Tuesday, September 21, 2010

News 100917: CXG, SEF, CME, BIS OTC, LCH I/Op, CCP Governance...Bridge Run

One for the philanthropists out there:

Your mission, should you rise to the challenge is to help a pacific island exchange to:

  • To comply with international best practices in the securities industry
  • To increase the attractiveness of the exchange as an option for raising capital
  • To increase the attractiveness of the exchange as an investment option

This is a genuine mission, and you only have 2 months on assignment.

Some travel costs are allowed for and there is a per diem for living costs (think morning coffee and fruit, not nights out and booze allowance).

If you or someone you know has a suitable skill set for this, let me know.

At long last the swimming season is back on down under so I’ve been back in the water.

Ocean is still a bit chilly so a few weeks yet before the ocean swimming season starts.

As one season opens the running season draws to a close (yessss, says my lower back).

This week-end sees the Sydney Harbour Bridge run. (how could I not join in?)

9,000 runners and 1 person to beat. My son, Daniel.

He came 3rd in State in the NSW schoolboys orienteering (which made me wonder…how many 13yr olds aren’t at school?...this is Australia I guess).

Is it politically incorrect to toe tap your son if he’s near you at the finish line? Ahhh, dilemmas.


(don’t book flights, online registration is now closed).

Congratulations to Pierre Willems at BNP. A fine 2.4K swim across Annecy Lake of the French Alps. An appealing swim to me…and no sharks spotted either!


*** This site is all French to me.

Enough sport:

Interesting week for the platforms, including changes at Chi-X Global.

Swaps execution Facilities increasingly joining the fray.

I was frustrated with the CME story. If a participant placed test orders in a live system there would be fines and all sorts of carry on. Very inconsistent response in my view.

Clearing interoperability agreement is published…and why not?...it’s the participants capital at risk too!

BIS report on OTC.

Governance is critical for CCPs in my view.

And CCPs should not be looking for central banks to be lenders of last resort.

Finally a moment of thought for any Kiwis impacted by the events in Christchurch.

Gotta dash, friends (from NZ) over,

Have a great w/end all and wish me luck against the one I have to beat on Sunday.


A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."

--Winston Churchill,
British orator, author and prime minister

The difference between school and life? In school, you're taught a lesson and then given a test. In life, you're given a test that teaches you a lesson."

--Tom Bodett,
American author and humorist

Goals are dreams with deadlines."

--Diana Scharf Hunt,
American author and time-management guru

Conscience is a man's compass."

--Vincent van Gogh,
Dutch artist

South Park is not a bad moral compass.”

-- Florian Lokhorst,

Spring Associates

The best way to appreciate your job is to imagine yourself without one."

--Oscar Wilde,
Irish writer and poet

Happiness is not a brilliant climax to years of grim struggle and anxiety. It is a long succession of little decisions simply to be happy in the moment."

--Swami Kriyananda, formerly J. Donald Walters,
American spiritual leader, author and composer

Happiness is the meaning and the purpose of life, the whole aim and end of human existence."

Ancient Greek philosopher, scientist and physician

I predicted we’d lose last w/end…and we did.

My view: Deans hasn't forgotten how to be a great coach.


By Nandini Sukumar

Sept. 7 (Bloomberg) -- Chi-X Global Inc. said Tal Cohen, head of its Americas business, will become its new chief executive officer, replacing John Lowrey who moves to run its MarketPrizm unit.


FINANCIAL NEWS: Turquoise's Two-Year Struggle to Break Even
By Luke Jeffs
When it launched in September 2008, Turquoise’s shareholder group was made up exclusively of investment banks, while high-frequency trading firms were deliberately excluded.
Beattie is convinced this was an error. She said: “The Turquoise experience served to illustrate that the banks don’t own the flow, the clients do. It also served to underline the importance of high-frequency trading firms and it was definitely a mistake to exclude these firms at the outset.”
*** I fully agree.

NYSE Euronext U.S. Stock Trading Volume Down 21.8 Percent

NYSE Euronext said its cash trading in equities in the United States is down 21.8 percent from a year ago, while it global voume in derivative transactions is up 8.4 per


[LSE] 15.6 million trades across the Group's electronic order book in August
Press Release
In August, 15.6 million trades were carried out across the Group's equity electronic order books, with a combined value of L128.6 billion (E156.2 billion), down four per cent on August 2009.


LSE Teams Up With QuantHouse for External Order Routing

The London Stock Exchange Wednesday said it has expanded its relationship with QuantHouse to allow firms to route orders to more trading venues.


Press Release
KANSAS CITY, Mo. and LONDON - 7 September 2010 - BATS Global Markets, an innovative global financial markets technology company, today announced the launch of another major enhancement to its smart order routing services for BATS Exchange in the US, as well as for BATS Europe.




Q+A-What’s at stake for swap-execution facilities?
By Roberta Rampton
WASHINGTON, Sept 7 (Reuters) – The fight over who gets to be a swaps execution facility, or SEF, is shaping up to be one of the most contentious aspects for implementing the swaps portion of the new Wall Street reform law.


THE ASSET: Here Comes High-Frequency Trading
By Rodney Diola
Two years ago, recalls Zach Tuckwell, head of Asia electronic trading at Morgan Stanley, electronic trading hardly made up 10% of their client’s trading activity in Asia. Now it is about 20%, and likely to reach 30% in a year-and-a-half. “It’s been a phenomenal jump every year and I believe our client business in Asia will soon see its level of electronic trading activity approach what we have in Europe – which is around 40-45%.”


LSE Wins Dutch Approval for Transaction Reporting Facility

The London Stock Exchange has won approval from the Dutch securities regulator, the Authority for Financial Markets, (AFM) to provide transaction reporting services using its UnaVista platform for collecting data after trades are made.




JFEX Goes Live with Trayport and 3i Infotech

The Jakarta Futures Exchange today announced that it has gone live with its new integrated trading, surveillance and risk management system from Trayport® Exchange Systems and 3i Infotech....(more)

CME Group Inadvertently Placed Test Orders Monday
U.S. derivatives exchange operator CME Group Inc inadvertently placed dummy test orders into its active ...


NYSE Technologies will develop a futures platform for Tokyo's exchange
Securities Technology Monitor (16 Sep.)



Regulators need to give the green light to interoperability if post-trade costs in Europe are to fall, says Wayne Eagle, director of equities at central counterparty LCH.Clearnet.


Swiss Exchange May Enter Derivatives Clearing as Demand Rises, Zeeb Says
SIX Group, the operator of the Swiss stock exchange, is considering clearing derivatives trades as regulators urge banks to make more use of the service, according to Thomas Zeeb, chief executive officer of SIX Securities Group.


SIX x-clear and LCH.Clearnet publish complete clearing agreement

London, 6 September 2010

SIX x-clear Ltd and LCH.Clearnet Limited (LCH.Clearnet), have today published the complete documentation which covers the existing interoperability arrangement between the clearing houses. This arrangement currently serves the London Stock Exchange (LSE) and SIX Swiss Exchange.


LSE's Rolet quits board of LCH.Clearnet
By Jeremy Grant
Xavier Rolet, chief executive of the London Stock Exchange, has stepped down from the board of LCH.Clearnet in the latest sign that the exchange is distancing itself from its long-standing clearing house and is closer to building its own clearing business.


Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Market Activity in April 2010 - Preliminary global results – Turnover

Coordinated by the BIS, participating institutions collect data from some 1,300 reporting dealers on turnover in foreign exchange instruments and OTC interest rate derivatives. The triennial survey has been conducted every three years since April 1989, and has been modified since April 1995 to include OTC interest rate derivatives.

Activity in OTC interest rate derivatives grew by 24%, with average daily turnover of $2.1 trillion in April 2010. Almost all of the increase relative to the last survey was due to the growth of forward rate agreements (FRAs), which increased by 132% to reach $601 billion.


Australian OTC Market size:


*** Australia’s turnover in FRAs is 6.7 billion….about 1%...enough to put us on the map.

NZX clearing house system gets the green light
Timaru Herald
The Stock Exchange has the green light from regulators to start operating its new clearing house system on September 6.

TOCOM to Acquire TGE Shares of JCCH Stock

Tokyo Commodity Exchange ("TOCOM") announced September 9 that the Exchange will acquire the shares of the Japan Commodity Clearing House ("JCCH") held by Tokyo Grain Exchange ("TGE") ....(more)

As a result of this transfer, TOCOM will own 63.3 percent of JCCH stock, making the clearing house a subsidiary of TOCOM.


T2S COSTS CREEP UP, BUT BUSINESS CASE REMAINS 'ROBUST' SAYS ECB The European Central Bank has released preliminary figures outlining the fees that will be charged to market participants for using the forthcoming cross-border Target 2 Securities settlement system.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21784

CME considers a broader push into European and Asian clearing
CME Group is considering making a big move into clearing of financial transactions in Europe and Asia because the company expects trading-activity growth in those regions to outpace that of the US, said Bob Ray, CME's managing director of international products and services. The firm is also considering expanding a planned clearinghouse venture in the UK. "Europe and Asia are critical for us, and our growth here has been excellent," Ray said. The Wall Street Journal/Dow Jones Newswires (10 Sep.)

European regulators focus on governance at clearinghouses
An official at the UK Financial Services Authority said European regulators have increased scrutiny of corporate governance at clearinghouses for equity and over-the-counter derivative trades. The move comes as momentum continues to build for increased use of such clearinghouses. "For us, the issues are around corporate governance, conflicts of interest and access," said David Lawton, head of market infrastructure and policy at the FSA. Bloomberg (10 Sep.)

EU changes plans for clearinghouses' access to liquidity
The European Commission's original plans were for clearinghouses to have access to emergency cash from central banks, but concerns about that setup have prompted changes. According to final proposals for the EU regulations, central counterparties must have access to adequate liquidity from either a central bank or a "credit-worthy and reliable commercial bank" or a combination of the two. The Wall Street Journal (17 Sep.)


'Flash Crash' Prompts a Rethinking of the Rules
The Flash Crash quickly spurred the realization that disparate regulation across the interdependent securities ...


Comprehensive round up on “flash crash”



Trading venue outages

Markets infrastructure providers software resiliency survey


Basel III agreement announced

Global regulators agree to tripling of top-quality capital requirements. 9:29 AM read more


The FSA’s markets regulatory agenda


*** Only 51 pages.

EU's internal-market deputy director will step down in September
David Wright, deputy director general for internal markets at the European Commission, decided to become a fellow at St Anthony's College at the University of Oxford. He will step down in September. Wright, who has led a number of financial reforms, agreed to stay on longer than planned to help Michel Barnier, commissioner for internal markets, handle a busy period for financial regulation. Financial News Online (U.K.) (subscription required) (09 Aug.)

FTEN Wins Patent for System to Manage Marketwide Risks

The U.S. Patent & Trademark Office is expected to award a patent Tuesday to a financial technology firm for a cloud computing system that allows securities firms and, potentially, regulators to manage market-wide risks up to the millisecond, without adding any delay to transactions as they are executed.




07/09/2010 11:51:00


As back office clearing and settlement issues rise up the regulatory agenda, the European Central Securities Depository Association (Ecsda) has moved to appoint its first secretary general and open a permanent office in Brussels, adjacent to the European Commission.

More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21766


ABN AMRO Clearing Relocates Global Head of Market Access to HK

ABN AMRO Clearing announced September 1 that they will be relocating senior global management to Asia Pacific. From the 1st September Chris Lee, Global Head of Market Access and...(more)

BUFFETT BETS ON FINTECH FUTURE WITH $220 MILLION FISERV STAKE Warren Buffett's Berkshire Hathaway has placed a $220 million bet on the prospects of a rosy future for banking technology firms by snapping up 4.4 million share in US financial processing firm Fiserv.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21713

07/09/2010 18:04:00


Capital markets firms around the world are set to spend $13.4 billion this year, across asset classes, on trading infrastructures, according to a report from Tabb Group.

More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21769

He concludes: "Unfortunately, there is no perfect architecture, but by understanding the relationships between latency, bandwidth, scalability and cost, the latest and greatest networking technology can underpin an infrastructure that delivers the highest possible ROI. That technology exists today; but since money never sleeps, neither can the men and women designing the networks of tomorrow."

*** Ongoing IT investment is just part of business as usual. The trick is how to optimise it.

RBS SHIFTS TRADERS TO ONE FLOOR AS E-TRADING TAKES HOLD RBS Global Banking and Markets Group is consolidating its trading desks onto one floor as it prepares for an upsurge in electronic equities trading in Europe over the next three years.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21782

UBS TAKES STAKE IN HFT TECH OUTFIT MANTARA Mantara, a high-frequency trading technology provider, says it has received an unspecified strategic equity investment from UBS.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21797

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

* scott.riley@au.abnamroclearing.com

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