Monday, November 22, 2010

News 101119: ASX SGX 850B, National Interest, TSE Remote, NYSE CCP, S&P, 'phone folly.

G’day All,

There has been a lot going on in Aust so I’ve put together some previous notes.

People have been asking me about ASX / SGX deal. Personally, I think there are huge political and then national interest barriers.

Still, whether a deal is done or not I don’t think changes much…it just reinforces the drivers that are in play for competition and fragmentation in Aust.

On ownership and the 15% restriction surfers might like (Corps Act Section 850B):

If a deal is done, I see it more as a combination of incumbents (think Euronext in 2000).

The driver for change was not combinations, rather competition (ECN’s, MTF’s etc.)

In terms of ‘national interest’ people seldom recall when Australia privatised Telstra we could have paid off the national debt. It was the ASX at that time that said keeping a debt issuance program was in the national interest (especially after they had just bought the SFE, think what would happen to their interest rate contract without a deliverable bond).

"Some market participants argue for maintaining the Commonwealth Government Securities (CGS) market. Given the fiscal strategy, this would require the Government to accumulate a substantial portfolio of financial assets. The Government therefore must assess whether it is necessary to maintain the CGS market and whether doing so will give benefits that are likely to outweigh the risks associated with accumulating substantial assets.
This discussion paper first outlines the arguments that are advanced to support maintaining the CGS market and attempts to specify the key assumptions underlying the arguments to allow them to be tested. Second, the paper considers the options available to the Government."

Australia “Debt Free Day” 20th Apr 2006.

Also some past thoughts on the importance of Aust as a regional financial services hub.

In an ASG / SGX play, both users of the Nasdaq platform I wonder if Tom Kloet, now at TMX is watching (TMX is now on Sola).

Other news:

TSE getting to grips with remote access. Something we now take for granted in Europe.

NYSE adds clarity to their clearing plans. I just don’t see how this is in the best interests of the users.

Eurex clearing fees just a shuffling of the deck.

S&P should be attacked over Cusip fees.

…and please, how silly is taping mobile ‘phones? Sure, you’ll catch the dumbest of the breed…but how cheap and easy is it to have a work around. This is regulation without thought for implementation. Disappointing.

Have a great w/end all…mine starts with a cocktail party!



Monthly MiFID Monitor

IRESS Launches Low-Latency Trading Eco-system in Australia

Australian financial market participants will have an ultra fast, low maintenance, highly connected trading ecosystem to connect them with execution venues in Australia, thanks to the following...(more)

ASX / SGX – Merger Implementation Agreement.

The full 92 pages….

The key issues of interest to the ACCC are:


The potential competitive impact of the proposed merger on the development of competition between exchanges and associated products or services; and


Whether the proposed merger is likely to impact on the proposed entry of Chi-X Australia, Chi-East or other potential suppliers of listing, trading, clearing and settlement, data services or any other associated services for trading Australian equities or related products.

ITG Launches POSIT Marketplace for Australia

Investment Technology Group (ITG), a leading agency broker and financial technology firm, launched POSIT Marketplace for Australian equity trading October 27. The first of its kind in Australia...(more)

Chi-East launches pan-Asian trading - without Australia

Chi-East, the sell-side dark pool jointly operated by trading venue provider Chi-X Global and the Singapore Exchange (SGX), started trading today, but without Australian stocks after the Australian Securities Exchange (ASX) – SGX’s putative merger partner – pulled its market data feed.


Nasdaq OMX Nordic is launching a dark pool for regulated cash equity markets in Stockholm, Copenhagen, Helsinki and Iceland.

Full story:

MTS to Launch E-Trading in Euro Corporate Bonds

MTS, the electronic fixed-income trading platform, says it plans to launch a pan-European corporate bond platform for the wholesale broker-dealer market.

MTS PLANS PAN-EUROPEAN CORPORATE BOND PLATFORM MTS, the electronic fixed income trading market majority owned by London Stock Exchange, says it plans to launch a pan-European corporate bond platform for the wholesale market.

Full story:

Brazilian Exchange Cuts Fees to Attract High-Frequency Traders

Brazilian exchange BM&F Bovespa is hoping to attract high-frequency traders through hefty price breaks.

The fees will range from 0.019 percent for firms trading R20 million ($11.6 million) in average daily trading volume up to 0.01 percent for firms trading over R500million ($291 million) daily.

Pan-Asian Dark Pool Launched

Chi-East opens unlit trading of Asian securities, with full post-trade reporting of price and volume information.

"We believe it will stimulate liquidity in the region and provide additional execution opportunities for participants,'' said Zach Tuckwell, head of Electronic Execution and Program Distribution in Asia at Morgan Stanley,


Tokyo Stock Exchange welcomes Hong Kong broker-dealers

The Tokyo Stock Exchange (TSE) has introduced a new remote membership scheme designed to allow Hong Kong-based broker-dealers to trade directly into Japan for the first time.



NYSE Euronext’s clearing plans take a step forward

Exchange group NYSE Euronext’s plans to overhaul its clearing services have moved ahead with the appointment of a new team to lead the implementation of its new strategy and consult with market participants.


TSE and JSCC Select Calypso for CDS Clearing Service

Calypso Technology Inc., a global application software provider of an integrated trading, risk and processing platform to financial institutions and corporate treasuries, announced October...(more)


At launch, nine banks were admitted as SGX Bank Clearing Members for the clearing of OTC traded financial derivatives products. The nine banks are: Barclays Bank PLC, Citibank N.A., DBS Bank Limited, Deutsche Bank AG, The Hongkong and Shanghai Banking Corporation Limited (HSBC), Oversea Chinese Banking Corporation Limited, The Royal Bank of Scotland plc (RBS), Standard Chartered Bank and United Overseas Bank Limited.

Singapore Exchange is first in Asia to clear interest-rate swaps
The Singapore Exchange has started clearing Singapore and US dollar interest-rate swaps, expanding the bourse's reach into the over-the-counter derivatives market. SGX President Muthukrishan Ramaswani called the development a "significant milestone" for Singapore's financial-services industry. Securities Technology Monitor (15 Nov.)

Chris Lee ABN Amro: An iPhone, a Global Clearer and a Data Centre

Rather than renting trading permits to traders on the floor of the exchange...... today we rent rack space in data centres. Firms no longer pay premiums to position their trading booths as close to the...(more)

Eurex Clearing slashes clearing costs of cash equities

Eurex Clearing, the clearing operation of the Deutsche Börse Group, is to introduce a 50% reduction in its fixed clearing fee and expand the discount models for Xetra cash market transactions from 1 December 2010.


Recent changes to Australia’s supervisory powers

A speech by Belinda Gibson, Deputy Chairman Australian Securities and Investment Commission$file/Recent-changes-to-Australias-supervisory-powers.pdf

Market structure developments in the clearing industry: implications for financial stability

Issues Raised by Dark Liquidity

IOSCO Consultation Report

The European Commission has confirmed that new legislation to update MiFID, initially promised by Q1 2011, will now not be issued until Q2.


FIX Protocol Limited (FPL) has submitted a proposal to securities regulators urging an "industry led solution" for the establishment of an authority overseeing the delivery and governance of a European consolidated tape.

More on this story:


Three influential US trade bodies have called on the Securities and Exchange Commission to crack down on the fees charged for securities identifiers by Standard & Poor's.

Full story:

FSA TO TAP TRADER MOBILE CALLS DESPITE BANK PROTESTS OVER COSTS The UK's Financial Services Authority is set to make investment banks record and store traders' mobile phone calls despite industry opposition to the move which could cost more than £10,000 a handset a year.

Full story:

Australia as a Financial Services Hub

The Government welcomes the Australian Financial Centre Forum's report on Australia as a Financial Centre (the Johnson Report)

Australia as a Financial Centre: Building on our Strengths

Report by the Australian Financial Centre Forum, November 2009

See page 121, recommendation 4.5

An older paper on the theme of Australia as a financial services hub

On 25 October, 2010 the ASX announced that the ASX Limited and Singapore Exchange had entered into a merger implementation agreement to “combine to enable customers globally to capitalise on listing, trading, clearing and settlement opportunities created through the expanded platforms, leveraging on the importance of Asia Pacific as the driver of global growth”.

The Stockbrokers Association has adopted a cautious approach to the proposal. The Association is open minded about the prospect of regional consolidation of exchanges in Asia Pacific and the inclusion of ASX in that process.

The Association concedes it is important for Australia to be part of Asia. Much work has been done by the Australian Financial Centre Forum (AFCF) to identify strategies to foster Australia as a regional financial centre.


GETCO becomes Trading Member of Singapore Exchange

Singapore Exchange (SGX) announced today that GETCO Asia has become a Trading Member of its securities market. "We are pleased that GETCO has joined our securities market. GETCO's...(more)

The US mortgage crisis infographic

from Chris Skinners blog:

Original content:

Open mindedness is often confused with weakness of character.

PK Shaw

employees join companies and leave managers."

--Leila Bulling-Towne, executive coach

Scott Riley

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