G’day All,
On Default Funds….
I had a look at the HK Exchanges quarterly report.
P40, Notes to accounts 18e).
“Consequently, the designated reserves of the Clearing House Funds were reduced by $163,203,000 in the year ended 31 December 2008, which was attributable to firstly the forfeited contributions of the defaulting Clearing Participant”
http://www.hkex.com.hk/relation/reannt/2009qiarep.htmJust a note to self. Yes CCPs have defaults, Lehman was one of these and in some cases, there were calls on mutual guarantee funds. HK for example.
On self interest….
Exchanges will always vote for an extension of their monopoly. Their viewpoint is MTFs and ECN are of course bad things because they fragment liquidity and hence compromise price discovery. Of course I disagree and even the Oxera study agrees that MTFs have brought about a reduction in costs. It is this angle that I think does no credit to this week story from DTCC. Of course DTCC want their trade warehouse to be awarded monopoly status. But I think this really misses the point of the great work they did during their piece of the Lehman default. I’d rather see more weight on the positive aspects of their proven abilities than the more ‘negative’ we want a monopoly in CDS. Let technology busy itself with knitting together fragmentation. We don’t need regulatory decrees to stifle innovation. I also see CFTC urges competition in some subsequent stories.
On retail…
I was surprised to read Citadel…hopes to replicate its success in the US market, where it executes 2 million off-exchange retail orders a day and accounts for over 40% total US retail order flow. I was unaware of the retail penetration they have over there. This also makes a nice parallel tie in with the Optiver and Binck Bank offering of The Order Machine in the Netherlands.
Ummm…
LSE…should not forget it’s core business. If it wasn’t for it’s customers it couldn’t diversify. It should diversify…and I bet it regrets being saddled w/ 600myn debt.
Infrastructure should be flexible…user owned utilities must work side by side with for-profit. Otherwise the ‘utility’ aspects get eroded over time by inefficiency.
OTC…we still need to quantify size of market and what is the opportunity we’re buying into.
Yea! Go for…Clearnet (conflict, former employer, but I’m still allowed to like ‘em!) – they geddit, go for…growth.
FSA…urky purky. Conservatives killing FSA is misdirected shooting of the messenger. Bad call on what I think is by and large a good brand. We need reform and repair, not revolution. Conservatives should just shut up and let Brown keep on merrily sinking the ship.
If anyone’s been on a pig farm…they’ll agree…1.7myn is a bargain to fix the stench.
Off to the Gold Coast (GC) this week for the sister-in-laws wedding. Why don’t people plan these things around my kids school year? I’ll test the waters on the GC but at the moment training is for the City to Surf (14K run). I also have some reading with me…I wonder if anyone will nick my copy of the Oxera report? More likely I’ll get fined for littering. I’ll also be thinking about http://www.oceanswims.com/oceania/manafiji.html. I’m missing my riding at the moment, especially after watching Lance in the Tour de France. (imagine, Lance and I in the same sentence!). I should be watching the Kiwis beat the Boks…and I will, but I’m strangely drawn to the Tour this year. Whatever goes on in Armstrongs personal life, I sure wish him a podium finish in this years tour. Mans a legend. My own tour will be somewhat more modest… http://www.springcycle.com.au/
Have a good ‘un all. I’ll be on the b’berry. Why not?
S
http://clearingandsettlement.blogspot.com/
Clearing
Clearing landscape lacks clarity The London Stock Exchange last week reported its revenue for the three months to the end of June and, barely 60 days into his tenure as the exchange’s chief executive, Xavier Rolet may have found himself having to pardon his French – the numbers made grim reading.
The time is right to resolve the infrastructure problem Who should own and control financial market infrastructures? Should they be run as user-governed utilities, or as privately owned and independently controlled entities? This question has never been answered satisfactorily or even submitted to comprehensive high-level scrutiny.
OTC clearing houses to share $400m The greater use of clearing over-the-counter trades as a result of political and regulatory pressure will add $400m (€284m) to the combined annual revenues of four financial groups, according to new research. However, the figure is lower than many had expected as the groups will have to share profits to achieve a "buy-in" from dealer banks.
Clearnet emerges as top contender to clear CDS in EuropeAfter LCH.Clearnet struggled to move forward with clearing over-the-counter credit default swaps in the UK, its French subsidiary, Clearnet, has become the leading contender to do so across Europe. French regulators have been advocating basing a CDS clearer in Paris to serve the euro zone. The goal is to develop the city as a financial hub of Europe. LCH.Clearnet launched a clearing facility for CDS in December, but it was shelved after failing to attract interest. Financial Times (tiered subscription model) (20 Jul.)
23/07/2009 13:03:00
ICE TRUST SETS OUT PLANS FOR BUY-SIDE PARTICIPATION IN CDS CLEARING
IntercontinentalExchange (ICE) says it will introduce a solution that will enable buy-side participation in credit default swap clearing by October.
More on this story: http://www.finextra.com/fullstory.asp?id=20302
CPSS AND IOSCO FORM WORKING GROUP TO REVIEW APPLICATION OF OTC CLEARING RECOMMENDATIONS
http://www.finextra.com/fullpr.asp?id=28686
DTCC CHIEF STRESSES IMPORTANCE OF SINGLE TRADE REPOSITORY FOR OTC DERIVATIVES
http://www.finextra.com/fullpr.asp?id=28722
CFTC chief urges competition in derivatives clearing
By Jeremy Grant in London
The US futures regulator on Wednesday insisted traders should be able to choose between exchanges that offer trading and clearing of over-the-counter derivatives, signalling that the Obama administration may be starting to address barriers to competition in exchange-traded derivatives markets. Gary Gensler, chairman of the Commodity Futures Trading Commission, said in congressional testimony that as OTC derivatives became standardised and moved onto exchanges and other electronic platforms, open positions between the various platforms should be “fungible”.
http://www.ft.com/cms/s/0/f6474a8a-76f0-11de-b23c-00144feabdc0.html
CFTC's Gensler encourages competition in OTC derivatives trading
http://www.smartbrief.com/news/nyssa/storyDetails.jsp?issueid=62E088FA-8E53-41C1-B817-CF1B3A379425©id=DF77894D-0B88-42CE-952F-1A8BCA3CEABE
Platforms
Equiduct enters into strategic partnership with Citadel Securities
http://www.equiduct-trading.com/latest-press-releases/21-07-09--equiduct-enters-into-strategic-partnership-with-citadel-securities.asp*** Equiduct was founded in 2007 by Börse Berlin, a small German regional stock exchange, with a 53 per cent stake. Jos Peeters, a Belgian venture capitalist and founder of the former Easdaq exchange, held 23 per cent with the rest held by Knight Capital and other investment banks, including Goldman Sachs.
*** Citadel is building up its European business, which it launched in Italy and the UK last September. It hopes to replicate its success in the US market, where it executes 2 million off-exchange retail orders a day and accounts for over 40% total US retail order flow.
In addition to its investments in Direct Edge and Equiduct, Citadel has a stake in pan-European multilateral trading facility (MTF) Chi-X Europe. It is also among the six initial liquidity providers in Turquoise’s dark liquidity aggregation service.
21/07/2009 15:34:00
ALGO REVIVAL POWERS SURGE IN ELECTRONIC TRADING VOLUMES
A surge in algorithmic trading helped drive a significant increase in the share of US equity trading volumes executed via electronic platforms last year, according to the results of Greenwich Associates' 2009 US Equity Investors Study.
More on this story: http://www.finextra.com/fullstory.asp?id=20292
NYSE poised to make London switch Transatlantic exchange NYSE Euronext is set to shift its main European trading system to London in order to better compete with a slew of new rivals, dealing a blow to French efforts to position Paris as Europe's financial capital.
*** The exchange will also be able to base trading of all European instruments in one location, as it moves its disparate markets onto a single Universal Trading Platform. The exchange’s derivatives market, Liffe, is already located in the UK capital, as is its European dark pool, SmartPool, and it plans to move its alternative equities market, NYSE Arca Europe, from Paris to London in October
Regulation
FSA gets tough in wake of financial crisisThe UK Financial Services Authority adopted a tougher stance to regulation by scrutinising the business plans of brokers, requesting more data and attending banks' board meetings. Watchdog officials said the changes stem from the collapse of Northern Rock and other issues within the banking system. "There's a lot more detailed investigation and requests for numbers, a lot more fundamental analysis of the building blocks. We are a lot less reliant on what the firms are telling us," said Lyndon Nelson, head of risk at the FSA. Financial Times (tiered subscription model) (19 Jul.)
Conservative White Paper to propose FSA abolition George Osborne, the shadow UK chancellor, will on Monday unveil the Conservative white paper on banking reform, proposing to abolish the Financial Services Authority and divide its responsibilities between a bolstered Bank of England and a new consumer protection agency. (The Guardian)
Asia
NASDAQ OMX PRESIDENT MAGNUS BOCKER QUITS FOR SGX ROLE Nasdaq OMX president Magnus Bocker is quitting the market operator to take over as chief executive officer of the Singapore Exchange.
Full story: http://www.finextra.com/fullstory.asp?id=20287
Alternative Trading Systems Take Bite Out of TSE in JapanThe Tokyo Stock Exchange is facing a big challenge to its iron-grip hold on cash equities trading
* PTS share of equity trading tiny but rising fast
* TSE launching new system in January to counter rivals
* Unbundling regulation could determine fate of PTS
HK unveils $800M plan to pay back Lehman investors
By JEREMIAH MARQUEZ
HONG KONG – Hong Kong banks agreed to return more than $800 million to investors burned by Lehman Brothers-backed products, potentially ending a nearly yearlong dispute that sparked street protests and exposed problems in the financial center's markets.
http://news.yahoo.com/s/ap/20090722/ap_on_bi_ge/as_hong_kong_lehman_investors_2
Singapore's SMX appoints Stanchart as clearing bank
SINGAPORE, July 22 - The Singapore Mercantile Exchange , set to launch futures trading in various commodities and financial products in the fourth quarter of this year, has appointed Standard Chartered Bank as its clearing and settlement bank.
http://malaysia.news.yahoo.com/rtrs/20090722/tbs-singapore-exchange-a5a65c6.html
Besides banking facilities for clearing members of SMX, Stanchart would also provide employee banking services to the exchange, the two organisations said in a joint statement on Wednesday.
Summary (JPM)
· Liquidity fragmentation in Europe last week was down 2.2% to 23.1%, driven by Germany, France and Netherlands.
· Ireland (65.7%), UK (35.8%), France (27.1%), Netherlands (26.7%) and Germany (23.5%) were the most fragmented markets in percentage terms.
· UK ($2.5bn), Germany ($1.4bn), France ($1.3bn), Switzerland ($0.4bn) 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 $4.5bn, equivalent to 14.9% of flow in Chi-X names. Total ($96m, 21.6%), HSBC ($91m, 19.6%) and Deutsche Bank ($83m, 15.3%) had the highest ADT.
· ADT on the Turquoise Displayed Order Book was $1.2bn. Market share in Turquoise names was 3.9%. Nestle ($34m, 10.1%), Roche HLDG P ($32m, 11.9%) and Novartis ($24m, 9.0%) had the highest ADT.
· BATS achieved ADT of $1.0bn. Market share in BATS names was 3.4%. Total ($28m, 6.3%), ENI ($22m, 5.0%) and Rio Tinto ($21m, 6.7%) had the highest ADT.
· Nasdaq OMX achieved ADT of $236.7m, a new high.
· 19 stocks traded more than 20% ADV on Dark venues.
Junk
Swine stench spurs multimillion-dollar settlementsThe government has earmarked $1.7 million to help the USDA's Swine Odor and Manure Management Research Unit figure out what makes pigs stink
Scott Riley
EMCF Business Development
European Multilateral Clearing Facility
8th Floor 50 Bridge Street Sydney Australia 2000
((Off)+61 (0)2 8916 9634 È(Mob): +61 (0)418 117 627
* scott.riley@au.fortis.com
G’day All,
I’ve not had a chance to do much reading this week so I may have missed a few developments along the way.
Cest la vie.
Not much hope of any respite next week and the week after I’ll be travelling.
Oxera study.
I’m a big fan of a formal study of infrastructure costs. At the outset, I said the Oxera terms of reference were too complex. At first flick through of the report…it is 123 pages…my fears appear to have come true. What is important is context. What a client pays is different to market users (retail / wholesale if you like). And I fear the report loses some accessibility. I also don’t like the fact you can’t cut and paste from the report…how is one supposed to share and discuss the content? (e.g. please refer to page iv, para 1&2).
We know trading costs have come down. Thanks MTFs. We know clearing costs have come down. Thanks EMCF. But how much have they fallen, where have they fallen and what trend can we expect. Figure 4.3 p24 doesn’t really help. Table 4.9, 58% fall in clearing costs is interesting in Belgium is interesting but I want to see the starting point, the effects of competition etc.
My initial view – the useful data that market users want (i.e. industry keeping infrastructures honest) has become inaccessible.
LSE.
All the recent infrastructure initiatives in Europe have recognised the importance of the correct / or open ownership and governance model. The main take-away is that EMCF has the structure to allow this to happen. Also interesting is the strategic view LSE is taking on post trade. Nasdaq has also been active in this space.
…and here we come to context / related stories.
Nasdaq exits Oslo, where they are supposed to use LSE technology….
…and then we read LSE is going to ditch TradeElect….
…and that was a nice blog from computerworld: http://blogs.computerworld.com/london_stock_exchange_to_abandon_failed_windows_platformBasically, I think you need to read and think about each story in the context of the market and the business. Some messages overall are inconsistent, but considered in an individual market, in the right context, there is a logic.
*** oh and moving back to a taker / taker pricing model will not work. They’ll change back.
LCH.
2008 report and accounts still not up on the web site.
More and more I think LCH should be split up. The 1.2 byn merged company is there no longer. There are different business streams with different growth prospects and competitive outlooks. Exchange flows are commoditised (equities, derives etc.), OTC flows are a growth sector.
I do agree with Tabb, not all CDS will be centrally cleared. Still, there will be enough to make a business case.
CDS & Fed Reserve.
Oh woe is me. Please tell me I’ve read this wrong! ICE Trust rules require participants to post IM and VM. Is the Fed saying that ICE is so bad at performing it’s risk management duties there needs to be an extra 20% loading? Whats the point of a CCP doing risk management and stress testing? This just looks like a 20% capital tax to slow the business which is completely contradictory to Fed mantra of putting more CDS business through a CCP. How did this happen?
Hmmm, on reflection looks like some negative views from me.
On the bright side….
Oxera – yea, fees are falling.
LSE – yes, customers are getting choice and costs are being driven down.
LCH – great to see them engaging with customers
CDS – maybe I’ve mis-understood this.
Aust v the All Blacks tomorrow. Not brave enough to call a result.
Ashes. Thanks for throwing those wickets away after a strong start. I was getting upset.
BTW, post Cardiff the local press claims England CHEATED! – ungrateful Poms (especially as we had to fetch some Londoner out of the Blue Mountains – after watching him walkabout and eat grubs for 12 days)
Have a great week-end.
S
Clearing
ROLET CLOSE TO LSE ACQUISITION Xavier Rolet is planning to make his first acquisition as chief executive of the London Stock Exchange, after opening talks to buy a stake in Europe’s second largest clearer, Dutch supplier European Multilateral Clearing Facility, according to three sources close to the exchange
http://mail.efnmail.co.uk/r/100903240/MjU3MzA2OjIxODQy/
LSE chief wants to expand into corporate bondsXavier Rolet, CEO of the London Stock Exchange, will unveil his strategy for the 300-year-old bourse in September. Rolet is looking into services by the LSE that would allow the trading of corporate bonds. "If you look at the UK corporate-bond market, it's very difficult for many investors to get in," Rolet said. "We're considering rolling out [trading] to other countries, including the UK, based on demand." Financial Times (tiered subscription model) (15 Jul.) , The Wall Street Journal (16 Jul.)
*** Agree. If you’ve ever tried to buy a corporate bond – it’s hard. (especially when there are some serious minimum order sizes, like bigger than my mortgage)
LCH Said to Have Rejected Sweetened Bid From ICAP-Led Group
By Nandini Sukumar
July 15 (Bloomberg) -- LCH.Clearnet Group Ltd. rejected a sweetened takeover offer from a group of banks and brokers including ICAP Plc, Deutsche Bank AG and JPMorgan Chase & Co., according to two people familiar with the situation. The group gave London-based LCH.Clearnet three different options, including a 12 euro-per share bid which valued the agency at 887 million euros ($1.25 billion). The consortium also gave shareholders the option of an all-cash offer of 10 euros a share, as well as a third possibility for cash of less than 10 euros a share that included a stake in the new business, the people said. LCH.Clearnet, which provides guarantees for about half of Wall Street’s interest-rate swap transactions, turned down the bids last month because they weren’t high enough to justify the loss of control for smaller shareholders, according to the people, who declined to be identified.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ah53hFo4VDk4
Commission publishes Oxera report on clearing and settlement costs in Europe
http://ec.europa.eu/internal_market/financial-markets/clearing/communication_en.htm#monitoring
ICE Trust Clearinghouse Is as Risky as Major Bank, Fed Says
By Matthew Leising
July 14 (Bloomberg) -- The U.S. Federal Reserve has determined that ICE Trust, the only clearinghouse backing trades in the $28 trillion credit-default swap market, is as risky as any insured bank.
The Fed is requiring bank members of ICE Trust such as Goldman Sachs Group Inc. and Citigroup Inc. to set aside capital representing 20 percent of the money they have committed at the clearinghouse in the form of margin and guarantee funds, according to a June 5 letter posted today on the regulator’s Web site. That’s the same reserve requirement parties must meet for trading with insured banks.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aApUGfmhqwBI
Members must post initial margin on every transaction and will then be required to post variation margin in accordance with End-of-Day (EOD) mark-to-market processes run by the clearing house.
https://www.theice.com/publicdocs/clear_us/ICE_Trust_FAQ.pdfhttps://www.theice.com/ice_trust.jhtml
TABB Group Says Majority of Global CDS Products Will Never Be Centrally Cleared in the US and Europe
NEW YORK & LONDON--(BUSINESS WIRE)--In new research published today, TABB Group says the majority of credit default swaps (CDS) products blamed for adding significant systemic risk to the global financial markets will never be centrally cleared in the United States and Europe.
http://finance.yahoo.com/news/TABB-Group-Says-Majority-of-bw-3368383609.html?x=0&.v=1
MOST GLOBAL CDS PRODUCTS WILL NEVER BE CENTRALLY CLEARED IN US AND EUROPE - TABB
http://www.finextra.com/fullpr.asp?id=28642
Sovereign CDS trading increasingly popular, bankers sayTrading volumes in sovereign credit default swaps have jumped fivefold since the collapse of Lehman Brothers in mid-September, bankers said. "The Lehman event was a big turning point for sovereign CDS. Bank risk started to be transferred to governments, and investors wanted protection on sovereigns," said Francois Puget of BNP Paribas. "For the first time, people were thinking the unthinkable -- that a triple-A country could actually default -- and that brought a lot of investors into the sovereign CDS market." Financial Times (tiered subscription model) (13 Jul.)
*** good product.
Big companies go to Washington to fight regulations on fancy derivatives Any doubt about how broadly US corporations rely on fancy financial instruments vanishes with a look at who's lobbying Congress to forestall tougher regulation.
*** spot on, it’s about context. Good old KYC.
KfW exec defends securitisation as "economically useful"Securitisation has been criticised as the financial crisis continues, but some industry insiders are taking a stand in support of the practice. "KfW emphasises its firm commitment to securitisation as an economically useful instrument," said Gunther Braunig of KfW, a state-owned development bank in Germany. "After all, the lack of securitisation opportunities is one reason for the growing deterioration of the credit supply for KfW's target groups. KfW, therefore, will maintain its securitisation activities in order to support the lending operations of banks for [small to medium-sized enterprises] and private construction." EuroWeek (14 Jul.)
*** of course securitisation is an economically useful instrument. No debate.
CME LAUNCHES CLEARING SERVICES FOR OTC LONDON GOLD FORWARDS
http://www.finextra.com/fullpr.asp?id=28590
TRAYPORT LINKS TO LCH.CLEARNET
http://www.finextra.com/fullpr.asp?id=28563
EUREX CLEARING SAYS WILL MEET ISLA GUIDELINES
http://www.finextra.com/fullpr.asp?id=28589
The International Securities Lending Association (ISLA)
Please find attached an initial report of a working group of representatives from ISLA member firms on a CCP in the securities lending market, focusing mainly on equity loans in European markets. Any comments are welcome to admin@isla.co.uk and will be published by ISLA unless requested otherwise.
http://www.isla.co.uk/uploadedFiles/Member_Area/General_Library/CCPISLA.pdf
SIFMA WELCOMES CDS CENTRAL COUNTERPARTY ANALYSIS
http://www.finextra.com/fullpr.asp?id=28584
NEW YORK FED BACKS CDS CENTRAL COUNTERPARTY LEGAL ANALYSIS
http://www.finextra.com/fullpr.asp?id=28583
Hong Kong cracks down on Lehman BrosFollowing last year's Lehman Brothers collapse, the Hong Kong Monetary Authority has revealed there are still 930 cases involving the failed bank still under disciplinary consideration within the Chinese state.
Read more »*** did they ever make a final call against members of the HK CCP for the Lehman default? (my last understanding was the mutual default fund was going to be called on).
T2S GAINS MULTILATERAL AGREEMENT, DESPITE UK CONCERNS The European Central Bank (ECB) and the 16 national central banks of the euro area have signed a Memorandum of Understanding with 27 European central securities depositories covering obligations and responsibilities for the next stage of the Target2-Securities (T2S) project.
Full story: http://www.finextra.com/fullstory.asp?id=20278
IOSCO PUBLISHES EXCHANGE OUTSOURCING GUIDELINES The International Organisation of Securities Commission (Iosco) has published a set of principles designed to assist exchange operators and regulators when considering outsourcing arrangements.
Full story: http://www.finextra.com/fullstory.asp?id=20250
Infrastructure
US JUSTICE DEPT. INVESTIGATES MARKIT SHAREHOLDERS - BLOOMBERG The US Justice department is probing the shareholders of London-based data provider Markit for possible anti-trust breaches in relation to trading in credit default swaps, according to Bloomberg.
Full story: http://www.finextra.com/fullstory.asp?id=20259
Nasdaq exits fractious Oslo exchange stake Nasdaq OMX has sold its stake in Oslo Børs, the only Scandinavian stock market it does not control, following a dispute between the two companies that began when the Norwegian exchange decided to source technology from the London Stock Exchange.
Exchanges Launch Orders Aimed at Eliminating Appearance of Self-TradingBATS Exchange on Friday will begin offering new types of orders which allow broker-dealers to essentially offload their efforts to ensure against the appearance of creating wash trades. BATS' move would to help headoff the appearance of self-trading beats rival electronic network NYSE Arca to market by one business day. BATS' new order types will launch July 17 under a program called Member Match Trade Prevention. NYSE Arca will launch its Self-Trade Prevention modifiers July 20.
Local funds won't follow CalPERS lawsuitOne of the US' biggest pension funds, the $223 billion CalPERS, has filed a lawsuit against three of the world's most powerful rating agencies to claw back some of its losses from the GFC, but local super funds look unlikely to follow suit.
Read more »
London Stock Exchange to abandon failed Windows platform
http://blogs.computerworld.com/london_stock_exchange_to_abandon_failed_windows_platform
The London Stock Exchange's decision to abandon its maker-taker pricing structure from September – exactly a year after it was first introduced – has won praise from some brokers, but has left others scratching their heads about the apparent u-turn.
Read story
BATS Europe to enhance monetary incentives for tradersBATS Europe is fueling the price war in dark-pool equities trading by becoming the first such operator to offer monetary incentives to traders who post orders. BATS is expected to announce that it will add a dark pool on 7 August. The company plans to implement a "maker-taker" pricing model. Financial Times (tiered subscription model) (16 Jul.)
*** maker / taker in the dark.
BATS EUROPE DARK POOL SET FOR AUGUST LAUNCH
http://www.finextra.com/fullpr.asp?id=28643
Asia
Credit Suisse AES Launches Block Crossing in Australia
http://advancedtrading.com/crossingnetworks/showArticle.jhtml;jsessionid=QXDQRIBHTIC4EQSNDLRSKHSCJUNN2JVN?articleID=218500303&_requestid=392827
Summary (JPM)
· Liquidity fragmentation in Europe last week was up 1.3% to 25.3% (a new high), driven by the Germany and Netherlands.
· Ireland (74.1%), UK (36.2%), France (32.5%), Netherlands (30.6%) and Germany (28.5%) were the most fragmented markets in percentage terms.
· UK ($2.5bn), France ($1.3bn), Germany ($1.1bn), Switzerland ($0.4bn) and Italy ($0.3bn) were the most fragmented in terms of Displayed Liquidity traded away from the primary market.
· Chi-X achieved average daily turnover (ADT) of $4.0bn, equivalent to 16.1% of flow in Chi-X names. HSBC ($114m, 22.7%), BP ($113m, 27.9%) and Sanofi-Aventis ($94m, 20.3%) had the highest ADT.
· ADT on the Turquoise Displayed Order Book was $1.1bn. Market share in Turquoise names was 4.1%. Nestle ($34m, 10.5%), Barclays ($28m, 7.3%) and HSBC ($24m, 4.8%) had the highest ADT.
· BATS achieved ADT of $0.9bn. Market share in BATS names was 4.0%. Sanofi-Aventis ($29m, 6.2%), BP ($28m, 7.0%) and HSBC ($26m, 5.1%) had the highest ADT.
· Nasdaq OMX achieved ADT of $185.52m.
· 27 stocks traded more than 20% ADV on Dark venues.
Junk
Thor Update: Portman Cast as Jane Foster
http://marvel.com/news/moviestories.8745.Thor_Update%7Ecolon%7E_Portman_Cast_as_Jane_Foster
*** I don’t know who Natalie Portman is (nor did I know who Gwenith Paltrow was before Ironman), but any love of Thors, is a love of mine.
(In the late 1990s, Portman was cast as Padmé Amidala in the Star Wars prequel trilogy.)
When a man buys a hat, he wants one just like the one he has had before.
But a woman isn’t that way.
- Edgar Watson Howe.
Conscience is a man's compass."
--Vincent van Gogh
Scott RileyEMCF Business Development
European Multilateral Clearing Facility
8th Floor 50 Bridge Street Sydney Australia 2000
((Off)+61 (0)2 8916 9634 È(Mob): +61 (0)418 117 627
* scott.riley@au.fortis.com
G’day All,
Good luck to ELX.
I’ve had a few questions on dark pools etc. So this week I’ve just put in some of the stories I’ve come across. I hope this helps.
Clearing: I remain a big fan of context and suitability.
The rant bit:
International policy formation: I don’t like the cost of compliance aspect of this. I do fully agree with Angela Knight (BBA), early and positive engagement with European (relevant regulators) is essential. The G20, BIS, CPSS-IOSCO already knock out plenty of good stuff. What we need is to first comply with what we have, then identify the shortfalls (and the context of them – national jurisdiction etc.), then revise, respond and develop new policies. What’s the point of more regulation if we’re not using the tools we already have at our disposal? Where regulatory repair is identified, lets repair. I am in favour of international standards and alignment – after all, that is the nature of Financial services, but lets focus on product areas: e.g. Clearing, OTC clearing, settlement, short selling, stock lending, exchange order types. Etc, etc. Each of these areas need an international response complemented by local experience and expertise. The international unit will always get it’s content / credibility from the operating divisions / day to day front line.
What is this rant about?...we don’t need an FSA (or substitute any regulatory jurisdiction) International Policy Unit…what we need is representation of the correct department (with the “coal face” experience / content) at the international policy setting table (G20, CPSS, BIS etc.)
…for 34 pounds and 55 pence you can buy this 176 page report:
http://www.hm-treasury.gov.uk/d/reforming_financial_markets080709.pdfReforming financial markets
Presented to Parliament by The Chancellor of the Exchequer
by Command of Her Majesty
July 2009
(I’m wary of the winds of political change).
…and as for Robbie Deans (current wallaby coach). Most impressive. Undoubtedly a man that wants to invest in his players and see them perform, for the betterment of themselves. Personally, I’m still nervous about the power of the wallabies (player stock) and their ability to dictate the game plan. But I think we have a better chance with Robbie at the helm than any of the current “home grown” talent. Our gain, certainly in my mind, is NZs loss. Man to Man: Deans, Henry? Yeah, we all know the answer.
(…after writing this I notice Henry as a formidable track record: the All Blacks have won 57 out of 66 Tests….also defended the Bledisloe Cup in five successive seasons, won the Tri Nations four times, achieved a clean-sweep of the British and Irish Lions in 2005, and won two Grand Slams in 2005 and 2008. They have lost only once in Europe and just twice in New Zealand, in 2008 to South Africa and last month to France in Dunedin.)
…NZ retaliation:
Why are Aussies so good at batting in cricket?It's the only game they could master wearing handcuffs.
And finally, I really respect the 45 pearls of wisdom attributed to Regina Brett (it was just a forwarded email, I’ve done no checking).
A junk item worth a read.
Have a great week-end all.
School hols here.
S
http://clearingandsettlement.blogspot.com/
Infrastructure
03/07/2009 16:30:00
NYSE RESORTS TO OPEN OUTCRY AFTER COMPUTER MALFUNCTIONS
The New York Stock Exchange resurrected the dying art of open outcry at the close of play Thursday after a series of computer snags interrupted trading and forced the Exchange to extend the closing by 15 minutes.
More on this story: http://www.finextra.com/fullstory.asp?id=20224
LONDON STOCK EXCHANGE INTRODUCES NEW ORDER BOOK PRICING
http://www.finextra.com/fullpr.asp?id=28414
LSE AXES JOBS; CONSIDERS SCRAPPING TRADELECT The London Stock Exchange is cutting around 120 jobs and considering dumping its TradElect platform, as new chief Xavier Rolet looks to restructure the business and fend off competition from a slew of smaller but nimble competitors.
Full story: http://www.finextra.com/fullstory.asp?id=20194
Chi-X claimed to be sole MTF to hit 'break even' criteria Chi-X Europe is the only firm among the new breed of multi-lateral trading facilities that is “close” to being able to break even, according to a new report on the effects of the Mifid reforms that ushered in the new entrants.
BATS CLAIMS LAND GRAB SUCCESS
http://www.finextra.com/fullpr.asp?id=28409
BATS PLANS US OPTIONS EXCHANGE
Bats Global Markets says it plans to launch a US equity options exchange in the first quarter of next year.
Full story: http://www.finextra.com/fullstory.asp?id=20235
Nordic MTF claims 8% of Swedish equity market
07/07/2009 14:30:00
VIENNA STOCK EXCHANGE TO MIGRATE DERIVATIVES TO EUREX SYSTEM
The Vienna Stock Exchange has outlined plans to ditch its current OMex system for derivatives trading and migrate over to the platform of Deutsche Boerse unit Eurex.
More on this story: http://www.finextra.com/fullstory.asp?id=20232
Trading duo combat market fragmentation Two European trading groups have taken steps to offer their customers better access to the rising number of equity markets in the region, as buyside firms and their brokers risk missing out on the best prices in an increasingly fragmented trading environment.
*** ignore the story / actors. The point here is 2 and ½ years after Chi-X launch, almost 2yrs post MiFID, the network effect / distributed model is still taken effect. This is the same as last weeks TT/ELX story. Distribution takes time (and typically driven by customer demand – but it is such a “chicken & egg” game).
09/07/2009 11:12:00
ELX FUTURES OFFERS FREE TRADES DURING JULY
ELX Futures, which is set to launch tomorrow, says it will not charge for trades in July as it looks to strike an early blow in the battle to take market share from the dominant CME Group.
More on this story: http://www.finextra.com/fullstory.asp?id=20239*** good luck ELX!
Dark Pools
(based on some questions on this last week)
*** when will dark pools become the victim’s of their own success…i.e. required to provide more transparency due to materiality?
How the ‘hidden equity market’ operatesQ) What is a dark pool?A) A dark pool is an electronic equity system that differs from an exchange order book by hiding attributes of an order, such as the price or the identity of the broker.Q) Who provides these systems?A) Agency brokers ITG and Liquidnet were the first to launch in Europe, but in the past two years every investment bank worthy of the name has been building and marketing its European dark pool. More recently US brokers, such as Instinet, Liquidnet and Nyfix, and Europe’s stock exchanges have got in on the act with NYSE Euronext launching its Smartpool in March and the London Stock Exchange opening its Baikal system last week.Q) Why are they important?A) Buyside dealers and sellside traders have long complained the exchange order book, the standard mechanism for European share trading, gives up to the market at large vital information about an order. This is less of an issue for normal-sized orders, but this transparency can be problematic when a trader is looking to execute a large block of shares or an order in an illiquid stock because rivals can see what is happening and trade against, or “front-run”, the order, which can prove costly.Q) What is the downside?A) Regulators are suspicious of dark pools for the very reason traders like them – their opacity. European regulatory body the Committee of European Securities Regulators has been peering into the dark this year while the UK’s Financial Services Authority clamped down on some dark pools earlier this year, forcing them to change how they generated prices.The emergence of numerous dark pools has also confused traders because there is no way of knowing which pools have liquidity in a certain stock. Trading firms have to “sweep” each dark pool separately, which can waste time, a problem some firms are looking to tackle by “aggregating” dark liquidity on behalf of their customers.
DARK POOLS BRACED FOR UNCHARTED WATERS Dark pools are not the “new black” anymore – they have been in Europe for more than a decade – but last week these esoteric trading systems emerged as the new battleground for European exchanges and their ambitious rivals.
http://mail.efnmail.co.uk/r/97814999/MjU3MzA2OjIxNzY2/
EUROPEAN DARK POOL TRADING VOLUMES SURGE The value of shares traded in dark pools soared in the second quarter even as volumes in other equity markets stagnated, according to new data. The figures help illustrate why companies are rushing to launch anonymous trading systems despite concerns that they harm market transparency.
http://mail.efnmail.co.uk/r/97814985/MjU3MzA2OjIxNzY2/
Order types that briefly display unfilled marketable orders to a trading venue's members before routing them elsewhere can benefit the buy-side, but there are also potential dangers inherent in their use, industry experts suggest.
Read story
New Turquoise service to link six broker dark poolsCA Cheuvreux, Citadel Securities, Citi, Deutsche Bank, Bank of America Merrill Lynch, and Nomura.
29/06/2009 10:47:00
DARK POOL PRICING SET TO TUMBLE AS BATS EUROPE ENTERS FRAY
Bats Europe is to enter the increasingly crowded dark pool market in August with an aggressively priced system that will reward participants that add order volume whilst charging to remove liquidity in the dark.
More on this story: http://www.finextra.com/fullstory.asp?id=20197
Dark Pools Struggling to Survive in Europe
July 8, 2009 - Exchanges’ shares of overall trading in Europe has dropped 5 percentage points in the two years since the arrival of the European Union’s Markets in Financial Instruments Directive. But dark pools of investment capital have only captured a scant 0.5 percent of trading, according to a report from Celent, a Boston-based financial research and consulting firm.
http://www.securitiesindustry.com/news/-23653-1.html
BIDS Trading Answers Your Dark Pool QuestionsThe number of dark pools continues to grow, but according to a recent Greenwich Associates survey, many institutional investors do not have a clear understanding of what differentiates each pool. To make your dark pool selection easier, BIDS Trading provides answers to 10 key questions that an institution should ask when evaluating a dark pool.
Clearing
Corporates incensed by US clearing plans If banks provide the fuel for modern economies, then corporates are its engines. Without them, we would earn and consume nothing, trade would evaporate, savings would be wiped out, banks would fail and tax receipts would plunge.
Central Clearinghouse-Standard is Nice, Suitable is BetterNot all bilateral derivatives contracts are suited for central clearing and/or electronic trading.
(Tabb report)
EC calls for 'substantial' growth in OTC derivatives clearing The European Commission today published its long-awaited report aimed at shaking up the over-the-counter derivatives market. The report advocates that clearing "grow substantially to cover large parts of OTC derivatives”, but stopped short of calling for trades to be forced onto exchanges. Financial News summarises the main points.
*** The EC web site and link to report is below:
On 3 July 2009 the Commission adopted a Communication on ensuring efficient, safe and sound derivatives markets. The Communication looks at the role played by derivatives in the financial crisis and at the benefits and risks of derivatives markets, and assesses how risks can be reduced. It is accompanied by a Staff Working Paper, which contains an overview of (i) derivatives markets, (ii) OTC derivative market segments, and (iii) an assessment of the effectiveness of current measures to reduce risks, notably as regards CDS.
http://ec.europa.eu/internal_market/financial-markets/derivatives/index_en.htmhttp://ec.europa.eu/internal_market/financial-markets/docs/derivatives/communication_en.pdf
Derivatives Markets – Frequently Asked Questions
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/314&format=HTML&aged=0&language=EN&guiLanguage=en*** I also liked this general introduction
Eurex and ICE clearing race amid Liffe postponement Eurex Clearing and the IntercontinentalExchange have become the front-runners in the race to create central clearing for a vital part of the over-the-counter derivatives markets in Europe, after rival NYSE Liffe said it had put its project “under review”. (Financial Times)
NYSE's Liffe Puts Credit-Default Clearing Project Under Review
2009-07-01 16:46:51.128 GMT
By Nandini Sukumar July 1 (Bloomberg)
Nordic clearing house drives Nasdaq OMX changes
By Jeremy Grant and Martin Dickson
Nasdaq OMX plans to expand its Nordic clearing business into the rest of Europe as the transatlantic exchange group seeks to take advantage of the increasing appetite for clearing amid the re-regulation of the financial sector.
http://www.ft.com/cms/s/0/91d61086-6b33-11de-861d-00144feabdc0.html
SIX X-CLEAR INTRODUCES CLEARING OF SWISS FRANC BONDS
http://www.finextra.com/fullpr.asp?id=28452*** Now this strikes me as a good idea. Post GFC with our markets awash with bonds, clearing makes good sense.
ECB builds user base for trade-settlement hub National settlement houses from 15 eurozone nations will sign nonbinding pacts to use Target 2 Securities, the European Central Bank's proposed settlements system, following its launch in 2013, said Gertrude Tumpel-Gugerell, a member of the ECB's executive board. (The Wall Street Journal)
ECB expects Bank of England to join settlement projectGertrude Tumpel-Gugerell, an executive board member of the European Central Bank, said the Bank of England will likely participate in the ECB's stock and bond settlement project. She said the move would further reduce costs for investors. Tumpel-Gugerell also said numerous national settlement houses are planning to use the ECB settlement system, Target 2 Securities, when it launches in four years. The Guardian (London)/Reuters (06 Jul.) , The Wall Street Journal (07 Jul.)
BANK OF NEW YORK MELLON TAKES STAKE IN CLEARING COUNTERPARTY IDCG The Bank of New York Mellon has taken a minority stake in Nasdaq OMX majority-owned subsidiary International Derivatives Clearing Group (IDCG).
Full story: http://www.finextra.com/fullstory.asp?id=20207
The market practice document can be downloaded at www.swift.com. (expanded url below)
http://www.swift.com/about_swift/press_room/press_releases/press_releases_archive/Trade2Clear_Market_Practice_Specifications_v1.0.pdf
EUROCLEAR CEO PIERRE FRANCOTTE QUITS
http://www.finextra.com/fullpr.asp?id=28349
Regulation
FSA forges international unit The UK Financial Services Authority has forged a new division to press its influence on international policy formation, in a move that may help to allay fears the domestic authorities are not being heard in the debate on global regulation.
*** I don’t like the cost of compliance aspect of this. I do fully agree with Angelia, early and positive engagement with European (relevant regulators) is essential. The G20, BIS, CPSS-IOSCO already knock out plenty of good stuff. What we need is to first comply with what we have, then identify the shortfalls (and the context of them – national jurisdiction etc.), then revise, respond and develop new policies. What’s the point of more regulation if we’re not using the tools we already have at our disposal? Where regulatory repair is identified, lets repair. I am in favour of international standards and alignment – after all, that is the nature of Financial services, but lets focus on product areas: eg. Clearing, OTC clearing, settlement, short selling, stock lending, exchange order types. Etc, etc. Each of these areas need an international response complemented by local experience and expertise. The international unit will always get it’s content / credibility from the operating divisions / day to day front line.
GFC
Sweden’s central bank unexpectedly cut its main interest rate in half, to 0.25%, on July 2nd. The Riksbank also reduced its deposit rate to -0.25% to encourage lending, a highly unusual move which means that banks will, in effect, pay the central bank 0.25% on overnight deposits.
Conservatives blast Darling's overhaul of financial regulationThe City was cool on UK Chancellor Alistair Darling's proposal for overhauling the financial regulatory framework, while Conservatives said they would reverse the main measures should the party come into power during the next election. The proposal's biggest surprise was the suggestion that banks pre-finance a scheme to compensate customers of a collapsed bank. One banker said such a move would be "a massive failure of policymaking". Financial Times (tiered subscription model) (08 Jul.) , The Wall Street Journal (09 Jul.)
Dispensable diplomacy
Alan KohlerThis year's G8 meeting is less consequential than ever – the member countries now have little or no economic credibility after two decades of irresponsible banking and fiscal policies.9 Jul 2009 7:25 AM read more
http://www.businessspectator.com.au/bs.nsf/Article/Dispensable-diplomacy-pd20090709-TRSKJ?OpenDocument&src=kgb*** Agree, G8 not what is was. G20 is a better representative forum.
Brokers
*** and a busy week for Nomura!
CITI TO DITCH LAVAX IN FAVOUR OF TRADINGSCREEN EMS Citi is to switch from its inhouse LavaX execution management system (EMS) to a third party platform supplied by TradingScreen.
Full story: http://www.finextra.com/fullstory.asp?id=20208Netherlands to inject €2.5 billion into ABN AmroReuters (26 Jun.)
Nomura to Launch Prime Brokerage to Take On RivalsNomura Holdings plans to launch a global prime brokerage business by September as the financial crisis ...
Nomura strikes deal to acquire NikkoCiti Trust Nomura has struck a deal to purchase Citigroup’s Japanese trust banking arm for ¥19bn (€140.3m). (The Wall Street Journal)
Nomura-owned Lehman captures third spot in LSE broking market share Nomura, the new owner of Lehman Brothers’ European equities trading business, on Monday said that its newly created European equities unit was now the London Stock Exchange’s third-largest broker, behind Credit Suisse and top-ranked Merrill Lynch. (Financial Times)
REUTERS: Nomura Eyes Australia Equity LicenseBy Junko Fujita and Emi Emoto7/8/09Nomura Holdings Inc is applying for an equity license with the Australian Stock Exchange and is seeking a partner in China, a top executive said, as Japan's largest brokerage looks to expand its Asia-Pacific operations.
FINANCIAL TIMES: Nomura Shifts to the Square Mile By Daniel Thomas and Patrick Jenkins 7/6/09Nomura is in exclusive talks to move its UK business, including teams acquired from Lehman Brothers , into an office development in the City of London.In the largest office deal in the square mile since 2005, the Japanese investment bank is to move its 4,000 UK employees into Watermark Place, an office being built on the Thames. In what will be a blow to Canary Wharf, where Lehman was based, Nomura has decided to move back to the City because it sees the area as better for clients and staff.For Nomura’s Japanese management, a shift to the Square Mile is symbolically important. Kenichi Watanabe, chief executive, is keen to brand the bank as a traditional City institution.The 525,000 sq ft glass and steel building can house 5,000 people, giving Nomura room for expansion. The bank has been ramping up recruitment in the UK after the Lehman acquisition last year more than doubled staff numbers.Nomura has grown from 1,500 employees in London last September to more than 4,000. The bank has added 400 employees since January.The building, owned by Oxford Properties, the property arm of an Ontario pension fund, and UBS, was chosen for its three large trading floors and an outdoor roof terrace overlooking the Thames.Knight Frank and CB Richard Ellis are advising the owners.Nomura is said to have struck good terms on the deal given the slump in the City office market. The bank is said to have agreed several years without rent as part of a 20-year lease.The decision will provide a boost to the moribund City property market, where rents have fallen more than a third since the peak in 2007 and vacancies have risen.Nomura acquired Lehman Brothers’ European operations last autumn and quickly brought together many of the two groups’ bankers at Lehman’s old Canary Wharf HQ.But critics, including bank insiders, say Lehmanites have yet to identify themselves as Nomura bankers, in spite of “swear boxes”, fining bankers £5 a time for using the Lehman name in meetings.Nomura declined to comment ahead of an announcement due this month. Nomura is also expected today to announce that it has been granted a licence to operate in Saudi Arabia, the first Asian bank to have received approval.
Asia
MARKIT ACQUIRES TZ1 ENVIRONMENTAL REGISTRY FROM NZX Financial information group Markit has acquired the TZ1 environmental registry from the New Zealand Stock Exchange (NZX) in an all-share transaction valued at $37.1 million.
Full story: http://www.finextra.com/fullstory.asp?id=20214*** All share deal makes sense. NZX gets exposure to Markit (good growth story and ambition of energy) and Markit extends energy product.
Markit makes second push into carbon trading Markit, the London-based financial data group, has made its second push into carbon trading in two months, as it looks to expand its footprint in a market that analysts expect to grow 20-fold to $2 trillion (€1.4 trillion) by 2020.
TOKYO FINANCIAL EXCHANGE GETS RECOGNISED MARKET OPERATOR STATUS IN SINGAPORE
http://www.finextra.com/fullpr.asp?id=28436
Insiders raise concerns about derivatives clearing in AsiaExecutives at Euroclear Bank and the International Swaps and Derivatives Association are raising questions about efforts to clear over-the-counter derivatives in the Asian-Pacific region. "Japan may arguably have the economies of scale, but elsewhere it's quite a fragmented market," said Keith Noyes, regional director of the ISDA. "The question is, could one jurisdiction set up a central counterparty clearinghouse other jurisdictions would be happy to use given different currency business days and some of the political rivalries in the region?" Bloomberg (07 Jul.)
AsiaEtrading.com July 7, 2009
The Japan Securities Depository Center (JASDEC) announced June 30 that their Pre-Settlement Matching System (PSMS) was now connected to..…
http://www.asiaetrading.com/blog/japan-pushing-true-stp/
JON FAINE:
All right, Senator Sherry,… the six key economists in Australia, an open letter to you and your boss, the Treasurer, saying that the banking sector in Australia needs to be reviewed, that the big banks have now increased their market share and are in a way taking advantage of the current economic situation, to entrench their position, and their dominance in the Australian banking and financial marketplace. A response from the Government?
NICK SHERRY:
…
JON FAINE:
But four Australian banks are now amongst the 10 biggest banks in the world, which is, you'd have to agree, really weird, given the size of our economy, and they now are - well, their strength is out of proportion to the Australian economy, and indeed punching above their weight around the world, and that creates problems for us.
NICK SHERRY:
...
JON FAINE:
Or to put together….because the Australian taxpayers gave them an underwriting guarantee, and they are profiting from our underwriting of their situation.
NICK SHERRY:
...
JON FAINE:
So will you or won't you look at the banks, very quickly?
NICK SHERRY:
Well, we don't plan any systemic review of the banks...
Transcript 006 - Calls for banking inquiry - Interview with Jon Faine, ABC 774 Melbourne
http://ministers.treasury.gov.au/DisplayDocs.aspx?doc=transcripts/2009/006.htm&pageID=004&min=njsa&Year=&DocType=*** and that is another lost opportunity for Australia.
Summary
(Source: JPM)
· Liquidity fragmentation in Europe last week was up 0.3% to 24.0% (a new high), driven by the UK.
· Ireland (70.9%), UK (35.9%), France (29.9%), Netherlands (28.7%) and Germany (25.7%) were the most fragmented markets in percentage terms.
· UK ($2.7bn), France ($1.3bn), Germany ($1.0bn), Switzerland ($0.4bn) and Italy ($0.3bn) were the most fragmented in terms of Displayed Liquidity traded away from the primary market.
· Chi-X achieved average daily turnover (ADT) of $4.2bn, equivalent to 15.7% of flow in Chi-X names. HSBC ($114m, 22.7%), BP ($113m, 27.9%) and Sanofi-Aventis ($94m, 20.3%) had the highest ADT.
· ADT on the Turquoise Displayed Order Book was $1.1bn. Market share in Turquoise names was 4.1%. Nestle ($34m, 10.5%), Barclays ($28m, 7.3%) and HSBC ($24m, 4.8%) had the highest ADT.
· BATS achieved ADT of $1.0bn. Market share in BATS names was 4.0% (a new high). Sanofi-Aventis ($29m, 6.2%), BP ($28m, 7.0%) and HSBC ($26m, 5.1%) had the highest ADT.
· Nasdaq OMX achieved ADT of $156.56m.
· 16 stocks traded more than 20% ADV on Dark venues.
Junk
Clash of the titans Google launches a direct assault on Microsoft with the promise of a new PC operating system
SCIENTIFIC AMERICAN MINDFit Body, Fit Mind? Your Workout Makes You SmarterHow can you stay sharp into old age? It is not just a matter of winning the genetic lottery. What you do can make a difference
So good luck to Chris Lee…
“If you log on to www.justgiving.com/chrislee666 you'll not only see a great photo of me (well my mum said it was great), but you can read the story that drove me away from couch potato life to utter madness, to compete in this years London Triathlon.... You'll also see that my preparation for participating in the biggest Triathlon in the world..... (in less than 4 weeks time)... is about as comprehensive as my preparation for raising charitable funds.... late ...... I'm struggling !”
All money raised goes to Futures For Kids, one that …(Chris Lee)…is a trustee of. www.futuresforkids.org.uk
Written By Regina Brett, 90 years old, of The Plain Dealer, Cleveland , Ohio
To celebrate growing older, I once wrote the 45 lessons life taught me. It is the most requested column I've ever written. My odometer rolled over to 90 in August, so here is the column once more:
1. Life isn't fair, but it's still good.
2. When in doubt, just take the next small step.
3. Life is too short to waste time hating anyone.
4. Your job won't take care of you when you are sick. Your friends and parents will. Stay in touch.
5. Pay off your credit cards every month.
6. You don't have to win every argument. Agree to disagree.
7. Cry with someone. It's more healing than crying alone.
8. It's OK to get angry with God. He can take it.
9. Save for retirement starting with your first paycheck.
10. When it comes to chocolate, resistance is futile.
11. Make peace with your past so it won't screw up the present.
12. It's OK to let your children see you cry.
13. Don't compare your life to others. You have no idea what their journey is all about.
14. If a relationship has to be a secret, you shouldn't be in it.
15. Everything can change in the blink of an eye. But don't worry; God never blinks.
16. Take a deep breath. It calms the mind.
17. Get rid of anything that isn't useful, beautiful or joyful.
18. Whatever doesn't kill you really does make you stronger.
19. It's never too late to have a happy childhood. But the second one is up to you and no one else.
20. When it comes to going after what you love in life, don't take no for an answer.
21. Burn the candles, use the nice sheets, wear the fancy lingerie. Don't save it for a special occasion. Today is special.
22. Over prepare, then go with the flow.
23. Be eccentric now. Don't wait for old age to wear purple.
24. The most important sex organ is the brain.
25. No one is in charge of your happiness but you.
26. Frame every so-called disaster with these words 'In five years, will this matter?'
27. Always choose life.
28. Forgive everyone everything.
29. What other people think of you is none of your business.
30. Time heals almost everything. Give time time.
31. However good or bad a situation is, it will change.
32. Don't take yourself so seriously. No one else does.
33. Believe in miracles.
34. God loves you because of who God is, not because of anything you did or didn't do.
35. Don't audit life. Show up and make the most of it now.
36. Growing old beats the alternative -- dying young.
37. Your children get only one childhood.
38. All that truly matters in the end is that you loved.
39. Get outside every day. Miracles are waiting everywhere.
40. If we all threw our problems in a pile and saw everyone else's, we'd grab ours back.
41. Envy is a waste of time. You already have all you need.
42. The best is yet to come.
43. No matter how you feel, get up, dress up and show up.
44. Yield.
45. Life isn't tied with a bow, but it's still a gift.
Friends are the family that we choose for ourselves.
Life is a succession of moments. To live each one is to succeed."
--Corita Kent, American muralist and printmaker
Great things are done by a series of small things brought together."
--Vincent van Gogh,Dutch post-Impressionist artist
Everybody gets so much information all day long that they lose their common sense."
--Gertrude Stein, writer, poet, feminist
Scott Riley
EMCF Business Development
European Multilateral Clearing Facility
8th Floor 50 Bridge Street Sydney Australia 2000
((Off)+61 (0)2 8916 9634 È(Mob): +61 (0)418 117 627
* scott.riley@au.fortis.com
G’day All,
Been a hard graft this week. One of those weeks.
Anyway, gotta dash off to see Robbie Deans, the current Wallaby Coach (a Kiwi by “birth” – some contention over the what or how kiwis are reproduced) who I rate highly talk at dinner.
I wonder if he’ll be wearing his jandals (NZ) / thongs (Aus) / flip flops (UK)?
Being a Kiwi, I guess he will. (though he did turn out very smartly for the France game and distributed the ball nicely through the backs during warm up)
Mind you, I don’t expect anything of the calibre of our SpringBok dumbs…oops chums,
Boks continue to win in spite of their coach
Good old Peter de Villiers strikes again. Now here's a man who makes Mathieu Bastareaud seem positively sane, the Springboks coach outdoing even his own high standards of foot-in-mouth syndrome with his latest outburst.
Back to business: Fix the tick….
Roland Bellegarde, believes in defending the interests of all its customers whom we thank for their support and comments on this issue.
*** He’s right, the customer base is diverse.
Hans-Ole Jochumsen, believies that the harmonization of tick sizes across borders and marketplaces will benefit all market participants and we will be working closely together with our members to reach best possible result
*** right again.
Frank Gerstenschläger, thinks the agreed solution has the potential to stop the recently initiated 'race to the bottom' with regard to excessively granular tick sizes, and support the liquidity and efficiency of European equity markets. This will eventually benefit our customers and investors alike.
*** whoops, sorry, this one is a bit strong. It’s not about and never was about a “race to the bottom”. It was always about the optimal size to best cater to the diverse needs of the market and it’s participants.
I can’t believe any MTF thought they would take material and lasting market share by devaluing the “queue spot” (the advantage of having the smallest tick).
FESE Press release at:
http://www.fese.be/en/?inc=news&id=124
On ISV connectivity (TT/ELX). ISV’s are commercial enterprises and they need to make judgement calls. Few and far are the times I’ve done industry consultation and come up with a unanimous result. Commercial business need to make judgement calls, and sometimes this means you need to be a pioneer. Chi-X was fortunate to have many first movers who saw the opportunity in the MTF space and used it as a chance to promote their business. Good luck to them. So a plug to all the Chi-X vendors… http://www.chi-x.com/GC_Certified_Vendors.htmlSome of you weren’t there on day one, and that was your commercial judgement, and now you share a space with some new entrants.
As a new entrant, I can only wish the best of success to ELX…TT, nice problem to have to cater to so many customers.
On Clearing Standards. I’m a big supporter. The LinkUp markets shows that “standards can be agreed”. The interoperability story is also great…but the devil is in the detail. We can all talk together, but it needs to be underpinned by a legal framework. The standard is great, but the standard needs to be used / embraced to become great.
The LSE this week announced that it will lower fees on its UK order book beginning September 1, as competitors continue to win a greater share of the UK equity market.
LSE’s announcement follows similar moves at Europe’s other major exchanges. Euronext lowered cash trading fees by 20% in April and Deutsche Borse plans to cut fees by almost 30% in July.
**** It’s great to see the primary markets taking a more market oriented response to competition. Hopefully reduced fees will result in some more marginal liquidity / growth of our markets. And that’s what we should be about, growing the pie. But these announced changes are still small tweaks in the scheme of things. The Chi-X’s and EMCF’s of the world still have much to do / hold out for, before their job is done….along with the support of their participants of course!
THE Rudd government's inability to make decisions on three sharemarket operator licence applications
http://www.theaustralian.news.com.au/business/story/0,28124,25715013-5014253,00.html
School holidays here so usual Saturday sports draw not on. Might even steal a sleep in!
Swine flu appears to be finding its way into the Sydney schools network with a couple rumoured cases at both the kids schools.
They’ve stopped “swabbing” here, so pretty much given up on testing all cases.
No un-usually mad oinking in the house, but wishing everyone a happy and healthy week-end!
Gotta go, times up.
S
http://clearingandsettlement.blogspot.com/
Clearing
EMCF 2008 Annual Report
http://www.euromcf.nl/editor/uploads/annual%20accounts%202008%20(published).pdf
EUROPEAN EXCHANGES AND CLEARERS LAY DOWN INTEROPERABILITY GUIDELINES Trading and clearing venues across Europe have agreed a set of standards to cover the electronic exchange of trade information between competing market infrastructures.
Full story: http://www.finextra.com/fullstory.asp?id=20217
HELLENIC EXCHANGES AND IBERCLEAR CONNECT TO LINK UP MARKETS
http://www.finextra.com/fullpr.asp?id=28427
A Look Inside the NYSE/DTCC Derivatives Clearing VentureNYSE Euronext has joined forces with the DTCC to launch a joint venture for clearing U.S. fixed income derivatives.
*** once again, the need for an innovative clearing solution.
McCreevy sends a warning to OTC derivatives market industryThe Commission closely monitors industries commitment to clear CDS' on one or more European CCP's. “If industry is unable to deliver, we have to consider other ways to incentivise the use of CCP clearing for credit default swaps”, he warned.
*** whats the wallet size Mr Creevy? (either for the operator or for commission to develop). What’s the latest on the LCH bid? Break up LCH into commoditised and new biz…and then we start to get interests aligned.
Sorry, this is one from the archives, but I enjoyed the refresher….on those DvP models…
Study has identified three broad structural approaches to achieving DVP (or more generally, to creating a strong linkage between delivery and payment in a securities settlement system):
Model 1: systems that settle transfer instructions for both securities and funds on a trade-by-trade (gross) basis, with final (unconditional) transfer of securities from the seller to the buyer (delivery) occurring at the same time as final transfer of funds from the buyer to the seller (payment);
Model 2: systems that settle securities transfer instructions on a gross basis with final transfer of securities from the seller to the buyer (delivery) occurring throughout the processing cycle, but settle funds transfer instructions on a net basis, with final transfer of funds from the buyer to the seller (payment) occurring at the end of the processing cycle;
Model 3: systems that settle transfer instructions for both securities and funds on a net basis, with final transfers of both securities and funds occurring at the end of the processing cycle.
http://www.bis.org/publ/cpss06.pdf?noframes=1
Infrastructure
AS ELX PREPARES FOR LAUNCH, TT CHIEF REBUKES TALK OF 'BAD BLOOD' WITH BGC PARTNERS Chicago screen dealing vendor Trading Technologies has hit back at media reports that 'bad blood' between TT chief Harris Brumfield and BGC Partners CEO Howard Lutnick could mar the debut of new futures exchange ELX.
Full story: http://www.finextra.com/fullstory.asp?id=20216*** see comment above….and http://www.chi-x.com/GC_Certified_Vendors.html
On Wednesday, a NYSE Liffe official said that it has put its CDS clearing solution under review, as the service originally launched in December has yet to process a single trade.
NYSE Reduces Order Execution Time to Five Milliseconds, From 105 MillisecondsReplaces SuperDOT with NYSE Super Display Book to drive latency into the single digits.
NYSE Euronext this week implemented a new processing platform for the NYSE Classic market that reduced execution time from 105 milliseconds to 5 milliseconds. This technology improvement may help to stem the rapid and ongoing market share loss at the venue.
*** ummm, I don’t think so. Does this mean I can pay more faster on the primary or save more faster on the MTF?
On Tuesday NASDAQ’s start-up OTC interest rate clearing house announced that Bank of New York Mellon, one of two settlement firms
for the cash treasury market, has acquired an equity stake in the venture. The clearing house plans to offer BONY’s margin and collateral
management services to market participants.
FRANKFURT STOCK EXCHANGE TO EXTEND ELECTRONIC TRADING; RETAINS COMMITMENT TO FLOOR
http://www.finextra.com/fullpr.asp?id=28425*** didn’t read, but amazing…someone still “retains commitment to floor”….and in Germany after the Bund? I don’t geddit.
THE TRADE NEWS: New Turquoise Service to Link Six Broker Dark PoolsBy Staff6/29/09Pan-European multilateral trading facility (MTF) Turquoise has named the first six brokers that will participate in its dark liquidity aggregation scheme, to be launched in July. The six initial ‘liquidity partners’ for the as-yet-unnamed service are CA Cheuvreux, Citadel Securities, Citi, Deutsche Bank, Bank of America Merrill Lynch, and Nomura. The MTF said further partners will follow in the coming months. The scheme will grant Turquoise clients a central point of access to the dark liquidity of these six brokers.
FINANCIAL TIMES: BATS Europe Reveals Plan for Dark PoolBy Jeremy Grant 6/29/09BATS Europe, one of a new breed of share trading platforms, will today unveil plans to launch a pan-European "dark pool", becoming the latest entrant into the growing market for dealing in large blocks of shares.
WALL STREET LETTER: Exchanges, Traders Call For Sponsored Access Review By Jeanene Timberlake6/29/09Exchange and industry executives are calling for a Securities and Exchange Commission review of rules surrounding sponsored access. The issue has become increasingly contentious in the post-crisis environment as concerns over counterparty risk have come to the fore. Sponsored access involves buy-side firms trading on exchanges directly under a member brokerage's sponsorship without using the brokerage's trading system. As a result, some traders don't undergo pre-order validation processes, such as checks on a firm's capital availability, among others. Although sponsored access has been on the SEC's to-do list, exchanges and traders want a review to come sooner rather than later.
ICE announced that it had purchased a 4.8% stake, or 2.3 million shares, in the Climate Exchange, PLC. On speculation a full takeover may follow, Climate Exchange shares rose over 16% on
Tuesday. We estimate the position cost was about £15-£16 million or $23-$25 million.
It was confirmed that Deutsche Borse, LSE, NASDAQ, and NYSE each submitted offers to buy shares in the Warsaw Stock Exchange.
Chicago Climate Exchange announced Monday that it has entered into a joint venture with World Steel Dynamics to develop the World Steel Exchange. The new exchange will use CCFE’s trading platform (ICE) and will list futures for steel scrap settled based on the SteelBenchmarker family of price indices.
GFC
Bank of England Bi-annual Financial Stability ReportThe Report assessess the current state of the financial system. It discusses ways to strengthen the system, given that market sentiment has improved recently, along with the perceptions of the bank's resilience.
Asia
CITI SCOOPS $197.1 MILLION FROM SALE OF JAPANESE BROKERAGE TO NOMURA
http://www.finextra.com/fullpr.asp?id=28416Interesting 1: A clear statement of focus from Citi: Citi will maintain a strong presence in securities services and transaction services in Japan. We see significant opportunity for these businesses in Japan, which play to Citi's key strengths.
Interesting 2: Nomura certainly back in the international profile.
ASIA REPORTSlump After the Crisis Despite a period of strong growth, Asia’s electronic trading revenues are expected to stay down through 2009.
http://www.watersonline.com/public/showPage.html?page=860303
Junk / Fraud:
Bernard Madoff was sentenced by a judge in Manhattan to 150 years in prison. He had assured his clients that their money was safe with him. He did not receive a single letter of support at his sentencing hearing. See article
*** One, how could you look someone in the eye and offer such assurance, and two, with all the cash flow he had, how could none of it found its way to a single good cause or grateful recipient?
A judge in Houston decided that Sir Allen Stanford should remain in jail. The tycoon and former cricket impresario has a passport issued by Antigua, where the banking operations at the centre of the case are based.
*** I guess there is something in this too. If you are to perpetrate a fraud, don’t do it on the countries that don’t have extradition agreements (they’ll probably murder you anyway if you do)
Pass the Buck….
Meaning
Evade responsibility by passing it on to someone else.
Origin
Look up 'buck' in the dictionary and you'll find a couple of dozen assorted nouns, verbs and adjectives. The most common use of the word these days is as the slang term for the American dollar. That's not the buck meant here though. Look a little further down the list and you'll find the definition 'buck: an article used in a game of poker' - and that's the buck that was first passed.
Poker became very popular in America during the second half of the 19th century. Players were highly suspicious of cheating or any form of bias and there's considerable folklore depicting gunslingers in shoot-outs based on accusations of dirty dealing. In order to avoid unfairness the deal changed hands during sessions. The person who was next in line to deal would be given a marker. This was often a knife, and knives often had handles made of buck's horn - hence the marker becoming known as a buck. When the dealer's turn was done he 'passed the buck'.
http://www.phrases.org.uk/meanings/pass-the-buck.html
Scott RileyEMCF Business Development
European Multilateral Clearing Facility
8th Floor 50 Bridge Street Sydney Australia 2000
((Off)+61 (0)2 8916 9634 È(Mob): +61 (0)418 117 627
* scott.riley@au.fortis.com
