G’day All,
SEC SETS SIGHTS ON SPONSORED ACCESS AND EXCHANGE CO-LOCATION…
“I liken it to giving your car keys to a friend who doesn't have a license and letting him drive unaccompanied," says SEC chairman Mary Schapiro
OK, lets run with this analogy. Sure, sometimes I throw the car keys to a mate that might be visiting. But I have different levels of mates. Some, I say bring the car back when it suits, and I turn my back and I don’t give it a 2nd thought (they’re equally aware of the risks as me). Others, I might say “Sure, I’ll hop in with you for the ride”. When people risk their assets (or balance sheet / capital) they know what they’re doing. They have protections and recourse in place. If they don’t, they won’t be an enduring part of the financial landscape. We take risks every day, and so we should. It’s just understanding the magnitude of those risks that differentiates the teenagers from the adults.
Or as another person said:
He who is not courageous enough to take risks will accomplish nothing in life."
--Muhammad Ali, American boxer and three-time world heavyweight champion
A lot about Nasdaq this week.
I’m surprised they “suspend” their US equities ambitions. I’m sure this is only the headline and the real reasons must run deep. I hope they keep this under review. Somewhere, I believe there is a niche for them to explore.
Right to exit the Securities white label servicing business, a much better fit for Waterhouse.
X-Stream gets placed in Dubai.
Chi-X takes 2nd spot in Europe’s “exchanges” (read trading venue) on Thursday.
(home page has updated, but worth a look)
www.chi-x.com
A shame about delays to access and interoperability.
I believe contagion and default fund contributions were always a meaningful issue.
http://www.eachorg.eu/each/
http://www.eachorg.eu/digitalAssets/49/49401_AccessInteroperabilityGuideline.pdf
84. Risk Management:
CCPs will recognise the specific status of each other as CCPs and not as risk-taking
intermediaries.
• The CCPs involved have to arrange an adequate collateralisation scheme to cover
the exposure of potential losses.
• No CCP is obliged to contribute to the other CCP’s participants’ default fund or
other post default backing schemes.
• A default of a Clearing Member at one CCP should not affect the other CCP unless
the first CCP itself is in default.
This weekend sees us celebrating Halloween…in fancy dress.
I’ll be going as Patrick Star(fish) – (for those not familiar with Patrick, just watch Spongebob square pants – Patrick makes a goldfish’s short term memory look impressive – my kids recommended Mr Crabs, tight and cranky, but I couldn’t source the claws).
…and for those doing the Noosa eyeline events this week-end best of luck,
….meanwhile I’ll be clearing up after our Halloween party.
Great w/end all,
S
http://clearingandsettlement.blogspot.com/
Platforms
Exchange group Nasdaq OMX is betting on its INET trading technology and its BX secondary equities trading platform to help it recover lost US equities market share, says Brian Hyndman, the group’s senior vice president of transaction services.
Read the interview
….an extract…
Last week the exchange announced it would revive the dormant equity licence from its 2007 acquisition of the Philadelphia Stock Exchange to create a third US equity platform. The new exchange will match orders according to price/size priority rather than the price/time systems used on the Nasdaq Stock Market and BX.
http://www.thetradenews.com/node/3765
Bats surges past Turquoise on UK fee cuts Bats Europe, the alternative trading system operated by US-based Bats Global Markets, has almost doubled its share of UK equity trades in just two months and has overtaken rival Turquoise for the first time, thanks to an aggressive price promotion that critics warned would have only a temporary impact on volumes.
CLS BANK TO ESTABLISH FX TRADE DATA REPOSITORY Foreign exchange settlement outfit CLS Bank is to establish a trade data repository for the global FX market, in a move designed to head off regulatory pressure for more transparency in the over-the-counter currency markets.
Full story: http://www.finextra.com/fullstory.asp?id=20671
Clearing
THE TRADE NEWS: Japan’s Alternative Platforms to Get CCP ClearingBy Staff10/26/09The Japan Securities Clearing Corporation (JSCC), the central counterparty for Japan’s stock exchanges, will be able to clear trades from the country’s alternative trading platforms, known as proprietary trading systems (PTSs), from July next year.
http://www.thetradenews.com/asset-classes/equities/3794
TRAYPORT AND PERCIVAL TEAM ON CLEARING AND SETTLEMENT
http://www.finextra.com/fullpr.asp?id=30508
Nasdaq ‘suspends’ plans to launch US equities clearing Nasdaq OMX has said it was "suspending" its plans to launch US equities clearing, with Bethany Sherman, a spokeswoman for the transatlantic exchange group, claiming the "threat of competition had forced the Depository Trust & Clearing Corporation, the market leader, to cut costs. (Financial Times)
TD WATERHOUSE COMPLETES ACQUISITION OF OMX SECURITIES
http://www.finextra.com/fullpr.asp?id=30608
DUBAI FINANCIAL MARKET LAUNCHES X-STREAM TRADING PLATFORM
http://www.finextra.com/fullpr.asp?id=30583
Policy
High- Frequency Trading: New Study Finds Divide on ImpactInstitutional investors are of mixed mind about whether the activities of high-frequency trading firms help or hurt their own trading operations, according to research conducted by Greenwich Associates.
http://www.securitiesindustry.com/news/-24116-1.html?ET=securitiesindustry:e1729:171544a:&st=email
27/10/2009 15:52:00
SEC SETS SIGHTS ON SPONSORED ACCESS AND EXCHANGE CO-LOCATION
After taking on dark pools and flash orders, the Securities and Exchange Commission has now turned its attention to high frequency trading and the practice of sponsored access to exchanges.
More on this story: http://www.finextra.com/fullstory.asp?id=20660
*** lets run with the car analogy
SEC looks into effects of high-frequency tradingThe Securities and Exchange Commission is looking into how high-frequency trading, which some estimate accounts for 50% or more of all equity trading in the U.S., affects markets, sources said. As lawmakers are scrutinizing the trading practice and other market developments, the SEC is not expected to publish a discussion paper on the strategies until December at the earliest. A congressional committee will discuss high-frequency trading, dark pools and other developments on Wednesday. Reuters (10/26)
Congress, White House will address "too big to fail"Legislation likely will be introduced in Congress this week that would make it easier for large financial institutions to be taken over by the government and wound down in an orderly fashion during a crisis. The bill, to be introduced by Rep. Barney Frank, D-Mass., after consultation with the Treasury Department, would likely make it more costly to be a large financial company whose failure would threaten the entire system. SIMFA President and CEO Timothy Ryan supports the effort, but warns that legislation could remove key provisions of the Bankruptcy Code given financial institutions. The New York Times (free registration) (10/25)
Chicago mayor, CME heads discuss future of futures industryThe Obama administration's plan to increase oversight of the derivatives markets is expected to have a substantial effect on Chicago's futures industry. CME Group Chairman Terry Duffy, Vice Chairman Charlie Carey and Chicago Mayor Richard M. Daley met recently to discuss how the changes would affect the futures industry. Daley's concerns center on how the changes would affect employment, while the CME leaders are urging Congress to quickly pass legislation that would require more over-the-counter derivatives to be traded on exchanges. Financial Times (tiered subscription model) (10/26)
*** CME leaders are urging Congress to quickly pass legislation that would require more over-the-counter derivatives to be traded on exchanges. – this just exposes their entire desire as self serving. Some of their arguments have merit, if only they were unbiased.
Regional
THE TRADE NEWS: Buy- and Sell-Side Welcome ASEAN Link, According to TABBBy Staff10/26/09Buy- and sell-side firms agree that efforts to harmonise equity trading in the Association of South East Asian Nations (ASEAN) will encourage more investment and faster technological evolution in the region, according to the latest study from research firm TABB Group.Five ASEAN countries – Indonesia, Malaysia, Philippines, Thailand and Singapore – agreed to create an electronic linkage between their exchanges in February 2009 for the trading of equities. A sixth nation, Vietnam, joined the initiative in September.
European success spurs Nomura's Asian ambition Nomura is launching a Japanese dark pool to compete for a larger share of the increasingly important Asian market, having already established itself as one of the top trading firms in Europe since acquiring parts of Lehman Brothers’ business a year ago.
*** A report from research house Tabb Group last month estimated the market share of Japanese alternative trading systems at 1.6% but predicted this number will increase to 3.5% by the end of 2011.
The Treasury provides advice on policies that promote competitive, efficient markets that work to enhance consumer wellbeing, a secure financial system and sound corporate practices, and foreign investment consistent with Australia’s national interest.
http://www.treasury.gov.au/contentitem.asp?NavId=036&ContentID=1649
SMARTS GROUP LAUNCHES MARKET SURVEILLANCE PLATFORM IN US
http://www.finextra.com/fullpr.asp?id=30575
Scott Riley
Business Development
[Please note my new email address: scott.riley@au.fortisclearing.com]
Fortis Global Clearing
8th Floor 50 Bridge Street Sydney Australia 2000
((Off)+61 (0)2 8916 9634 È(Mob): +61 (0)418 117 627
* scott.riley@au.fortisclearing.com
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