What is the point of school? “The only time my education was interrupted was while I was at school”
Sir Winston Churchill
“Education is what is left after you have forgotten everything that you were taught at school”
Albert Einstein
http://www.stpauls.qld.edu.au/09_web/srcfiles/gazette-june-10.pdf
(An introductory comment from the Headmaster in the newsletter of my old school…I suspect in Churchill’s terms St Pauls probably consider they did little to interrupt me during our shared time)
“If we teach today as we taught yesterday, we rob our students of tomorrow”
John Dewey
http://www.stpauls.qld.edu.au/09_web/srcfiles/gazette-dec09-web.pdf
Enough about education….what about clearing fees?
Yes, LCH has slashed clearing fees…to 10p…from 10p…somewhere between 10p and zero.
The full rate table and link is below, draw your own conclusions.
As ever I’m disappointed with the media reporting of this. I haven’t seen one comment that actually goes into any analysis on transparency or relativity.
I assume the fees only apply to Ltd business. (we know I’m correct in this).
I’ve also done an EMCF comparison. Very simple back of the envelope stuff just to ensure I understand it. (see below)
At the end of the day the message I take from this is loud and clear: competition is the critical catalyst for change.
Has anyone kept a history of the LCH rate card from 2006 to present? That would make for interesting reading or a nice graph at the very least.
Work the numbers for yourself…and think of the context too in light of overall industry volumes….if you divide the ‘whole of market’ size by 150K how many participants are sustained at 150K plus trades per day? What about whole of market divided by current number of participants?
More market stats out on Chi-X Europe (CXE) and they’ve appointed an advisor.
HK legislation changes…and competition carve out.
Farewell SFE…to be replaced by ASX 24.
ICAP getting into the MTF game via interest rates.
CFTC gathering data? Stop it.
Some more quotes I couldn’t resist
“The only true wisdom is in knowing you know nothing."
--Socrates, Greek philosopher
*** Not fair, I confess to knowing nothing…but I feel none the wiser for it.
Spoon feeding in the long run teaches us nothing but the shape of the spoon.
EM Foster
Pleasure in the job puts perfection in the work.
Aristotle
Attitudes are contagious. Is yours worth catching?
Unknown
And my lovely Wobblies?....
In the current form of win one, lose one….I’m going to take a leap of faith…WALLABIES to win at altitude. Yahhooo.
Every team must turn a corner.
This week sees the start of Spring here (although the weather does not appear to be aware) so of course Autumn up there.
Fear not, we’ll make good use of the sunshine down here, meanwhile, enjoy the shorter days.
Fathers Day this Sunday.
I’m full of anticipation…socks or jocks…and I get to pay for dinner!
Have a great w/end all,
S
http://clearingandsettlement.blogspot.com/
MARKETS
Monthly MiFID MTF Monitor: August 2010
http://thefinanser.co.uk/fsclub/2010/09/monthly-mifid-mtf-monitor-august-2010.html
BLOOMBERG: Chi-X Europe Said to Hire Lexicon as Takeover Adviser to Trading Platform
By: Nandini Sukumar
09/01/10
Chi-X Europe Ltd. will hire investment bank Lexicon Partners Ltd. to advise on takeover proposals after saying last week that an unidentified company made an approach to acquire it, according to two people with knowledge of the situation.
01/09/2010 15:19:00
NYSE EURONEXT ACQUIRES QUARTERLY BOARDROOM TITLE, CORPORATE BOARDROOM MEMBER
Nyse Euronext has moved into publishing with the acquisition of quarterly magazine Corporate Board Member.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21750
*** I wonder if you get a discount on your listing fees for an exclusive interview?
HK competition bill to thwart exchange rivals
http://thetradenews.com/trading-venues/exchanges/4993
The impending introduction of new cross-sector competition legislation in Hong Kong, first proposed in 2006, could fix the Hong Kong stock exchange’s trading monopoly in stone.
In brief: The role of supervising financial markets has been transferred from ASX Limited to the Australian Securities and Investments Commission and, as a result, ASX Limited has undertaken a re-branding of the operating rules and various entities associated with it.
http://www.aar.com.au/pubs/cg/cucgsep10.htm
*** Farewell SFE (Sydney Futures Exchange) which has been renamed ASX 24. I did like the name SFE, it gave a little away about the nature of the business…ASX 24 sounds more like a massage parlour.
ICAP to launch interest rate swaps MTF
http://www.automatedtrader.net/headlines/55294/icap-to-launch-interest-rate-swaps-mtf
31/08/2010 16:11:00
ICAP TO LAUNCH MTF FOR INTEREST RATE SWAPS
Inter-dealer broker Icap is to launch an electronic market for trading Euro interest rate swaps, with support from market makers Barclays Capital, Deutsche Bank and JPMorgan.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21748
31/08/2010 15:39:00
BLOOMBERG TO SHED LIGHT ON DARK POOL ORDER FLOW
Bloomberg Tradebook is seeking to address buy side wariness of dark pools and thwart high frequency gaming by showing traders where their orders are being filled in real time.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21747
CLEARING
LCH.Clearnet cuts fees further
Tue, 2010-08-31 10:59
Clearing house LCH.Clearnet plans to introduce free equity clearing for members that clear more than 150,000 trades a day on average. The new tariff is part of a restructuring of the central counterparty’s equity clearing tariff, due to be implemented on 1 October 2010, and will give members clearing more than a daily average of 50,000 trades a marginal cost of 1p per trade up to 75,000 trades, after which the marginal cost will fall to 0.5p.
*** Is competition a catalyst for change?
*** The actual fee schedule is available here:
http://www.lchclearnet.com/fees/ltd/transactions/equityclear.asp
*** One for transparency? (I don’t understand why the article is silent on the 10p rate band).
| From | 0 | 10,001 | 20,001 | 40,001 | 50,001 | 75,001 | 150,001 |
| Price | 10p | 7p | 5p | 4p | 1p | 0.5p | 0p |
Example
3,300,000 trades / 21(Days in the Month) = 157,142 (Average Daily Volume)
10,000 trades at 10p = £1,000
10,000 trades at 7p = £700
20,000 trades at 5p = £1,000
10,000 trades at 4p = £400
25,000 trades at 1p = £250
75,000 trades at 0.5p = £375
7,142 trades at 0p = £0
Total £3,725 x 21 = £78,225
EMCF fees
http://www.emcf.com/upload/uploads/Regulation%20fees%20and%20penalties%20100903.pdf
*** 3 eurocents for first 100K trades then 1 eurocent.
*** So, 157K ADV = 21 x (100K x 3cents + 57.142K x 1 cent) = 21 x (3K + 571.42) = 75K euros.
OK, I geddit.
POLICY
02/09/2010 15:16:00
FUTURES BODY TAKES ON CFTC OVER DATA GATHERING PROPOSALS
The Futures Industry Association has slammed regulatory proposals to gather more account information from market participants as "premature" and overly burdensome for the industry.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21755
*** What can you say? Agreed w/ FIA (I’ve not even read it), let common sense prevail…CFTC gathering data? Nah, it just sounds wrong.
PARTICIPANTS
MORGAN STANLEY LAUNCHES MS POOL IN AUST.
JPMorgan plans to end all proprietary trading, a source says
JPMorgan Chase is working toward ending all proprietary trading to comply with the Dodd-Frank act, a source said. The bank has informed commodity traders that their division will be closed. Most of the traders affected are in London. Citigroup sold its proprietary-commodity business, called Phibro, last year, while other companies are still considering what to do with similar businesses. Bloomberg (8/31) , CNBC (8/31) , The Wall Street Journal (9/1)
IT hiring intentions point to skills crisis
DRUNKEN MORTGAGE WORKER ACCUSED OF SHOOTING COMPANY SERVER An American mortgage firm staffer has been arrested after allegedly getting drunk and shooting the company's computer server.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21743
*** This could almost be funny…the only problem with this story….is that if you are crazy enough to shoot a server…where is the next line of demarcation for a human? In my humble view guns belong to farmers and military….and only in the police as part of a tactical response unit (i.e. not on the beat).
Scott Riley
Business Development
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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