Wednesday, September 29, 2010

News 100924: Nasdaq, Quote, LSE CCP, Swift....and failure on the Bridge


Well, 9,000 runners and 1 person to beat…oops.

Evidence of the course run illustrated.

Evidence of my loss here:

http://www.marathon-photos.com/scripts/event.py?event=Sports/2010/Blackmores%20Sydney%20Running%20Festival&new_search=1&match=37358

Congratulations Daniel.

The Nasdaq initiative (price-size) is just further evidence of the various ways to slice the pie as execution has been utterly commoditised.

(So too will clearing eventually).

The costs of compliance and who wears the bill still have a long way to run in OTC clearing.

I do like transparency and ‘if you can’t measure it…’ but all this does add to costs (or at the very least strips costs out so they are apparent).

CCPs are NOT the cure for everything.

…and this is where I am a little surprised with the LSE view of CCP. It reads as “build it and they will come” to me.

I’m not so sure.

Set aside the economy of scale issues, vertical integration, enterprise vale etc…

Why would you want to build a new CCP?

European clearing fees are now at excellent levels.

Does the LSE, with the increased costs of fragmentation, really feel it is going to deliver cheaper clearing fees?

The banks already have a stake in LCH.CN…do they want more capital invested in more CCPs…to compete with their existing investment?

I’d certainly be tempted to look at the UK settlement model (where Euroclear still charge ‘clearing fees’).

My feeling is European equity clearing is approaching the point where it has been commoditised…pretty much as execution has.

There are still plenty of other dimensions to the exchange revenue model that are maybe not as capital, labour and regulatory intensive.

…now if this LSE CCP is for OTC business that has been mandated to be cleared…that could be a value proposition when offset against ‘on exchange’ flows.

If that was the case, it wouldn’t be appropriate for LSE to sit on the board of LCH.CN where the one product LCH.CN is enjoying strong revenue growth in…(but, hey, Xavier already resigned so that’s lucky).

Swift reduces fees by 20%!?...does that mean Sibos is drawing near?

Have a great w/end all (kids commence 2 weeks school holidays here),

S

http://clearingandsettlement.blogspot.com/


PLATFORMS

Nasdaq OMX to launch size priority venue
Global exchange group Nasdaq OMX is launching a new price-size priority equity trading platform in the US designed to encourage more trading in larger size.
http://www.thetradenews.com/trading-venues/mtfs-ecns/5074

Quote MTF

In a bid to attract flow to its platform, Quote MTF is putting a cap on commission fees at €14,000 until 2012 for all investors that sign up before 1 January 2011. The cap is intended to allow trading members to offer a low, fixed all-in price for their clients while gaining the benefits once the cap is reached.

The MTF is also offering a percentage of its total equity to passive liquidity providers. Bower says that the MTF is in discussions with a number of large investment banks that are interested in providing liquidity. Offering incentives through an equity stake rather than rebates will, he says, help to maintain the quality of liquidity on the Quote MTF order book

its execution pricing model of 0.14 basis points for aggressive trading and free passive trading

http://thetradenews.com/node/5072

QUOTE MTF OFFERS TO GIVE AWAY EQUITY TO ATTRACT BUSINESS

Hungary-based Quote MTF is offering to give away up to 40% of its shareholding to trading firms as it bids to secure participation in a fiercely competitive, consolidating market.

More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21815

BURSA MALAYSIA DERIVATIVES PRODUCTS MIGRATE TO CME GLOBEX

http://www.finextra.com/news/announcement.aspx?pressreleaseid=35665

Tokyo Stock Exchange Selects NYSE Technologies To Build Futures Platform
Based on the successful Tdex+ platform already trading options on the TSE since October 2009, this futures ...

Tdex+ based futures system utilizing its LIFFE CONNECT platform with several customized features.

http://wallstreetandtech.com/exchanges/showArticle.jhtml?articleID=227500120&cid=nl_wallstreettech_daily

INTERACTIVE DATA NAMES ALEX GOOR CIO

http://www.finextra.com/news/announcement.aspx?pressreleaseid=35660

BRICKLES EXITS FOR GOOD AS PLUS TAKES AXE TO STAFF NUMBERS AND TECH Plus Markets has narrowed its first half losses as a new management team embarks on an aggressive cost cutting programme that has seen headcount and technology expenditure slashed and the departure of vice chairman Simon Brickles.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21801

CBOE Stock Exchange Attracts Retail and Algo Order Flows with New Rebate Program
CBSX experiences 900 percent growth in volume with inverted "maker-taker" pricing program ...

http://advancedtrading.com/exchanges/showArticle.jhtml;jsessionid=TYWCE0SFIWHDFQE1GHRSKHWATMY32JVN?articleID=227500378&_requestid=30131

After a slow start, Japanese proprietary trading systems are seeing an uptick in turnover despite the overall decline in market volumes, says Takayuki Saito, the new head of electronic trading, Japan at Morgan Stanley MUFG Securities.

http://www.thetradenews.com/asset-classes/equities/5103

CLEARING

European Commission plans to migrate OTC derivatives to clearing via central counterparties will make the market more secure, but could hike trading costs for buy-side firms.

http://thetradenews.com/asset-classes/derivatives/5093

SCI report on CDS Clearing.

http://www.structuredcreditinvestor.com/story.asp?article=Clearing%20consensus&PubID=250&ISS=22352&SID=26047&SM=&SearchStr=&Category=Clearing&categories=77|Clearing&p_num=1

LSE in talks over London clearing house
By Jeremy Grant
FT.com / Companies / Financial Services
The London Stock Exchange is in talks with a group of Wall Street and European banks about jointly building and funding a clearing house in London, people familiar with the matter said.

http://www.ft.com/cms/s/0/56f78ffa-c26f-11df-956e-00144feab49a.html

EC Publishes Proposals on Derivatives, Market Infrastructures

The European Commission published a proposal for the regulation of over-the-counter (OTC) derivatives and market infrastructures that introduces a reporting obligation for OTC derivatives, a clearing obligation for eligible OTC derivatives, measures to reduce counterparty credit risk and operational risk for bilaterally cleared OTC derivatives, common rules for central counterparties (CCPs) and for trade repositories, and rules on the establishment of interoperability between CCPs. The commission notes the proposal is consistent with the recently adopted U.S. legislation.

The proposal introduces the following measures: requires the use of CCP clearing for OTC derivatives that meet predefined eligibility criteria; sets specific targets for legal and process standardization and bilateral clearing of OTC derivatives transactions; requires market participants to report all the necessary information on their OTC derivatives portfolios to a trade repository or, if that would not be possible, directly to regulators; and requires the publication of aggregate position information. The European Securities and Markets Authority (ESMA) will also be responsible for the surveillance of trade repositories and for granting or withdrawing their registration. The proposed regulations are scheduled to take effect starting at the end of 2012.

http://ec.europa.eu/internal_market/financial-markets/docs/derivatives/20100915_proposal_en.pdf

http://ec.europa.eu/internal_market/financial-markets/docs/derivatives/20100915_impact_assessment_en.pdf

Nasdaq OMX, GFI to Clear Power Contracts in U.S.

Nasdaq OMX Group and GFI Group Inc. plan to clear trades in power and natural gas on EnergyMatch, GFI’s electronic platform for trading in commodities. The clearing service will be Nasdaq OMX Commodities Clearing Company.

http://www.securitiestechnologymonitor.com/news/nasdaq-gfi-power-clearing-26114-1.html?ET=securitiesindustry:e2111:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__092110

SWIFT To Reduce Message Prices By An Average 20 Percent - Customers Will Save EUR 70 Million In 2011 - Largest Price Decrease Since 1995
Press Release
SWIFT, the provider of global financial messaging services, announced yesterday that it is reducing the price of messages on its core FIN service by an average of 20 percent. This will represent an estimated saving of EUR 70 million for SWIFT customers in 2011. The new pricing plan takes effect on 1 January 2011.
http://jlne.ws/cxgbC5

21/09/2010 11:54:00

SWIFT LINKS SECURITIES MATCHING SYSTEM TO MULTIPLE CCPS

Financial messaging outfit Swift is set to link its securities matching system to a range of central clearing counterparties, including EuroCCP, Six x-clear and LCH.Clearnet, enabling brokers to direct their matched off-exchange trades to a variety of providers.

More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21811

Singapore Exchange – First In Asia To Clear OTC Traded Financial Derivatives

Starting with the clearing of Interest Rate Swaps (IRS) denominated in Singapore and US Dollar, the new service is scheduled to be operational by October 2010, subject to regulatory approval.

To date, ten banks have initiated membership processes. They are Barclays Bank PLC, Citibank N.A., Credit Suisse AG, DBS Bank Limited, Deutsche Bank AG, The Hongkong and Shanghai Banking Corporation Limited, Oversea-Chinese Banking Corporation Limited, The Royal Bank of Scotland plc, Standard Chartered Bank and United Overseas Bank Limited.

http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=92903

EMCF Clearing Fund contributions.

http://www.emcf.com/upload/uploads/Regulation%20Clearing%20Fund%20101001.pdf

*** increase as of 1st Oct.

POLICY

EU Council Publishes Texts on ESMA, EBA and ESRB

The EU Council published the latest regulatory proposals for the following: the European Parliament and the Council establishing a European Securities and Markets Authority (ESMA); the proposal for a regulation of the European Parliament and the Council establishing a European Banking Authority (EBA); and the proposal for a Council Regulation entrusting the European Central Bank (ECB) with specific tasks concerning the functioning of the European Systemic Risk (ESRB).

ESMA text

EBA text

ESRB text

CFTC's Gensler offers insight into swaps oversight
Gary Gensler, chairman of the Commodity Futures Trading Commission, outlined a plan for implementing measures in the Dodd-Frank act. Gensler estimated how many companies might be affected by changes to the massive swaps market and said the CFTC is working to define "swap dealer, "major swap participant" and other terms. "Initial estimates are that there could be in excess of 200 entities that will seek to register as swap dealers," Gensler said. Read Gensler's full remarks. The Wall Street Journal (9/17)

Real-Time Swaps Reporting May Start in Sept '11-CFTC

The head of the U.S. futures regulator said Tuesday that mandatory real-time reporting of swaps trades, a key measure to promote market transparency, could begin as early as September 2011.

http://advancedtrading.com/regulations/showArticle.jhtml;jsessionid=GI3UJCWW24RQZQE1GHRSKHWATMY32JVN?articleID=227500322&_requestid=261509

CFTC plans to consider and vote on rules for derivatives
Gary Gensler, chairman of the Commodity Futures Trading Commission, said regulators are poised to vote Oct. 1 on rules for clearing of derivatives. Gensler said the rules include governance procedures at exchanges, swap-trading platforms and clearinghouses. The CFTC also will consider rules for clearing venues that are deemed systemically important. The Wall Street Journal (9/22)

PARTICIPANTS

Deutsche Bank's plans for Basel III add pressures to competitors
Deutsche Bank announced a €9.8 billion cash call on the same day that Basel III capital rules were unveiled, piling pressures on its rivals. Deutsche Bank vowed to meet the rules five years before it is required to do so, making it more difficult for other banks facing capital concerns to bide their time. "Reaching Basel targets before the official schedule will, I think, become a point of excellence ... There will be some pressure on other banks that are not able to meet this sort of target," said Konrad Becker, an analyst at Merck Finck. Bank Systems & Technology (16 Sep.)

Deutsche Bank fixes subscription price for new shares at EUR 33.00 per share

http://www.db.com/ir/en/content/capital_increase_2010.htm

Singapore, 15 September 2010 – Deutsche Bank today announced that it is the first institution to implement Third Party Clearing services for a client on the Singapore Exchange (“SGX”). The client, Cantor Fitzgerald (Singapore) Capital Markets Limited (“Cantor Fitzgerald”), is a leading global financial services firm serving the institutional equity and fixed income markets. Cantor Fitzgerald has appointed Deutsche Bank to provide Third Party Clearing services for its clearing and settlement activities.

BANK OF AMERICA MERRILL LYNCH TO FORM DERIVATIVES CLEARING UNIT

http://www.finextra.com/news/announcement.aspx?pressreleaseid=35747

Don't be afraid your life will end; be afraid that it will never begin."

--Grace Hansen,
American dance director

The shortest way to do many things is to do only one thing at once.

- Samuel Smiles

An Austrian zookeeper enlisted the help of unwitting rhinos by growing cannabis in their enclosure. The scheme worked for years until a stool pigeon betrayed him.

http://www.spiegel.de/international/zeitgeist/0,1518,718603,00.html#ref=nlint

Price of Stolen Credit Card Data Has Dropped to $1.50

http://www.banktech.com/blog/archives/2010/09/price_of_stolen.html?cid=nl_bnk_daily

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

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.

http://www.sydneyrunningfestival.com.au/

(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!

http://abcnatation.com/natation/dauphine-savoie/74/annecy/

*** 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.

S

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."

--Aristotle,
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.

PLATFORMS

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.

http://www.bloomberg.com/news/2010-09-07/chi-x-global-names-cohen-new-ceo-lowrey-to-move-to-unit.html

FINANCIAL NEWS: Turquoise's Two-Year Struggle to Break Even
By Luke Jeffs
09/06/10
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

http://www.securitiestechnologymonitor.com/news/nyse-euronext-volume-drop-26043-1.html?ET=securitiesindustry:e2099:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__090710

[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.

http://www.londonstockexchange.com/about-the-exchange/media-relations/press-releases/2010/monthlymarketreportaugust2010.htm

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.

http://www.securitiestechnologymonitor.com/news/-26055-1.html?ET=securitiesindustry:e2102:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__091010

BATS GLOBAL MARKETS UNVEILS NEW PARALLEL ROUTING STRATEGIES
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.

http://www.batstrading.com/resources/press_releases/BATS_Parallel_Routing_FINAL.pdf

BGC PARTNERS TRADES FULLY-ELECTRONIC EURO INTEREST RATE SWAPS

http://www.finextra.com/news/announcement.aspx?pressreleaseid=35405

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.

http://blogs.reuters.com/financial-regulatory-forum/2010/09/07/qa-whats-at-stake-for-swap-execution-facilities/

THE ASSET: Here Comes High-Frequency Trading
By Rodney Diola
08/31/10
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%.”

http://www.theasset.com/article/18326.html

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.

http://www.securitiestechnologymonitor.com/news/-25902-1.html?ET=securitiesindustry:e2070:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose_060310

HKEX AUTOMATES STAMP DUTY REPORTING AND PAYMENT

http://www.finextra.com/news/announcement.aspx?pressreleaseid=35497

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 ...

http://wallstreetandtech.com/exchanges/showArticle.jhtml?articleID=227400332&cid=nl_wallstreettech_daily

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

CLEARING

INTEROPERABILITY

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.

http://thetradenews.com/node/5003

Swiss Exchange May Enter Derivatives Clearing as Demand Rises, Zeeb Says
Bloomberg
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.

http://www.bloomberg.com/news/2010-09-07/swiss-exchange-may-enter-derivatives-clearing-as-demand-rises.html

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.

http://www.lchclearnet.com/Images/MCLA_tcm6-55539.pdf

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.

http://www.ft.com/cms/s/0/3c8f515a-ae99-11df-9f31-00144feabdc0.html?ftcamp=rss

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.

http://www.bis.org/press/p100901.htm

Australian OTC Market size:

http://www.rba.gov.au/media-releases/2010/mr-10-19-tables.html#otc

*** 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.
http://www.stuff.co.nz/timaru-herald/business/4098177/NZX-clearing-house-system-gets-the-green-light

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.

http://www.asiaetrading.com/tocom-to-acquire-tge-shares-of-jcch-stock/

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.)

POLICY

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

http://advancedtrading.com/regulations/showArticle.jhtml;jsessionid=A04MNQUDV40RDQE1GHPSKHWATMY32JVN?articleID=227200050&_requestid=469111

Comprehensive round up on “flash crash”

http://www.smartbrief.com/servlet/wireless?issueid=645C3BDB-AAE9-4D92-9972-4917219CFD00&sid=74e38083-c41c-42e2-86b8-ee8fb79be4bf

FSA on MARKET OUTAGES

Trading venue outages

Markets infrastructure providers software resiliency survey

http://www.fsa.gov.uk/pubs/newsletters/mw_newsletter36.pdf

Basel III agreement announced

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

http://www.businessspectator.com.au/bs.nsf/Article/Basel-III-Banks-must-triple-basic-capital-buffers-98PCV?OpenDocument&src=hp6&src=pmm

The FSA’s markets regulatory agenda

http://www.fsa.gov.uk/pubs/other/markets.pdf

*** 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.

http://www.securitiestechnologymonitor.com/news/-25953-1.html?ET=securitiesindustry:e2081:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose_060310

CFTC TAKES ISSUE WITH CBOT BLOCK ON ELX FUTURES

http://www.finextra.com/news/announcement.aspx?pressreleaseid=35205

07/09/2010 11:51:00

SECURITIES DEPOSITORIES TO RAISE PUBLIC POLICY PROFILE

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

PARTICIPANTS

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 SPEND $13.4BN ON TRADING INFRASTRUCTURES IN 2010 - TABB

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