News 100630: So farewell Fortis :( , updated email address, ASX responds, BOATees, Data management, Movies & client money

As a new day dawns in Asia, the end of an era comes to pass.

So, Please note that with effect of the legal merger of Fortis Bank Nederland N.V. and ABN AMRO Bank N.V. this email address will change to: scott.riley@au.abnamroclearing.com

The legal merger is intended to become effective on 1 July 2010, subject to the fulfilment of the applicable conditions precedent, including but not limited to the timely receipt of relevant legal and regulatory approvals.

(right now I’ve not heard anything to the contrary, so I think we can take it as read).

Please update your email address for me!....(and likewise, if I’m using an out of date alias for you, please let me know).

30^th June is also the end of the Aussie financial year.

28^th June saw the ASX commence its internal fragmentation of their order book (positioning to compete with CXA).

(amongst other changes including the Nippa upgrade…and Genium…and market data enhancements etc. etc….who says you don’t need the threat of competition to deliver change?)

1^st July is farewell to Nasdaq OMX Europe (NEURO)…the first step in the predicted European MTF rationalisation?...or does it just mean we’ll see more niche players.

Looks like BOAT continues to attract trade reports. My only reservation is the business model. I feel this data is best offered for free (or at least notional cost).

SECs data ambitions are worrying. Yes, if you can’t measure it, you can’t manage it…but then if you can’t use it / don’t use it why collect it?

Really disappointed that the movie exchange looks like being strangled by the lobbyists before it even begins.

And good old client money pops up again. One local resident had a rant with the default of Sonray. Touch of de ja vu with that one. I’m sure for all of us.

Siemens to set up a bank…sign of the ‘credit crunch’ times. (see also economist debt chart / sovereign risk)

Interesting piece on toxic liquidity from Bright Trading.

And then to sport…

As one English fan pointed out…. “England win the ODI, at Rugby we beat Australia, Murray in the second week of Wimbledon, Hamilton leads the Formula One World Championship (Button second) and er Germany...er....well lets move on”

Actually, delighted to see Lewis Hamilton top of the F1 leader board. I warmed much more to him than Button or any other driver. I guess I should be going for Webber…but I can’t get beyond the gut feeling that the only Aussies that drive cars fast are either thieves or police (not pursuit, just doing their own drag race thing).

Motorbikes. That is all together different. Bikes are a sport of skill and of course Aussies should be vying for world champ status ala Gardner, Doohan and now Casey Stoner.

And this world cup thing…looks like the Dutch have a hard road…but all the while they’re in, I’m with ‘em.

So, please update the email address and have a good week!

Many thanks,

Scott.

http://clearingandsettlement.blogspot.com/

Platforms

NASDAQ OMX Europe (NEURO) has announced that it will cease trading operations as per the close of business of 1 July 2010.

http://www.nasdaqomxeurope.com/

ASX VolumeMatch to go live on 28 June 2010

The Australian Securities Exchange's (ASX) new large order execution service, VolumeMatch, will be available from next Monday, 28 June 2010. Twenty-three ASX Participants have satisfied the certification and... (more)

AUSTRALIAN SECURITIES EXCHANGE READIES ASX NET

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34560

*** Nippa is dead. Nippa 2megabits / sec, ASX Net 100 megabits / sec

Brokers fight it out as trading soars | The Australian

25 Jun 2010 ... TURNOVER on the Australian securities exchange has lifted more than 20 per cent in the past financial year.
www.theaustralian.com.au/.../brokers-fight-it-out-as-trading-soars/story-e6frg8zx-1225884940897

*** TURNOVER on the Australian securities exchange has lifted more than 20 per cent in the past financial year.

http://www.theaustralian.com.au/business/markets/brokers-fight-it-out-as-trading-soars/story-e6frg916-1225884940897

GETCO MAKES EUROPEAN DARK POOL MOVE

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34524

Asian fragmentation to pursue own course | The Trade News

25 Jun 2010 ... Yang Xia, UBS Fragmentation of liquidity in Asia's equities markets will take a different path to the US and Europe, as domestic exchanges ...
http://www.thetradenews.com/node/4743

Exchanges impede Asia's high-frequency trading, insider says
Alan Donohue, CEO of Singapore's Nyenburgh, said exchanges in Asia are hindering the growth of high-frequency trading by not providing technologies needed by major Western funds. "Most Asian exchanges have severe order-throughput limitations in comparison to their Western counterparts," Donohue said. "On top of these physical constraints, there are the regulatory constraints that require you to have a 'responsible person' or 'designated trader' for each session." AsianInvestor.net (30 Jun.)

INSTINET BLOCKMATCH SELECTS MARKIT BOAT TO REPORT TRADES

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34574

Markit BOAT is the largest trade reporting venue in Europe with 74% market share of MiFID OTC trade reporting. This represents 22% of combined on-and-off exchange turnover in Europe(Source: Thomson Reuters).

Instinet BlockMatch joins the following brokers and MTFs reporting their cash equity trades on Markit BOAT:

Alliance Bernstein	ITG
Bank of America Merrill Lynch	ITG POSIT
Barclays	JPMorgan
Block Cross	Knight
Block Match	Liquidnet
BNP Paribas	Link Asset & Securities
Calyon	Marshall Wace
CA Cheuvreux	Morgan Stanley
Citadel	Neonet
Citigroup	Nomura
Conduit Capital Markets	NXEU
Credit Suisse	Olivetree Securities
Deutsche Bank	Pipeline Financial Group Limited
Evolution Securities	Royal Bank of Scotland N.V.
Goldman Sachs	State Street
HSBC	Sucden Financial
ICAP	Troika
ING	UBS
Instinet

Clearing

LCH.CLEARNET TO LAUNCH FCM ACCESS TO SWAPCLEAR

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34448

SLIB MAKES ASIA MOVE

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34547

PENSON COMPLETES ACQUISITION OF BROADRIDGE CLEARING CONTRACTS

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34541

Broadridge announced the execution of an 11-year global outsourcing services contract to provide securities processing and back-office support services to PFSI.

*** Broadridge pulling out of clearing services (in conflict with its users) makes perfect sense to me.

New Pecking Order in Derivatives?
Exchanges and clearinghouses are expected to win big from the new derivatives rules in the financial ...

Here's an excerpt from the FT:
"The pecking order in the derivatives world will not change much to begin with, as a similar group of big banks dominate the ranking of FCMs, as they do the OTC markets. According to CFTC information, the top five FCMs, based on capital, are divisions of Goldman Sachs, UBS, Credit Suisse, JP Morgan and Citigroup In terms of customer assets under management, Newedge ranks first, followed by Goldman, JP Morgan Futures, Deutsche and UBS, according to CFTC data.

*** Usual suspects: Goldman Sachs, UBS, Credit Suisse, JP Morgan,Citigroup, Deutsche

Policy

SEC's Audit Trail "A Waste of $4 Billion"

The Securities and Exchange Commission is seeking comment on its May 26 proposal to create a real-time trail of all trade and trader information. The comment it got Wednesday at the Securities Industry and Financial Markets Association's 2010 Financial Services Technology Expo: "It's a waste of $4 billion."

*** Fully agree. No problem sending data…if you’re going to use it. Much of this is data for the sake of it. If your seeking comment on why you need data….ummm, you don’t need it. It’s like my kids seeking comment on a Crispy Cream in the food court….ummm, no ya don’t need it.

IOSCO-UPDATE 1-Brazil market fragmentation coming 'in principle'

MONTREAL, June 8 (Reuters) - Brazil's main stock exchange will "in principle" eventually face competition from other trading venues, the country's top securities regulator said, adding a final decision has been delayed by the financial crisis, a European market review and the mysterious U.S. flash crash.

http://www.reuters.com/article/idUSN086539320100608

29/06/2010 17:15:00

CANTOR DROP MOVIE EXCHANGE IN FACE OF LOOMING GOVERNMENT BAN

Despite receiving regulatory approval, Cantor Fitzgerald appears set to abandon plans to launch an exchange for trading movie box office receipt contracts after lawmakers moved to ban the practice.

More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21550

*** This is a dreadful result. It evidences lobbyists (i.e. cash) can do as much harm as good. A worrying weakness / flaw in our political system(s).

Gillard unveils new cabinet

Prime Minister leaves Rudd out of reshuffle; says former PM would be welcome in re-elected Labor cabinet. 1:26 PM read more

http://www.businessspectator.com.au/bs.nsf/Article/Gillard-reveals-new-cabinet-pd20100628-6U5SP?OpenDocument&src=hp1&src=pmm

*** No change for Bowen, Minister for Corp Law.

One reader had a rant about this: (a local broker going belly up, on a bad FX position, and the relevant client taking all the other clients assets down with him).

Derivatives broker Sonray folds freezing 3000 client accounts ...

24 Jun 2010 ... Sonray, founded in 2003 by securities and derivatives specialist Russell ... Hodgson has yet to ascertain the cause of the firm's failure, ...
www.news.com.au/business/...sonray.../story-e6frfm30-1225883531701

And

http://www.smh.com.au/business/collapse-strands-3000-20100623-yz7t.html

And a good local blog post:

Bronte Capital: Sonray Capital – another Australian broker failure

Sonray Capital failed a couple of days ago and the clients are likely to incur nasty ... It is a failure – as if another one was needed – of Australian ...
brontecapital.blogspot.com/.../sonray-capital-another-australian.html - Cached

For those in the UK a touch of ‘been there done that’...

Global Trader’s insolvency

Global Trader Europe Limited (Global Trader), a broker authorised by the FSA that dealt in spread-betting and contracts for difference (CFDs) as principal, went into administration on 15 February 2008 with funds in two types of accounts: (i) segregated, and (ii) non-segregated. The total of both types of accounts was insufficient to meet its liabilities.

http://www.speechlys.com/file.axd?pointerid=307b062460f546428f6d683d6df62b7a&versionid=68df7647f8d14f5d98edf836366fd24c

…and before that we had Sussex Futures…

Day One Trader: A Liffe Story: Amazon.co.uk: John Sussex, Joe ...

This review is from: Day One Trader: A Liffe Story (Hardcover). Couldn't put the book down until finished. John Sussex and Joe Morgan have written a book ...
www.amazon.co.uk › ... › Investments & Securities › Futures - Cached - Similar

*** Sussex futures folded as a result of a day trader ‘blowing his limits’ (gilts in 30 seconds).

SIEMENS TO SET UP OWN BANK AS CREDIT CRISIS RUMBLES ON Giant German industrial conglomerate Siemens has applied for a banking licence in an effort to reduce its dependence on troubled eurozone banks for financing.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21549

The move would enable the group to deposit a portion of its EUR9 billion cash pile at the Bundesbank as a safe haven.

*** and at the other end of the spectrum to Sonray….Siemens. (No wonder they have 9byn to deposit, because they care…speaks volumes about other Co’s too indebted to care).

JP Morgan's Richard Berliand To Retire - Financial News
By Shanny Basar in New York FINANCIAL NEWS
The banker at the heart of JP Morgan's successful integration of Bear Stearns' prime brokerage business, which helped transform the Wall Street giant into one of the top banks serving hedge funds, is planning to retire after 20 years with the firm. Richard Berliand, global head of prime services at JP Morgan, will leave the bank at the end of 2010 to spend more time with his family and pursue personal interests, according to an internal memo from Carlos Hernandez, global head of equities, seen by Financial News.

*** Ahh, and he was a nice guy too.

TABB FORUM: Recipe For a Toxic Market - Part I
By Dennis Dick, Bright Trading
6/28/10

Bright Trading, LLC, has addressed a letter to the SEC, in response to its June 2, 2010 Roundtable.¹ What follows is Part 1 of an article summarizing the views contained in that letter.

As more and more participants internalize uninformed² order flow, there is less uninformed order flow reaching the displayed market. This, in effect, makes the displayed market more “toxic” to displayed market makers, as the marketable order flow is executed before it reaches the displayed market, leaving only informed order flow to trade against. This discourages market making participants from displaying liquidity.

Speaking as part of the SEC panel on HFT, Terrence Hendershott said that “a limit order is a free option for somebody to trade against.”³ Displayed bids act like a short-term put option to the market, giving participants the right to sell to it. Alternatively, displayed offers act like a short-term call option, giving participants the right to buy from it. There is a risk involved in displaying these bids and offers. If the return does not justify the risks, market making participants won't display these bids and offers.

Of even greater concern is that participants in these internalization pools do not have to display any liquidity, yet they reap the rewards of getting the execution. This reward comes at the expense of the displayed liquidity provider’s risk. As displayed liquidity providers receive fewer executions, they will seek out other trading venues. The most logical venues to seek out are the ones getting the executions against this uninformed flow, which in many cases are these internalization pools. In essence, these internalization practices are driving our displayed liquidity providers into the undisplayed trading centers, leaving us with less and less displayed liquidity.

Proponents of these internalization practices argue that spreads have never been narrower, and liquidity has never been deeper. This may be true of the very liquid, most highly-traded NMS stocks, but it is not true of the majority of thinly traded, more illiquid issues: these spreads are not narrowing, but are, in fact, widening due to these predatory internalization practices.

If internalization practices are allowed to continue, and internalizers simply have to match the NBBO, eventually the majority of market makers, and participants acting as market makers, will move their trading businesses to these undisplayed pools, as they seek out the uninformed flow.

The fundamental flaw with this movement is that the prices internalizers give to the uninformed flow are derived from the publicly displayed market. The current market structure encourages competition in the undisplayed trading centers, while deriving their prices from the displayed trading centers. Competition should be fostered in the displayed trading centers, as they are the source of public price discovery. If displayed market participants continue to be pushed into the undisplayed trading centers, displayed spreads will widen, and the executions that internalizing firms give to this uninformed flow will become more subjective as a result of the widening displayed spreads.

We believe it's important to provide incentive for the public display of liquidity by regulating these internalization practices and requiring an internalizing firm to provide meaningful price improvement over the displayed NBBO.

1 Bright Trading's letter, in its entirety, appears here: http://www.sec.gov/comments/4-602/4602-29.pdf

2 When discussing informed order flow, reference is not to market participants with inside information, but to market participants’ orders that are on the right side of the market in the short-term. Alternatively, when discussing uninformed order flow, reference is to market participants’ orders that are on the wrong side of the market in the short-term

3 Time 1:13:00 http://www.sec.gov/news/otherwebcasts/2010/060210marketstructure-2.shtml

An interactive chart of debt across the world

http://news.economist.com/cgi-bin1/DM/y/eCJMO0bscdF0Mo0GgTB0E1

Please note that with effect of the legal merger of Fortis Bank Nederland N.V. and ABN AMRO Bank N.V. this email address will change to: scott.riley@au.abnamroclearing.com

The legal merger is intended to become effective on 1 July 2010, subject to the fulfilment of the applicable conditions precedent, including but not limited to the timely receipt of relevant legal and regulatory approvals.

Scott Riley

Business Development

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

News 100625: Aussie PM, ASIC on supervision, competition consultation, fees. Japan. FSA and funny money.

What is going on? England win at the Rugby….well Giteau gave it away ( a la Scotland style).

Then Ireland win the first Cricket ODI for England. Well, just gunna have to put it right this week-end against the men in green.

Chi-Tech…making global local.
SGX. Bit more context.
BNY Mellon ups the ante both in the dark and with clearing positioning.
Japan consolidation framework.
Movie futures rightly get there moment of fame.

Farewell FSA. Personally I thought there was a role for both the FSA and the BoE. I’ll be sorry to see the end of the FSA. I’d have rather seen more effort in identifying and addressing the ‘shortfalls’ of the regulatory framework. My daughter thinks chucking all the mess in one big cupboard makes the problem go away. I remain to be convinced.

Lots of changes trickling through in Australia right now. Phase one sees plenty of issues on the transition of supervision from ASX to ASIC. Phase two will see just as much activity on the issue of ‘fragmentation’ a scary word that just means the introduction of market forces (i.e. competition). And with all this going on how could I fail to mention our first female Prime Minister came to office yesterday, 24th June. (I guess we’ll have elections on 9th of Oct 2010).

Only 190 Billion outstanding on TARP. Woo hoo. Surely no one would notice just one little million for me?

Oh, Kerviel. He’s vile….and an idiot.

Who would have thought Marmalade comes from the house of the Orange Nassau?

And that money? It is funny.

The picture for the blog spot: http://www.economist.com/node/16379907?story_id=16379907

I’m looking forward to a lovely re-union with some of the Bafana bafana boys on Sat, whilst I get to gloat about our win over the Irish. Sunday I’ll be warhammering and smugly watching us turn around the ODI’s. If there is even a sniff of us choking…I’ll be out the door to puppy training.

Have a great w/end all.

S
http://clearingandsettlement.blogspot.com/


Trading

CHI-TECH EXPORTS MARKETPRIZM TO NORTH AMERICA
http://www.finextra.com/news/announcement.aspx?pressreleaseid=34496

Chi-X to Connect North America to European Venues Chi-Tech said Thursday that its network for connecting to trading venues across Europe will now be available to securities firms based in North America.
*** this headline much catchier.

SGX INKS IT INFRASTRUCTURE OUTSOURCING DEAL WITH HCL The Singapore Exchange (SGX) has signed a five year, S$110 million IT infrastructure outsourcing contract with India's HCL Technologies.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21491 Since becoming

CEO of the Singapore Exchange (SGX) in December 2009, Magnus Böcker has accelerated the exchange's moves into high-frequency trading and commodities while continuing to pursue the firm's long-held strategy as the investor's gateway to Asia.
http://www.thetradenews.com/node/4685
***Böcker also played a major role in the combination of OMX with Nasdaq, the US-based exchanges group, following which he became president of Nasdaq OMX and took responsibility for business areas including corporate services, market technology, software development and global IT services.
See also: http://www.sgx.com/wps/portal/corporate/cp-en/about_sgx/management_team SGX

INVEST $250M IN 'WORLD'S FASTEST' TRADING ENGINE The Singapore Exchange (SGX) has outlined plans to spend $250 million and tap technology from Nasdaq OMX to build what it claims will be the world's fastest trading engine.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21459

BARCLAYS CAPITAL TO LAUNCH DARK POOL FOR EUROPEAN EQUITIES
Barclays Capital plans to launch a pan-European dark pool for equities trading in the third quarter, building on the US platform it inherited from its acquisition of Lehman Brothers in 2008.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21490

BNY MELLON LAUNCHES DARK POOL FOR DEBT BNY Mellon has launched an auction marketplace where fixed income securities buyers and sellers can transact anonymously in real time.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21487

NYSE Euronext Outsources Billing to Firm58
http://advancedtrading.com/infrastructure/showArticle.jhtml;jsessionid=0MVYQEIZG1HFNQE1GHPCKHWATMY32JVN?articleID=225700160&_requestid=389649

NYSE Euronext Opens Latency Kimono with Free Web Portal Sell-Side Technology - Latency http://www.waterstechnology.com/sell-side-technology/news/1686464/nyse-euronext-opens-latency-kimono-free-web-portal
*** I like this.

LUIS LAGINHA DE SOUSA APPOINTED CHAIRMAN AND CEO OF NYSE EURONEXT LISBON http://www.finextra.com/news/announcement.aspx?pressreleaseid=34254

SIX SWISS EXCHANGE INCREASES CAPACITY
http://www.finextra.com/news/announcement.aspx?pressreleaseid=34253

FINANCIAL TIMES: Japan Outlines Plans to Merge Exchanges By Lindsay Whipp and Mure Dickie 6/18/10 The Japanese government has unveiled a proposal to merge the country’s major exchanges by 2013 in a bid to make the bourses more competitive regionally and attract more funds. The idea is contained in the government’s new growth strategy, approved by the cabinet on Friday, that the ruling Democratic party hopes will rescue Japan from chronic deflation and double the country’s long-term real growth rate to 2 per cent by 2020. The proposal could eventually see the merger of the Tokyo Stock Exchange, the Osaka Securities Exchange, the Tokyo Financial Exchange and the Tokyo Commodities Exchange.
http://www.ft.com/cms/s/0/2441feac-7a7f-11df-9cd7-00144feabdc0.html

US clears movie futures trading Opponents, led by big Hollywood studios, warn that complex trading brought down the housing market and this idea could do the same to the movie industry
http://news.smh.com.au/breaking-news-business/us-clears-movie-futures-trading-20100616-ydr0.html
*** What a load of CMO. The fault is not with the product, it is with how it is represented / sold. Cars don’t kill people. Drivers do.

Clearing

Nasdaq OMX Stockholm starts clearing crown interest-rate swaps Nasdaq OMX is conducting a pilot project with SEB bank and the Swedish Debt Office to route Swedish crown interest-rate swaps through a central clearinghouse. "It is the first centrally cleared interest-rate swap ever in krona," said Erik Thedeen, president of Nasdaq OMX Stockholm. "The next step is to handle full-scale clearing, and we need to have a dialogue with the main banks to achieve that." Reuters (22 Jun.) , The Wall Street Journal/Dow Jones Newswires (22 Jun.)
*** He he, and a CCP catering to 2 participants…is a bilaterally cleared market. Yeah, yeah, it’s a process not an event.

Malaysia, Hong Kong plan common bond-settlement platform The central banks of Hong Kong and Malaysia started working on plans for launching a common platform for settling securities. The move comes after the governments of the Association of Southeast Asian Nations plus China, Japan and South Korea called off plans for creating a common bond-settlement platform in 2003. Indonesia and Thailand are participating in the discussions as observers. Risk.net/Asia Risk (11 Jun.)
*** T2S hits Asia?…maybe not.

BROADRIDGE LAUNCHES CONNECTIVITY SERVICE TO SWIFT ACCORD http://www.finextra.com/news/announcement.aspx?pressreleaseid=34488


Policy

Quick View: Ill-timed FSA reforms setback for markets FT.com / Markets By Jeremy Grant The abolition of the Financial Services Authority could not come at a worse time for anyone in the UK’s market structures industry.
http://www.ft.com/cms/s/0/a7aa328e-7a0a-11df-9871-00144feabdc0.html

Sants hopes the legacy of the UK's FSA will survive The UK Financial Services Authority, which effectively will cease to exist in 2012, hopes its legacy will survive for its replacements. FSA CEO Hector Sants said he hopes the "tough" legacy of the regulator will be taken over by the Bank of England and the other replacement agencies. The Prudential Regulation Authority -- to be part of the Bank of England -- will set the size of firms' capital and liquidity buffers, the Financial Stability Committee will have tools to head off threats such as asset-price bubbles, and the Consumer Protection and Markets Authority will ensure financial firms treat customers fairly. The Wall Street Journal (24 Jun.)
*** Who remembers SIB, TSA, IMRO, AFBD and was there one for Life insurance etc?

Market supervision moves to ASIC – what does it mean for brokers?
Speeches by ASIC Deputy Chairman, Belinda Gibson and Head of Market and Participant Supervision Division Greg Yanco, at the 2010 Annual Stockbrokers' Conference, 9 June 2010 Read Belinda Gibson's speech Read Greg Yanco's speech
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/Market%20supervision%20moves%20to%20ASIC%20-%20what%20does%20it%20mean%20for%20brokers%3F?opendocument

ASIC’s power grab.
*** the ASX and SFE having to pay ASIC initial fees of $3.7 million, Financial services Minister Chris Bowen wants the lion's share of that - $3.145 million - from ASX, justifying it on the basis that ASX will no longer have the costs of carrying out the supervision themselves.
*** the last annual report showed ASIC spending $295 million and collecting $558.5 million in fees and sales for the Treasurer.
http://www.smh.com.au/business/asics-power-grab-20100623-ywdz.html Reforms to the

Supervision of Australia's Financial Markets - Exposure Draft of Fees Regulations and Consultation Paper
The four categories are:
– small financial markets; (10 byn annual turnover, eg. he National Stock Exchange, Bendigo Stock Exchange, Asia Pacific Exchange, and IMB Ltd) at $9,375 / Qtr
– wholesale financial markets; (Bloomberg, Mercari, BGC, and Yieldbroker are initially exempt, hence there will be no wholesale financial markets supervised by ASIC) at $9,375 / Qtr
– the Sydney Futures Exchange; at $555,000 per annum; and
– the Australian Securities Exchange at $3,145,000 per annum.
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1836

competition for market services.
PJC report that includes a list of issues that ASIC intend to consult on
http://www.aph.gov.au/senate/committee/corporations_ctte/asic/asic_june10/index.htm
*** read from page 21 (22 issues)

One of the unintended – albeit anticipated – consequences of MiFID has been the impact of its pre- and post-trade transparency regimes on the price formation process. http://www.thetradenews.com/operations-technology/pre-post-trade-reporting/4689

Off-exchange trading has overtaken displayed market trading in Europe over the last two months, reigniting the debate on the effectiveness and reliability of the price formation process. But many market participants remain sceptical about the quality of the underlying data, emphasising the need for reform of MiFID's trade reporting rules
http://www.thetradenews.com/operations-technology/pre-post-trade-reporting/4701
*** approved publication arrangements (APAs)

WEEKEND ECONOMIST: Europe's dark clouds BILL EVANS The mood in Europe is one of great uncertainty, but three issues stand out: Spanish banks, Italian sovereign debt, and government austerity packages. 12:01 AM
read more http://www.businessspectator.com.au/bs.nsf/Article/WEEKEND-ECONOMIST-Europes-dark-clouds-pd20100618-6J9XJ?OpenDocument&src=wes

Amount repaid by TARP recipients surpasses outstanding balance Banks and other recipients of funds through the Troubled Asset Relief Program have repaid $194 billion, while $190 billion remains outstanding. "TARP repayments have continued to exceed expectations, substantially reducing the projected cost of this program to taxpayers," said Herbert Allison, assistant secretary for financial stability at the Treasury Department. "This milestone is further evidence that TARP is achieving its intended objectives: stabilizing our financial system and laying the groundwork for economic recovery." Los Angeles Times (6/12) , The Wall Street Journal (6/11)

GLOBAL SECURITIES REGULATORS ADOPT NEW PRINCIPLES AND INCREASE FOCUS ON SYSTEMIC RISK
http://www.finextra.com/news/announcement.aspx?pressreleaseid=34249
Full list of 38 objectives:
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD323.pdf

Participants

Nomura Goes Live with NX in Hong Kong
Nomura, the global investment bank, has announced that NX (NomuraCross), its non-displayed global crossing network, has gone live in Hong Kong. Nomura received approval for an Automated Trading Services... (more)

BNY MELLON LAUNCHES CLEARING UNIT BNY Mellon is creating a new company to clear futures and derivatives trades on behalf of its institutional clients.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21526

Citigroup will sell $3.2 billion in US auto loans to Santander Banco
Santander's Santander Consumer USA plans to buy about $3.2 billion in vehicle loans from Citigroup's CitiFinancial Auto, marking a major move into the US consumer-credit market for the Spanish bank. The companies said Santander also will take over servicing for $7.2 billion in loans that will stay on Citigroup's books. Santander, Spain's biggest bank, wants to expand its presence in the US and China. Bloomberg (24 Jun.)
*** this scares me. Spain on the cusp on a liquidity crisis. Citi dumping assets to allow it to emerge from a liquidity crisis. I guess the ratings agencies will accurately reflect this…just like they did with the GFC.
See also “The pain is Spain”: http://www.economist.com/blogs/buttonwood/2010/06/indebtedness_after_financial_crisis

Debate continues to rage across both sides of the Atlantic about the impact of high-frequency trading on the dynamics of the equity market, but for Jeff Wecker, CEO of US-based Lime Brokerage, institutional investors must accept that latency matters for them too now.
*** In that case, you’ll want to cancel fast enough so that the guy who is bidding with you at the higher bid is not the same guy that’s selling you the stock at the old price just as it becomes the offer. If you can get off that bid and onto the next one fast enough, you’ll get a better execution. But right now, because he’s invested more than you in the infrastructure underlying the algorithm, the high-frequency trader is the guy that’s selling to you just as your bid becomes the offer.”
http://www.thetradenews.com/node/4656

Kerviel Says Hid Risky Bets to "Save Appearances"
Rogue trader Jerome Kerviel kept his unauthorised risky bets at Societe Generale hidden to "save ...
*** Kerviel is an idiot.
*** Kerviel is an absolute idiot. That said, I have some empathy for Daniel Bouton (former boss of Societe Generale). “banking, it’s all about money, and fraud is inherent in money.” http://www.businessspectator.com.au/bs.nsf/Article/Why-banks-attract-fraud-pd20100623-6P82M?OpenDocument&src=pmm
**** I guess where there is a will there is a way. Fraudsters rely on peoples inherent good nature of trust. Certainly risk controls will be better…but risk is just a stress ball…you can’t eliminate risk, although you can shift it. Unfortunately we can usually only challenge the lies of fraudsters when we have the confidence to apply our own common sense…and this is not always a career advancing move.
*** I hate to think of the trust and friendship Kerviel abused in all his dealings with Operations staff. He’s a disappointment to himself and doubly so to those that trusted him. My word is my bond…but unfortunately…I don’t expect you to believe it.

Important stuff
South African gamblers smoke endangered vulture brains for luck As the World Cup launches in South Africa this week, conservationists fear that gamblers looking for a little extra luck will turn to a source those of us in the West might not expect
*** I didn’t need to smoke any vulture brains to know the Socceroos were a long shot against Germany. Personally, I hate the buzzing noise of the “Vu-vu-zela”. Sounds no more interesting than a swarm of bees. But this guy, Henson, does it justice. http://www.metro.co.uk/sport/oddballs/831274-vuvuzela-song-makes-light-of-world-cup-instrument-with-umbrella-mock-up?ito=1537

Women behind the rise of the house of Orange-Nassau
WHEN the house of Orange-Nassau finally became monarchs in The Netherlands in 1815, it was the result of hundreds of years of manoeuvring: battles physical and political and, Susan Broomhall contends, a solid effort by generations of the family's women. And one story they are hoping to verify concerns a novel habit of William's German-based granddaughters, Louise Henriette and Henriette Catharina: distributing marmalade as ceremonial gifts to visitors to their husband's courts. "They put in kitchens with everything Dutch, including the Delft tiles, and we understand they made the marmalade there," Broomhall says. "The oranges symbolised the house of Orange and the sugar they used represented the conquests of the New World." http://www.theaustralian.com.au/higher-education/women-behind-the-rise-of-the-house-of-orange-nassau/story-e6frgcjx-1225871264764
*** so now I know where Marmalade comes from.

The Long Now.
http://fora.tv/2010/02/01/Long-Term_Thinking_in_the_Next_10000_Years
*** More on the long now…which I’m drawn to.

101 Funny Quotes About Money
http://www.karlonia.com/2008/07/24/101-funny-quotes-about-money/
We didn’t actually overspend our budget. The allocation simply fell short of our expenditure. — Keith Davis
Money isn’t everything but it sure keeps you in touch with your children. — J. Paul Getty
My formula for success is rise early, work late and strike oil. — J.P. Getty
I wish that dear Karl could have spent more time acquiring capital instead of merely writing about it. — Jenny Marx
Women prefer men who have something tender about them - especially legal tender. — Kay Ingram
It is only by not paying ones bills that one can hope to live in the memory of the commercial classes. — Oscar Wilde

Sport.
Gutted we lost the Rugby. Shame we didn’t bring the same intensity to the Sydney test. A disappointment for fans and coach Deans.
Cricket. Who’s this Eoin Morgan playing for England?

Scott Riley Business Development 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