were cancelled, after the stock registered an aberrant price.
…oops…

Comment: Relax, pensions regulator If the Bank of England can do it, so can you. The UK monetary authority's purchase of £2bn (€2.1bn) worth of gilts today, part of its attempt to rejuvenate the economy through what it calls quantitative easing, represents a significant relaxation of the Bank's attempts to control inflation. It also represents a short-term disaster for pension schemes that the pensions regulator should respond to by relaxing the way it applies its own rules.
*** I remain pessimistic about short term dividends


And that news we’ve all been waiting for…
http://www.rugbyworldcup.com/home/pools/index.html

….If results go according to seedings during the pool stages of the tournament, the third-ranked Wallabies cannot strike the defending champion Springboks or the top-ranked All Blacks until the final.
*** Will also see the winners of Pool C (Aust) v RU-Pool D (Wales) in the first qtr final (according to seedings). But hey, ask any Kiwi if the RWC observes seedings…


Summary · Liquidity fragmentation in Europe last week was up 0.5% to 17.5% (another new high!), driven by Netherlands and Germany. See Tables 3 – 7 for further details. · Ireland (76.5%), UK (25.4%), Netherlands (23.1%), France (20.8%) and Germany (20.8%) were the most fragmented markets in percentage terms. · UK ($2.0bn), France ($1.3bn), Germany ($1.1bn) and Netherlands ($0.4bn) were the most fragmented in terms of Displayed Liquidity traded away from the primary market. · Chi-X achieved average daily turnover (ADT) of $3.1bn, equivalent to 9.8% of flow in Chi-X names. BP ($126m, 22.7%), Total ($121m, 16.7%), and Royal Dutch Shell A ($80m, 14.9%) had the highest ADT. · ADT on the Turquoise Displayed Order Book was $1.9bn, equivalent to 6.0% of flow in Turquoise names. Total ($54m, 7.5%), Royal Dutch Shell A ($53m, 9.9%), and France Telecom ($46m, 10.8%) had the highest ADT. · BATS achieved ADT of $408.4m. BP ($20.2m, 3.6%), Total ($15.3m, 2.1%) and E.ON ($11.5m, 2.9%) had the highest ADT. · Nasdaq OMX achieved ADT of $28.0m. · 14 stocks traded more than 20% ADV on Dark venues. See Figures 7 – 10 and Tables 8 - 9 for further details.
Mark K Buchanan Electronic Client Solutions J.P. Morgan


=====================FINANCIAL TIMES: Nasdaq Plans to Buy European PlatformBy Jeremy Grant 3/13/09Nasdaq OMX plans to acquire an alternative trading platform in Europe, the US-based group said on Thursday, with consolidation likely to prompt a shake-out of existing players.The announcement, made by Bob Greifeld, Nasdaq OMX’s chief executive, comes as the group is struggling to build trading volume on its existing alternative trading platform in Europe, known as Nasdaq OMX Europe.The facility is one of five so-called “multilateral trading facilities” to have been launched since competition was unleashed in European share trading with the enactment of Mifid in 2007.Nasdaq OMX Europe was launched in September, offering trading in more than 600 European stocks and competing against Chi-X, Turquoise and BATS Europe, three other MTFs. This week, Nasdaq’s rival NYSE Euronext launched its own European MTF, named NYSE Arca Europe.Chi-X, the leading MTF, has captured roughly an 11 per cent share in FTSE 250 stocks, according to Fidessa, a trading technology company. Nasdaq OMX Europe has 0.27 per cent. Mr Greifeld acknowledged that the platform’s performance had not matched expectations. “We’re not where we want to be. We are actively engaged with our customers now on different approaches [to improving the performance of the platform],” Mr Greifeld said at the Futures Industry Association conference in Florida.Asked whether he was interested in buying another of the MTFs, he said consolidation was likely in the next few years: “We will participate in the consolidation. I don’t yet know who.” He said he had anticipated that such consolidation was likely to start in 2012, but that he now believed it would happen sooner. He declined to comment on speculation that Nasdaq OMX had at one point been in talks to buy Chi-X.Analysts have said deterioration in equity markets – and sharp declines in the value of trades done – means some of the MTFs are unlikely to survive. Intense competition between similar share trading platforms in the US some years ago resulted in the failure of some, while others were snapped up by incumbent exchanges – including Nasdaq itself. Those that have done relatively well so far – including Chi-X – have benefited from having as shareholders the high-frequency trading firms that are increasingly being drawn to Europe’s equity markets.However, Nasdaq OMX Europe’s sole shareholder is its parent, Nasdaq OMX. Mr Greifeld said this had its advantages: “At the end of the day we have staying power.” Separately, Mr Greifeld said that clearing over-the-counter (OTC) interest rate swaps held out the prospect for greater business than clearing of credit default swaps, currently the focus of Nasdaq’s rival exchanges and of efforts by policymakers to “re-regulate” the financial sector.