Friday, August 13, 2010

News 100730: Chi-X Japan, SMART, Leaks, stress.

Sorry all for the delay in posting to web site.

I’d love to give credit to Mr Brookes and his excellent cartoon at but they don’t appear to allow links.

(It just pips the post versus ‘I just dropped a Santander’)

Congratulations to Chi-X Japan….(and no doubt another nail in the coffin of the lunch time trading halt in Japan).

Javlin to spear Eris?

Personally, I think NASDAQ made a smart move diversifying with SMARTS….that said…financial terms were not disclosed.

No margin for sovereigns? No.

On stress tests transparency will prevail.

The Bay Run this week-end.

The event is a 7 km fun run (or walk) around the beautiful Iron Cove, making it a great warm up race for other fun runs like the City to Surf (next week).

Run GPS:

After calling last week game wrong…I hope to be proven wrong again this week.

I fear the ABs will win in Melbourne.

I was inspired by the respect for common sense. We see far too little of this these days in my view.

Photographer snaps All Blacks game plan

When it was suggested some more strict rules should be put in place, Hansen replied: "I think common sense is the key. You can write as many rules as you like but at the end of the day if you don't use common sense, rules don't matter."

Some excellent feedback on Contador….but the whole episode still leaves me with that ‘santander’ feeling.

Have an excellent w’end all.

Monday is a holiday here in NSW…but not the rest of Australia. (go figure?)




FINANCIAL NEWS: Emerging Markets Drive Trading Growth
By Luke Jeffs and Tim Cave
Chi-X Global is focusing on developed markets, however, and this week goes live in Japan, where it plans to offer an alternative to the Tokyo Stock Exchange.
John Lowrey, chief executive of Chi-X Global, said: “We are confident Chi-X Japan will be successful for two key reasons. The Tokyo Stock Exchange moved to its new and highly successful Arrowhead trading platform in January. This sets an important precedent for a fast, modern marketplace that will appeal to the sophisticated trading strategies of hedge funds and algorithmic trading firms. “Second, for the first time, the regulator has granted approval for Chi-X Global and other proprietary trading systems – to clear not through the TSE, but through the Japan Securities Clearing Corporation. This is further evidence of Chi-X’s ethos to open up all markets to competition, and this also includes clearing.”
Lowrey said Chi-X Global’s regulatory clearance as a recognised trading platform– or proprietary trading system – was a key development of the Japanese equity market.
He said: “The Japanese regulator and the TSE have been very open to Chi-X Global entering the Japanese market. The emergence of competition is an important milestone in the necessary maturation of the Japanese equity market.”



Tokyo Stock Exchange aims to become more competitive
The Wall Street Journal (27 Jul.)

The TSE will discuss either eliminating or shortening its 90-minute lunch break.

***…ummm, I’d start with eliminate.

Dealers plan to launch an e-trading platform for derivatives
A group of dealers is preparing to launch Javelin, an electronic trading platform for over-the-counter derivatives. The swap-execution facility will gives derivatives users another option for trading privately negotiated derivatives. Javelin, which has been in the works for months, has not formally launched, but it already cleared its first swap. The Wall Street Journal/Dow Jones Newswires (7/19)

Eris will clear interest-rate swaps by first converting them to futures contracts.

Javelin, which is also initially focusing on interest-rate swaps, will instead clear swaps as they are.

26/07/2010 17:25:00


A group of green 'hacktivists' have taken out the European Climate Exchange's Web site in a protest against carbon trading.

More on this story:

26/07/2010 14:10:00


Nyse Euronext is set to launch a pan-European Multilateral Trading Facility (MTF) for corporate bonds.

More on this story:

Seeking alternatives

Alternative trading systems may not have achieved significant market share in Asia's equity markets, but their ability to provide institutional investors with precious additional sources of liquidity will make them a permanent part of the landscape, according to Robert Dykes, CEO of trading technology and financial services provider Tora.

*** Tora has attempted to address this problem with Crosspoint.


Source: EU extends its review of Dutch aid for ABN Amro and Fortis
The European Commission extended its temporary approval of Dutch government assistance to ABN Amro and Fortis Bank Nederland while it continues to review the matter, a commission source said. The commission is trying to determine whether recapitalisation packages for the banks violate EU rules on state aid to financial institutions. Reuters (29 Jul.)

*** Interesting. Personally, I think Dutch tax payers will inevitably ‘get their money back’. To me the question is when, not if.

Goldman Enters Derivatives Clearing Business

The investment and trading services firm, known more for its marketing of derivative securities such as collateralized debt obligations, said it launched Derivatives Clearing Services, to provide worldwide clearing in trades of interest-rate, credit, foreign exchange, equity and commodity derivatives.

Nasdaq OMX Profit Beats Street, IDCG Now On Line

The company's growth partly hinges on its ability to clear interest rate swaps, capitalizing on the global regulatory push to run complicated derivatives through clearinghouses such as Nasdaq OMX's nascent, majority-owned IDCG.;jsessionid=PD2X4NLPZCUHBQE1GHPSKHWATMY32JVN?articleID=226300017&_requestid=319400

NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) has signed an agreement to acquire SMARTS Group,

Financial terms of the transaction were not disclosed.


LCH.Clearnet considers an easier membership category for sovereigns
Clearinghouse LCH.Clearnet might implement a membership category for sovereign users of derivatives, including central banks, that want to work with central counterparties. The creation would give sovereigns CCP access without requirements imposed on regular members, including the posting of initial margin. magazine (7/28)

*** No.

*** Yes. "They understand they may have a moral obligation to participate in clearing because it might seem perverse if they, as governments, impose clearing on the market then refuse to join in as a substantial user of interest rate swaps.”


Seven Europe banks fail stress test

Investors concerned that tests were too soft. 5:49 AM read more

*** The thing for me is not so much about the test results…rather the transparency of information. Giving people enough information so they can make their own informed decisions I think is better than relying on a ratings agency (or regulators) broad brush ‘judgement call’.

Deutsche Bank will offer an update on its sovereign-debt exposure
Deutsche Bank agreed to disclose details about its holdings of sovereign debt after European regulators criticised the bank for withholding the information. Shares of the German bank dropped in early Monday trading, and market commentators cited the nondisclosure as the reason. The Wall Street Journal/Dow Jones Newswires (26 Jul.) , Financial Times (tiered subscription model) (26 Jul.)

*** …and if you’re not transparent…then the market can judge you / make their own assumptions


The introduction of a European consolidated tape for EU market data is a "necessity" says the Committee of European Securities Regulators (CESR) in a report to the European Commission which calls for wide-ranging reforms to the structure of trading under a revised MiFID rulebook.

Full story:

CESR calls for tighter broker crossing rules, mandated post-trade tape

UK's Cable aims to link bankers' bonuses to lending
UK Business Secretary Vince Cable is set to propose tying bankers' bonuses to lending. Cable is expected to warn the financial-services industry that bonus payouts might be curbed if banks don't bolster lending to businesses. He will also offer plans to reintroduce regional stock markets. Telegraph (London) (25 Jul.)

IT skills shortage but older workers spurned
Source: Paul Smith, MIS Australia

*** The Australian “technology crunch”. i.e. we have no local resources…they’re all being hired into Asia…yet we still face ageism at home.

RESEARCHER SHOWS OFF ATM 'JACKPOT' HACKS A security researcher has demonstrated two hacks on ATMs, forcing the machines to spew out cash, at the Black Hat conference in Las Vegas.

Full story:

Central Bank Withdraws Coins as Irish Raid Piggy Banks

DUBLIN, July 25 - It's official: Irish people literally raided their piggy banks as they were hit by some of the toughest austerity measures and the longest recession in Europe.;jsessionid=KHQXUOENUU10HQE1GHPCKH4ATMY32JVN?articleID=226200220&_requestid=38138

Are Coral Islands Really Doomed?
The Maldives have become a symbol of the dangers of global warming, amid fears the low-lying nation could disappear as a result of rising sea levels. But one team of scientists believes the truth is more complicated. The Maldives coral islands, they postulate, may be growing with the rising waters.

To their surprise, they found that most of the atolls they were studying had either grown or remained unchanged in the last few decades, even though the sea level has already risen by 12 centimeters (about 5 inches).

*** I like this because it a) does not deny global warming and b) highlights natures complexities.

Clutch at straws

Meaning: Try any route to get out of a desperate situation, no matter how unlikely it is to succeed.

…A straw was chosen as the height of futility as a means of rescue. Being, as it was, a flimsy and virtually valueless waste product, it was often used as a synonym for the most unimportant and trifling of objects. 'Don't give/care a straw' was an indication of indifference, a 'man of straw' was an insubstantial adversary, and to 'condemn someone to straw' was to declare them ready for the madhouse.

*** The sad thing is, I’ve drafted up many ‘straw man documents’….I guess those that review them would agree on at least sending the author to the madhouse.

I said: “Contodor should not have attacked Schleck

You said:

If you read Leaonard Zinn’s take on it, the problem was caused by the design of the rear gear changer that Schleck’s team use.

They chose to use it – their problem.

If someone punctures, wait.

If someone is forced to crash, wait.

If someone punctures because they chose to ride 100-gram tyres today, that’s their problem.

If someone crashes because they took a big risk, that’s their problem.

If someone has a mechanical fault because their hardware is [poor] or because their mechanic is [poor], that’s their problem.

Contador didn’t know the precise details of Schleck’s problem. But he DID know that his rear mech had jammed up – bad hardware.

"I've just dropped a Santander"

*** Priceless shot of Webber.

Perfectionism is not a quest for the best. It is a pursuit of the worst in ourselves, the part that tells us that nothing we do will ever be good enough -- that we should try again."

--Julia Cameron,
American teacher, writer and author

Scott Riley

Business Development

ABN AMRO Clearing

8th Floor | 50 Bridge Street | Sydney | Australia | 2000

((Off)+61 (0)2 8916 9634 È(Mob): +61 (0)418 117 627


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