Friday, December 31, 2010

News 101224: CXE BATS 1st innings, LSE slips Dubai & Birley, Nasdaq silly mid on Cartels, SEF selected, BIS streaker (exposure consultation)...and ho,

G’day All,

I wanted to send some sort of holiday greeting to my friends and colleagues, but it is difficult in today's world to know exactly what to say without offending someone. So I met with my lawyer yesterday and on their advice I wish to say the following:

"Please accept with no obligation, implied or implicit, my best wishes for an environmentally conscious, socially responsible, low stress, non addictive, gender neutral celebration of the summer solstice holiday practised with the most enjoyable traditions of religious persuasion or secular practices of your choice with respect for the religious / secular persuasions and / or traditions of others, or their choice not to practice religious or secular traditions at all.

I also wish you a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2011, but not without due respect for the calendar of choice of other cultures whose contributions to society have helped make our country great (not to imply that Australia is necessarily greater than any other country) and without regard to the race, creed, colour, age, physical ability, religious faith or sexual preference of the wishee.

By accepting this greeting, you are accepting these terms:

This greeting is subject to clarification or withdrawal. It is freely transferable with no alteration to the original greeting. It implies no promise by the wisher to actually implement any of the wishes for her / him or others and is void where prohibited by law, and is revocable at the sole discretion of the wisher. The wish is warranted to perform as expected within the usual application of good tidings for a period of one year or until the issuance of a new wish at the sole discretion of the wisher.

Best Regards (without prejudice)

Name withheld (Privacy Act)."

On other matters:

CXE marks the dance card with BATS. (the best partner in my humble view).

Some noise about CCP ownership…user owner and governed (OK with some independence thrown in) is still the right model.

Birley leaves the LSE….maybe he was listening to customers?

BIS consultation on CCP exposures

…and apparently not enough about the Cricket….

I love the number 1 google site for Ashes tour dates is that familiar sports web site…

So, 1 all.

Before Brisbane I thought 3-0 to Aust. After Adelaide I thought 3-0 to England.

After Perth…yea…we actually took 20 wickets in a match…I think 2-1 to Aust…(just because of home ground advantage).

For those coming to Sydney…I look forward to welcoming you.

As for the Ocean swims….I have to wait until 2nd Jan for the Newport Beach swim:

Have a very merry X-mas all. (irrespective of legal advice),



Last Bidder Standing: BATS in Exclusive Talks to Buy Chi-X Europe

Chi-X Europe, owned by a consortium of the world’s largest investment banks, selected BATS over rival bids from Nasdaq OMX, NYSE Euronext and Direct Edge.

BATS offers $300 million for Chi-X Europe, sources say
BATS Global Markets is in exclusive takeover talks with Chi-X Europe and reportedly offered about $300 million for the second-largest alternative trading system in Europe. "BATS Global Markets and Chi-X Europe today announced the two companies have entered into exclusive negotiations regarding the potential sale of Chi-X Europe to BATS," according to a statement from the companies. "There will be no further public statements at this time." The Wall Street Journal/Dow Jones Newswires (22 Dec.) , Bloomberg (22 Dec.)

Colt Sizes Up MarketPrizm Buy

Quote MTF aims to seal liquidity deals by April 2011

Liquidnet Loses Patent Infringement Lawsuit Against ITG

A New York district court judge ruled that Investment Technology Group, a New York based financial technology firm, did not infringe a patent held by rival Liquidnet Holdings, paving the way for ITG to pursue a countersuit against Liquidnet.

Asian Explosion
Consolidation and technological advancement among stock exchanges in Southeast Asia could spark massive growth in trading volumes throughout the region.

As 2010 gives way to 2011, buy-side trading firms can look back at a year characterised by sweeping change across Asia's equities markets. New platforms have been launched, new regulations passed and new markets opened up. Technology too has taken several steps forward over the last 12 months to link together Asia's emerging trading landscape.

Dubai silent on report it is in talks to sell LSE stake
Reuters Finance News (EU) via Yahoo! UK & Ireland Finance
DUBAI (Reuters) - Abu Dhabi is in talks to buy a 20 percent stake in the London Stock Exchange held by indebted neighbour Dubai, the Sunday Times said in an unattributed report. Officials from Dubai and ...


Nasdaq Fights Bank "Cartels" in Battle for Clearinghouse Control

Capitalisation of bank exposures to central counterparties - consultative document

The Basel Committee issued today a consultative paper on the Capitalisation of bank exposures to central counterparties. These proposals relate to the capitalisation of bank exposures to a central counterparty - CCP - and, in particular, default fund exposures. Generally speaking, the Committee proposes that trade exposures to a qualifying CCP will receive a 2% risk weight.

CME Clearing gets approval from FSA

CME Clearing Europe, a wholly-owned subsidiary of CME Group, today announced that it is approved as a Recognised Clearing House (RCH) by the Financial Services Authority (FSA) of the United Kingdom. Barclays Bank PLC and J.P. Morgan will act as the first settlement banks for CME Clearing Europe and will be a central part of its payment infrastructure. J.P. Morgan will also provide custody and liquidity services.

(Reuters) - The U.S. Commodity Futures Trading Commission on Thursday unveiled its seventh set in a series of rules as it works to take oversight of the $600 trillion over-the-counter derivatives market.

US rules for OTC derivatives venues welcomed by industry

Market participants have welcomed new rules proposed by the Commodities and Futures Trading Commission (CFTC), the US derivatives regulator, for exchange trading of over-the-counter (OTC) derivatives.

Following an open meeting on 16 December, the CFTC has laid out the core principles and other requirements for swap execution facilities (SEFs), a new type of trading venue specifically designed for executing derivatives transactions currently executed bilaterally.

Ryan's letter to the editor offers clearinghouse background
Tim Ryan, president and CEO of SIFMA, explains in a letter to the editor of the New York Times, in response to the paper's article "A Secretive Banking Elite Rules Derivatives Trading," how the situation came to be. "It's important to remember that derivatives dealers who are clearinghouse members put significant capital at risk to guarantee clearinghouse obligations," Ryan writes. "If one member fails to perform, other members have to make good. With so much at stake, members must take an active role in managing a clearinghouse's risks. Moreover, risk committees do not set derivative prices or establish trading practices." The New York Times (free registration) (12/18)

Nasdaq strives to work its way into derivatives business
Nasdaq OMX has been trying to gain a bigger piece of the derivatives market by encouraging the Commodity Futures Trading Commission or Congress to restrict ownership of swaps clearinghouses by banks. Much of Nasdaq's efforts have been behind the scenes, since the company needs to keep the banks as customers if its clearinghouse is to succeed. Bloomberg (12/20)

ITG cuts cost of trading with settlement aggregation service

Agency broker and technology supplier ITG has acquired the Clearvoyance settlement aggregation software from systems vendor ESP Technologies.

Spanish CCP a step closer

Birley leaves LSE amid strategy disagreement
By Jeremy Grant in Zurich / FT Trading Room / Clearing & Settlement
Patrick Birley, hired only weeks ago by the London Stock Exchange to head up a new clearing initiative, has left the exchange amid disagreements with top management over strategy, three people familiar with the matter said on Friday.

Hong Kong SFC Announces Plans to Build Regulatory Regime for OTC Derivatives

The Hong Kong Securities and Futures Commission (SFC) welcomed the Hong Kong Monetary Authority (HKMA) and Hong Kong Exchanges and Clearing Limited (HKEx) announcement to respectively establish a trade repository (TR) and a central counterparty (CCP) for over-the-counter (OTC) derivatives transactions. The SFC pledged to build a regulatory regime for OTC derivatives markets that would cover the reporting of OTC derivatives transactions, particularly those which are relevant to the Hong Kong market, to the TR and the clearing of standardized OTC derivatives transactions through an authorized CCP. For now, the reporting and clearing requirement will be applied to interest rate swaps and non-deliverable forwards. The SFC plans to issue a consultation on the matter by the third quarter of 2011.



Full details of GETCO’s responses to regulatory consultations can be found on our website at

Fed decides to continues a programme for other central banks
During the financial crisis, the Federal Reserve launched a programme that allows foreign central banks to borrow US dollars. Amid fresh financial woes in Europe, the Fed has decided to extend the programme through August. It was poised to expire next month. "It was premature to allow these arrangements to expire, particularly given the sovereign-debt situation in Europe," said Dana Saporta, an economist at Credit Suisse. The Wall Street Journal (22 Dec.) , Global Financial Strategy (21 Dec.)

FINRA will bolster surveillance of high-frequency trading, CEO says
Richard G. Ketchum, chairman and CEO of the Financial Industry Regulatory Authority, said high-frequency trading firms can expect more surveillance in the new year. Ketchum noted an enforcement case recently brought against Trillium Brokerage Services. He called it a "good example" of what high-frequency trading companies can expect. The Wall Street Journal (12/20)

Australian Treasury Announces Reform Package

The Australian Treasury introduced the Competitive and Sustainable Banking System package that proposes three broad streams of reform to do the following: empower consumers, help smaller lenders put more competitive pressure on the “big banks”, and secure the financial system. The plan introduces a new pillar in the banking system based on the combined competitive power of mutual credit unions and building societies and accelerates the development of a “bullet bond” structure for RMBS issuance to strengthen and diversify RMBS funding for smaller lenders. Â It also proposes allowing all banks, credit unions and building societies to issue covered bonds and developing a "deep and liquid corporate bond market."

Trading firms campaign against EU dark-pool restrictions
EU officials are asking for comments on proposals that would restrict dark pools run by investment banks that match large share trades. Major share-trading firms are lining up the support of fund managers as they oppose the controversial limits. "The challenge now is to get everyone pushing in the right direction and to ensure that we are not overtaken by regulation," said Tony Whalley of Scottish Widows Investment Partnership. Reuters (22 Dec.)


JPMorgan acquires news London HQ

J.P. Morgan today announced major real estate investments in London, including the acquisition of 25 Bank Street in Canary Wharf, which will become the new European headquarters of its Investment Bank in 2012. The firm has also agreed to purchase 60 Victoria Embankment, a London building that the firm has been leasing since 1991 and that currently accommodates the firm's Treasury and Securities Services division.

JPMorgan Chase Buys Lehman's Old Headquarters in London

J.P. Morgan has just forked over $769 million to buy 25 Bank Street in Canary Wharf, home to the former home of the Lehman Brothers in London, to house its entire European investment banking division. The division, now located in four separate buildings will move to the new location in 2012.

Living on the edge

Low-lying deltas are home to half the world’s population and much of its wealth, but they are also on the frontlines of climate change. And the problems they face are significant.

Six Ways to Refuel Your Energy Every Day

1. Make sufficient sleep your highest priority.

spend a few minutes reviewing what's on your mind before you go to sleep, and then write down anything that's worrying you. What you're doing is effectively parking these concerns so that they don't end up keeping you from falling asleep, or back asleep in the middle of the night.

2. Take a renewal break at least every ninety minutes.
3. Keep a running list of everything
— literally everything — that you want or need to do.

4. Run up your heart rate or take a nap in the early afternoon.

5. Practice appreciation — and savoring.

6. Develop a transition ritual between work and home.

I invent nothing, I rediscover.


Keep your mouth shut and you will never bite off more than you can chew.


Nothing is more costly, nothing is more sterile, than vengeance.

Winston Churchill

The first wealth is health.

Ralph Waldo Emerson

Progress is impossible without change; and those who cannot change their minds cannot change anything.

George Bernard Shaw

It is not necessary to change. Survival is not mandatory."

--W. Edwards Deming,
American statistician, professor, author, lecturer and consultant

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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