Friday, June 25, 2010
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.
CHI-TECH EXPORTS MARKETPRIZM TO NORTH AMERICA
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.
***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
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
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.
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
*** 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.
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
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.
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
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.
competition for market services.
PJC report that includes a list of issues that ASIC intend to consult on
*** 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
*** 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
Full list of 38 objectives:
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.”
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.
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.
*** More on the long now…which I’m drawn to.
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
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?
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