Thursday, December 23, 2010

News 101217: ASX-SGX, debt trading in Aust, Optimise, Direct, Iop....and happiness!

Well, blogging has been taking a bit of a back seat during a hectic end of year here.

We’ve been bombarded with materials on local market reform.

Couple hundred pages from ASIC:

Along with Competition queries about the ASX / SGX combination:

And an assessment on ASX too:$file/rep222.pdf

Most FAQs centre around will the ASX deal get the go ahead.

Of course I don’t know…but I’d have to agree with local media speculation…the deal won’t go ahead “in its current form”.

“It [the merger] still needs the support of Mr Swan, the Foreign Investment Review Board, the Reserve Bank of Australia, the Australian Securities and Investments Commission, and parliamentarians, several of whom are opposed to the sale.

Just on the political level the current coalition government is dependent on just 3 ‘independents’ who have crossed the floor.

Irrespective of the topic, this government is about opposition…you’re black, I’m white….politics…not national policy.

In terms of the FIRB approval, what I think is an extremely poor paper has been published:

One of the core principles promoted in the report is that because the Aussie government approves market operators….market operators will always act in the national interest. By the same logic, does that mean because all banks are given licenses by their national governments all banks therefore act in the national interest? Such poor logic immediately discredits the report in my view…(mind you, I’ve not finished reading it so supporting documents in the appendices may change my mind…but I very much doubt it)

The other ‘little gem’ is the defined term “target break fee” means A$ 30 million.

(see also 8.5 on page 41 of combination document)

I don’t think the ASX would make a 30 million dollar “bet” on a deal they did not have some confidence would conclude.

I assume they have done their lobbying well in advance.

“As I move around various Canberra circles I am getting a clear message – in its present form, the Singapore Stock Exchange’s takeover bid for the Australian Stock exchange is set to be rejected.

A lot of lobbing and pressure will be applied to the government between now and decision making time and the government may change its mind. But if a decision was to be made today, the Singapore-ASX merger would be rejected. The final decision may see approval subject to enormous qualification, possibly including the location of the head office. …

So, a deal may well get done, just not in it’s current form.

The end result of course, is that Australia…and Asia…needs fragmentation / competition just as much as it ever did.

On other news:

….whoops I’ve gotta go.

It’s a sunny arvo in Sydney and at 6pm I can still watch a few overs (thanks to the 3hr time difference to Perth).

I never expected Aust to be taught a lesson in cricket from England….so I guess I better go and watch and learn.

Have a great w/end all.

(No competitive ocean swims on this w/end L)



Goldman teams up with NYSE Euronext in trading venture

4 U.S. Exchange Operators Interested in Chi-X Europe

NYSE Euronext, Nasdaq OMX Group, BATS Global Markets and Direct Edge Holdings all have submitted offers for Chi-X Europe, the leading provider of cross-continental electronic trading on the other side of the Atlantic.

ASIC report 222: ASIC market assessment report on ASX group.$file/rep222.pdf

ASX Launches Trading Platform Powered by NASDAQ OMX's

The Australian Securities Exchange (ASX) has launched its next generation trading system, ASX Trade, providing the fastest integrated equities and derivatives trading platform in the world.

ASX Trade went live on Monday, 29 November 2010 and follows the upgrade of the ASX Trade 24 futures platform on 11 October 2010

latency today is 100 times faster than it was only two years ago, having been improved from 30 milliseconds in 2008 to 300 microseconds today. The improved latency has been coupled with increased capacity, rising from 20,000 orders per second before the upgrade to 100,000 orders per second now.

Chi-X Japan Passes ¥50 Billion Monthly Turnover Milestone

Chi-X Japan Limited, a wholly-owned subsidiary of alternative trading venue operator Chi-X Global, announced December 2 that turnover on its platform reached ¥50.2 billion in November

New LME-SGX Metal Futures Receives US Regulatory Go-Ahead

Singapore Exchange (SGX) is pleased to inform that eligible institutions and market participants in the United States (U.S.) can readily trade the LME-SGX metal futures for copper, aluminium..

Debt trading in Aust

He (Swan MP, Treasurer) might also see the creation of a new securities trading platform, albeit one for trading debt, as a way of compensating for the loss of local ownership of ASX and a way to encourage a new listed securities platform to eventually develop into a fully-fledged multi-securities competitor.

Press release:

Treasury paper:

BURGUNDY MAKES VERIZON DATA CENTRE COMPLAINT Burgundy has reported Verizon to Sweden's competition authority, with the Nordic multilateral trading facility claiming it has been blocked from using the US firm's network infrastructure.

Burgundy inked a deal with Verizon in September but the American firm later cancelled because it has a "one exchange" policy on data centres.

Full story:


Omega ATS to Offer Fixed Income Trading

Omega ATS, a high speed alternative trading platform for Canadian exchange-listed stocks, announced that it will now allow fixed income trading on the system. The move makes Omega ATS the first Canadian marketplace to provide open access for trading the most liquid fixed income securities

PLUS pushes towards profit

Deutsche Börse begins roll out of new IT platform

Deutsche Börse Group has set out the schedule for its new Optimise trading architecture roll-out, with the first implementation at the International Securities Exchange (ISE), a US subsidiary of Eurex, the derivatives exchange joint venture between Deutsche Börse and SIX Swiss Exchange.

ISE will begin putting Optimise in place as the base for a new options trading system during April 2011 and will continue into July as both ISE's primary and secondary markets migrate to the new platform. Initially planned for Q4 2010, ISE completely revised the Optimise implementation timetable based on input from its members. The exchange says the system will now provide greater system functionality from day one of the Optimise launch.

Based on technology giant IBM’s WebSphere MQ Low-Latency Messaging system, Optimise is designed to offer processing of trades at sub-millisecond speeds and has the capacity to process one million trades a second.

A timetable for implementation across Eurex and Deutsche Börse’s equities platform has not yet been set.


US exchange operator Direct Edge has deployed technology from Microsoft and Informatica as the basis for its trading platforms.

In contrast to the Direct Edge implementation, the London Stock Exchange is currently in the process of ditching its Microsoft-based platform in favour of a Linux system from recently acquired MillenniumIT.

More on this story:


NASDAQ OMX BUYS REAL-TIME RISK SPECIALIST FTEN Nasdaq OMX has agreed the acquisition of real-time risk management technology provider FTEN. Financial terms of the deal were not disclosed.

Full story:



CCPs upbeat about interoperability for 2011

CONFIDENTIAL CARBON TRADING DATA POSTED ONLINE A firm providing marketing services for LCH.Clearnet has mistakenly posted confidential carbon emission allowances information online, according to the Financial Times.

Full story:

MarkitSERV Provides Gateway for Central Clearing Via SGX and CME Clearing
Offers connectivity to each of the six major CCPs currently accepting OTC derivatives trades.

Credit Suisse Joins SGX to Clear OTC Financial Derivatives

Singapore Exchange (SGX) today welcomes Credit Suisse AG to its SGX AsiaClear service as SGX Bank Clearing Member for the clearing of over-the-counter (OTC) traded financial derivatives...

DTCC Unveils OTC Derivatives Matching Service; G14 Dealers Go Live
The Depositary Trust & Clearing Corp. announced the launch of a global over-the-counter equity derivatives ...


ASIC's still groping in the dark

STEPHEN BARTHOLOMEUSZ As Chi-X prepares to enter the Australian market and high-speed trading grows, regulators urgently need to put in place some form of emergency response plan if we are to avoid a US-style 'flash crash' here.

ESMA is set to become operational by 1 January 2011, replacing the Committee of European Securities Regulators (CESR)


FSA unveils strategy for dealing with HFT

Justham identified four areas of HFT that the FSA is monitoring in detail: market efficiency, in terms of price formation and the quality of liquidity; resilience, particularly in light of the US ‘flash crash’ on 6 May; whether market abuse can be effectively monitored in a high-speed environment; and the ability to retain a level playing field across market participants.

HMT Publishes Responses to Financial Regulatory Framework Consultation

HM Treasury published a summary of responses to its July consultation document, A new approach to financial regulation: judgment, focus and stability, along with all formal, written responses received. The document confirms the Government’s decisions, that the UK Listing Authority will remain within the consumer protection and markets authority (CPMA) and that the FSA’s criminal enforcement powers in relation to market conduct will be retained within the CPMA. It also sets out the Government’s preliminary conclusions on key themes raised by respondents to the consultation. The Government will present more detailed policy and legislative proposals, informed by responses to the consultation, for further consultation early in 2011. They also intend to introduce legislation in mid-2011 and a new regulatory framework is anticipated to be in place by the end of 2012.

Canada sets out position on dark pools

Entitled '23-405 Dark Liquidity in the Canadian Market', the paper is the next step in a process that began with a joint consultation paper on issues surrounding dark liquidity in 2009.

Wall Street Pay

Size, Structure and Significance for Shareowners

The Bulletin for the December Quarter 2010 has been released by the Reserve Bank of Australia today.

Banks: RBA Explains The Changes In Bank Funding

Do you think the Reserve Bank is trying, very hard, to send a message to politicians, bankers, customers and others demanding that something be "done" about these big banks? On Monday RBA Governor Glenn Stevens told the first day of the Senate banking inquiry


Australian Unity and Deakin University released the results from Australia’s most comprehensive study ever into happiness and wellbeing last week. The report spanned ten years of research, 24 surveys, with responses from more than 80,000 participants.

So what then is the key to a happy life? According to the report, the answer is to invest in your relationships and community, just as much as you invest in the markets. Plus, don’t forget to have a drink while you do it. The study found that people who drink every day have a very high rate of wellbeing, while those that don’t drink at all, came last in the category.

Pure brew sells for $1850 a bottle

"Current Perspectives on Modern Equity Markets: A Collection of Essays by Financial Industry Experts”

examines how competition, technology and recent innovations in U.S. equity markets have affected both institutional and retail investors. Fourteen industry leaders and authorities contributed chapters to the book, which was sponsored by Knight. To order copies of the book, please email

BNP Paribas to Join NZX Derivatives Market as General Clearing Participant

NZX is pleased to announce that BNP Paribas will become a General Clearing Participant for the NZX Derivatives Market General Clearing Participants provide the vital link from customer to...(more)

Deutsche Bank is rolling out core technology from Tata Consultancy Services (TCS) across its Global Transaction Banking (GTB) business.

Full story:

Scott Riley

Business Development

ABN AMRO Clearing

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