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.html
Some 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=28416
Interesting 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 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
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