Friday, January 15, 2010

News: WE100115 TSE latency, A&I EMCF EuroCCP, T2S, Direct Access.

A blunt (but constructive) remark on TSE latency from Paul Penrose.
Another government think tank comes out with a report recommendation for competition in equities trading. (This time an Aussie one).
EMCF has published it’s paper on moving forward with interoperability. Now DTCC comes out with its version.
I’ll have to hold over comment on this till next week – busy start to the year an’ all.
BTW, many thanks Bill for the correction on the Gensler link last week.
T2S targets a different year. I still believe in T2S. DvP in Europe should be commoditised.
LCH.Clearnet waves the monopoly flag?

Looks like the other issue of the week has been direct access.
I must say, I’ve always been a fan of direct access. And I continue to be.
The “sponsoring” firms know the capabilities of the people they give direct access to. It’s their problem.
I think putting a barrier to entry in place for direct access participants is simply making a distinction / customer classification (e.g. retail / wholesale) when at the end of the day, those firms requiring direct access are probably as sophisticated (and possible more so) as any of the sponsoring firms anyway.

Accenture taking a few hits. Losing LSE and now Barclays.

I usually try and keep the blog impartial and free of plugs. However, Eric Andreetti has founded a new recruitment agency in Paris. So for those looking for assignments or have searches to fill:
As they say…it will take more entrepreneurs on main street for wall street to recover…great to see Eric doing his bit. ATB.

…and to the water (a change from the snow flurries)..
Well, the Bondi Roughwater is an aptly named swim, the water was indeed rough out the back. However the skies were clear as a bell and powder blue, the water cool, but not cold, and the visibility fantastic. Lots of little fishies and the occasional big one too. This is what ocean swimming is all about and what an introduction to 2010. I went back into the surf for another swim after the race just to enjoy the setting. Magic.
Results available here:
I’m happy w/ 441/951 in the race or 316/619 in the mens.

Off to Avalon this w/end:
As a “deep keel” kinda chap I’m told I can look forward to my belly being tickled by the seaweed. This swim also takes in a tour, over and past, the local shark net.

Health is worth more than learning.
--Thomas Jefferson,
3rd American president

Be always at war with your vices, at peace with your neighbours, and let each new year find you a better man."
--Benjamin Franklin,
politician, inventor and author

…and this was too good not to share…Aussie TeleStubbies

Have a great w/end all,



Paul Penrose

THE TRADE NEWS: Chi-X Grows Trading Volumes, Secures More Investment
By Staff
Pan-European multilateral trading facility Chi-X Europe has reported sustained trading growth on both its lit and dark platforms and has confirmed it has received additional investment from members via its 2009 equity participation scheme.

Chi-X Europe follows rivals into Ireland
*** I think the term “follows” is misleading. I recall having face to face discussions with the Irish revenue in 2008. The issues then were stamp duty. No point coming to market if the structures are not in place. Anyway, the journey to the destination is now history. Every success now moving forward.
What looks like a nice paper from Nasdaq on Irish requirements (for direct access)

Optiver-backed TOM exchange appoints CEO
Sign of drive in Europe for trading platcforms to attract retail order flow

FXall Joins CLS Bank to Mitigate Settlement Risk
FXall's Settlement Center will automatically recognize CLS-eligible trades and support CLS matching, ...

ITG Hires Duncan Higgins, Fomerly at Turquoise
Higgins joins ITG as a director within the electronic sales group in Europe.

BSE Introduces Maker Taker Charges in the Equity Derivatives Segment
On December 29, 2009 the Bombay Stock Exchange (BSE) introduces a maker / taker transaction model in its equity derivatives segment. The targeted reduction in effective spreads and impact costs, along with the innovative ... Read More Here

Pratip Kar: Taking stock of the exchanges
The introduction of rolling settlement and derivatives has made multiple stock exchanges economically irrelevant
*** An Indian perspective on consolidation of domestic exchanges (post fragmentation).

NASDAQ OMX Commodities and Nord Pool Spot Launch UK Power Market N2EX
LONDON, Jan 12, 2010 (GlobeNewswire via COMTEX News Network) -- NASDAQ OMX Commodities, a business unit of The NASDAQ OMX Group (Nasdaq:NDAQ), and Nord Pool Spot today announced the successful launch of N2EX, its marketplace for physical UK power contracts. The launch included a day-ahead auction and a prompt market.

Liquidnet has made a strategic, unspecified, investment in OTR Global, an alternative research company providing market intelligence for institutional investors.
More on this story:

Recommendation 4.5: Increased competition on exchange traded markets
On page 121 of Australia as a Financial Centre, Building on our Strengths
Report by the Australian Financial Centre Forum


EMCF seeks to end gridlock over European clearing
By Masa Serdarevic and Jeremy Grant
Efforts to break a gridlock on creating clearing choice in Europe have taken a step forward after European Multilateral Clearing Facility (EMCF), a pan-European clearing house, sought to clarify how it would co-operate with rivals in a proposed three-way link with LCH.Clearnet and X-Clear, a Swiss clearer.

EuroCCP Warns Against Margin Sharing for CCP Links

EMCF Interoperability Position Paper.

LCH.Clearnet Tells EU Of Monopoly Concerns In Stoxx Clearing
By Adam Bradbery
LONDON (Dow Jones)--LCH.Clearnet, the European clearing company, has raised concerns with the European Commission about the potential for monopolistic practices resulting from the purchase by Deutsche Boerse (DB1.XE, DBOEF) of a controlling stake in STOXX Ltd., the stock index provider, according to people familiar with the matter. LCH.Clearnet is concerned that Deutsche Boerse--the German exchange company that has a majority stake in Eurex, the trading platform, and its subsidiary Eurex Clearing--could make it difficult for LCH.Clearnet to get a license to clear derivatives trades in instruments based on EURO Stoxx indexes in order to leave its own clearing unit with a monopoly, according to the letter from LCH.Clearnet, obtained by Dow Jones Newswires.

The European Central Bank has been forced to set back the deadline for the introduction of a new pan-European securities settlement system by up to a year as negotiations over pricing and governance continued to hamper the project, according to a report in the Financial Times.
More on this story:


Remarks of Chairman Gary Gensler, “OTC Derivatives Reform”, Council on Foreign Relations
I noticed you had the wrong Gensler speech link below. That link contains a 12/3/09 speech. This link contains the 1/6/10 speech.

Observers Say Obama's Proposed Bank Fee Wouldn't Work, Won't Happen
I didn’t read this story but I wanted to read the headline Obama says proposed….

SEC BEGINS OVERHAUL OF US EQUITY MARKETS WITH BAN ON DIRECT MARKET ACCESS The US Securities and Exchange Commission has proposed new rules prohibiting broker-dealers from providing customers with unfiltered or naked access to an exchange or ATS. The watchdog has also called for comment on issues relating to high-frequency trading, co-locating trading terminals and dark pool trading as it seeks to re-write the rule-book for a new era of computer-driven trading.
Full story:

ICAP Equities launches algorithmic trading platform ICAP ALX
London 12 January 2010 ICAP Equities, the global agency broker, announced on Tuesday that it has launched its algorithmic trading platform ICAP ALX and is beginning the process of onboarding clients. The platform, developed together with execution technology and algorithmic strategies provider, Arctic Lake Systems, is operational and is scheduled to be delivered to ICAP Equities' client base in Q1 2010.

Barclays to bring IT back inhouse as Accenture outsourcing deal expires
Barclays has decided not to renew a six-year, 400 million IT outsourcing contract with Accenture when it expires in June, taking the work back in-house.

Scott Riley
Business Development

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