Tuesday, February 1, 2011

News 110121: Floods, dolls and crocs, CXE No2, FCIC, the multi asset race......and blue bottles

Well, this week-end is the Big Swim, yep, the biggest of the season.

I hope it is nothing like last week-ends Mona Vale swim – blue bottle carnage.

(For clarity, Blue Bottles are stinging jelly fish, not the bottles left behind after new year celebrations)

Some gruesome photos here: http://www.oceanswims.com/default2.asp?active_page_id=260

Well, the floods have come and gone (as they do).

Now we’re left with the clean up bill…read tax.

Flood cost to top $5.6b

Taxpayers earning over $50,000 a year will be hit with a new levy to help pay the estimated $5.6 billion bill for the floods.


…I do not think this is a wise move by a coalition Government desperate for re-election.

Bye bye Julia and labour.

A couple of interesting ways to look at the Floods:

Before and after photos:


Link to a satellite map of Brisbane at the height of the flood. The map allows you to zoom in on any street or area you may be concerned about. It was a great help in identifying where aid was needed and how best to get there.


And this being Australia….

Pair rescued after ride on inflatable doll hits a snag


…hey, who wouldn’t swim into a baited croc trap?

Men showed 'absolute stupidity' by swimming into baited crocodile trap


with this I loved the related story also….

Bikini girls' dance of death near crocs


(2 photos here).

Enough, onto the news:

Congratulations to Chi-X Europe on market share.

Yes, Mongolia is exciting for its unproven mineral reserves. As a destination for LSE’s Millennium platform?....ummm, not very exciting.

PAVE?...ya gotta be brave.

The ASIC consultation paper, though very long is very comprehensive.

CP 145 is worth reading: http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp-145.pdf/$file/cp-145.pdf

The ASX response….ummm, I can think of better things to read than self contradictory reports.

Maybe start with the full 662 page report of the Financial Crisis Inquiry Commission http://fcic.gov/

DCSX: Dutch Caribbean Securities Exchange….amazing, wherever next?....Mongolia?

2011 will be the year of / race to multi asset trading with all the MTFs seeking to cover both equities and derivatives.

With this race will come about a lot of mis-information. The number one mis-understanding I anticipate is the old red herring about portfolio margining, correlations and margin offset.

Equities have a 3 day settlement cycle. Derivatives have a 3 month cycle and a tenure virtually as long as you like. The risk profiles are vastly different. Collateral is also very different from margin. Equity options and equity correlations are different to index options and interest rate options etc. etc. Take the time to familiarise yourself with the issues.

Nice ISDA report.

CFTC running out of space to store data…is just the sort of useful information they should tweet about.

A little more on the swims….but nothing to say about the cricket.

Sure we’re winning some one dayers but I’m still sulking about the test matches.

Avalon swim was great. The surf looked big at the start but had settled down by the finish.

An excellent run out on the expressway rip and then out past the headland to join another nice south running current.

The trick here was to angle towards the headland at the start (away from the finish). Once you passed the headland and rounded the buoy it was easy to join the current and just get nicely swept along to the next buoy / turning point. This was a ‘fast’ swim.

Water was circa 19 degrees which kept everyone moving along. The visibility was superb.

Good report and photos here:


Results here:


Warriewood to Mona Vale was a fearful swim.

It started off innocuous enough….a hot day, a fairly calm surf, crystal clear waters after the break…and warm water.

Out through the break not too bad, then into a bit of a current and a fairly choppy swim around the headland.

…then the carnage began. About 50 meters prior to the final turning buoy, blue bottles…and lots of ‘em. Always a greater risk with warmer waters.

If you want to see why this is my nemesis of the seas have a look at some of these gruesome snaps (before the blistering starts)…


Somehow, despite water safety pulling out a guy right in front of me, I was ‘unstung’. Sobering walk on the beach through the corridor of the wounded. Nothing you can do other than ice and lots of fresh water. Ouch, ouch, ouch….and scary.

Nasty little blow ins are such a a pain in the beach


Have a great w/end all….and heres hoping for cooler waters during the Big Swim,




Chi-X Europe second largest European trading venue in 2010

Chi-X Europe, the pan-European multilateral trading facility (MTF), was ranked as the second largest equity exchange by value traded in 2010, according to industry body the Federation of European Securities Exchanges (FESE), behind the London Stock Exchange Group (LSEG) and just ahead of exchange operator NYSE Euronext.






LSEG Signs Strategic Partnership with Mongolian Stock Exchange

London Stock Exchange Group ("LSEG") and the Mongolian State Property Committee ("SPC") announced January 18 that they have signed an exclusive Strategic Partnership...(more)


PAVE-ing the way for competition in Spain

Pave will use fellow alternative trading venue Equiduct’s trading platform, in addition to leveraging the market making experience of Equiduct shareholders Citadel Securities and Knight Capital.

MTFs will be charged €0.10 per execution by Iberclear, a fee not levied on the BME or in any other European market. In addition, MTFs are required to report the registration split, i.e. allocation of the shares to the relevant trading participant, two days after the trade by 15.00, while the BME has until 19.00.


Swiss Exchange members will gain access to Liquidnet
Swiss Exchange members will soon have access to Liquidnet, a trading platform for asset managers, as a dark pool, so they can anonymously trade large blocks of European listed shares. "Having access to this additional liquidity will greatly simplify and accelerate our members' trading activities," said Swiss Exchange CEO Christian Katz. Reuters (20 Jan.)

Swiss Exchange Finalizes Fees for MTF Data Use / SIX Exfeed to launch new real-time data service for non-display information usage


Fee schedule here:


Deutsche Börse picks Cinnober for market surveillance

Deutsche Börse is to implement market surveillance technology provided by trading solutions firm Cinnober, on its cash market Xetra and the derivatives market Eurex Exchange.




High-Frequency Trading Is 77% of UK Market

High-frequency trading has a solid hold in the UK Markets at 77 percent of transactions, according to a study by Tabb Group.


NYSE will launch "bond liquidity provider" program in March
NYSE Euronext said the Securities and Exchange Commission approved a "bond liquidity provider" program on its trading venue for fixed-income securities. The program will launch in March. "This is a major step forward in providing fixed-income price transparency to retail investors through an inclusive, open-access fixed-income exchange," said Kevin Molloy of NYSE Euronext. Securities Technology Monitor (1/24)

SGX Targets Non-Display Fee Dodgers

FINANCIAL TIMES: Singapore to Adopt Pre-Trade Risk Controls
By Kevin Brown 01/26/11

Singapore Exchange is to become the first Asian bourse to introduce pre-trade risk controls aimed at minimising the danger of a crash caused by high-speed electronic traders with direct access to the market.
It also comes ahead of the SGX’s planned introduction in August of
Reach, a new S$250m (US$195m) trading system that it says will be the world’s fastest, with a “door-to-door” order response time of 90 microseconds.
Clearing members will also be required to agree and monitor limits with direct traders on the mix of long and short positions that can be taken, and on credit arrangements for trading on margin.

Gan Seow Ann, SGX president, said the initiative would “strengthen our marketplace by enhancing the capability of our members and their customers to manage risk exposure more effectively. It will further promote direct access to the SGX trading platform, thereby widening our market reach and distribution.”

The SGX announcement follows the acquisition by
Nasdaq OMX, the US exchange operator, of FTEN, a privately held US company specialising in pre-trade risk management. The deal was seen as a reflection of the increasing focus on pre-trade risk control.

SGX Reach World's Fastest Trading Engine to Launch on 15 August

Singapore Exchange (SGX) said January 19 it is launching SGX Reach, the world's fastest trading engine, on 15 August 2011. With its ultra-low latency and significantly higher...(more)


ASX response to CP145


HKEx’s major challenges and priorities

Hong Kong Exchanges and Clearing Limited (HKEx) has begun the second year of its Strategic Plan 2010-2012, focusing on three key components: accelerating its platform infrastructure upgrade and necessary market structure reforms, reinforcing its position as a global listing venue by promoting international listings, and developing its renminbi (RMB) capability and Mainland compatibility.


Presentation by HKEx Chief Executive Charles Li at Annual Media Luncheon







Trayport, a leading provider of exchange trading systems worldwide, today announced that its client, the Dutch Caribbean Securities Exchange (DCSX) (www.dcsx.an), has gone fully operational. The news coincided with DCSX's inauguration ceremony held on 20th January which was attended by dignitaries from Aruba, Curacao, the Netherlands and Saint Marten



ICE clearinghouses have handled $15 trillion in CDS
ICE Trust, IntercontinentalExchange's North American credit default swaps clearinghouse, recently crossed the $9 trillion mark in cleared swaps. ICE Clear Europe, meanwhile, has cleared $6 trillion. ICE Trust launched in March 2009, while ICE Clear Europe started in July 2009. "In a little less than two years, ICE and its clearing members have made substantial progress toward increasing stability and transparency in the CDS market, and in reducing systemic risk globally," said Scott Hill, senior vice president and chief financial officer at ICE. Securities Technology Monitor (26 Jan.)



The International Swaps and Derivatives Association, Inc. (ISDA) today published two independent studies on transparency in the over-the-counter (OTC) equity derivatives market.

The first paper describes the structure, participants, products and existing forms of pre- and post-trade transparency for equity OTC derivatives. This is complemented by a quantitative study which analyzes differences in pricing amongst dealers and between dealers and end-users.

Full report here:

Trade Transparency in OTC Equity Derivatives Markets





FCIC Releases Report on the Causes of the Financial Crisis
Full 662 page report of the Financial Crisis Inquiry Commission.


America's FINANCIAL CRISIS INQUIRY COMMISSION produced its final report into the events that led to the banking system's meltdown in 2008. It concluded that the crisis was "avoidable" and spread the blame far and wide among policymakers and bankers. The commission's Republican members delivered a dissenting report, which gave greater weight to global factors. - See article


Who's NOT to Blame for the Financial Crisis? High-Frequency Traders


Europe considers bond buybacks to tackle its debt crisis
European governments are considering allowing indebted nations to borrow from the European Financial Stability Facility and use the money buy up their debt at depressed prices. The move could help Greece and other struggling countries reduce their debt burdens. Jean-Claude Trichet, president of the European Central Bank, and other European leaders have called for making the rescue fund more flexible. Bond buybacks would be an example of increased flexibility. The Wall Street Journal (21 Jan.) , Reuters (20 Jan.)

Economic Contribution of UK Financial Services 2010
This annual report from TheCityUK brings together data showing the contribution that financial services make to the UK economy. Key findings

in the report include:

- Financial services 10% share of UK GDP is higher than other major economies


Derivatives 2010

OTC derivatives markets The notional outstanding value of OTC derivatives contracts fell by 3.5% to $583 trillion in the six months to

end-June 2010. Notional value was broadly stable in 2009, following an 11% drop from the peak of $673 trillion in June 2008 (Chart 1, Table 1).

Volcker said he backs regulators' study on his rule
Paul Volcker, former chairman of the Federal Reserve, welcomed the study released by regulators offering recommendations for implementation of the rule named after him. "My sense is that the Report of the Financial Stability Oversight Council lays out an appropriate approach toward implementing the ban on proprietary trading by banking institutions and limiting their investment in hedge and equity funds," Volcker said. "The emphasis on prohibiting proprietary trading activities throughout a banking entity and appropriately distinguishing prohibited proprietary trading from 'permitted activities' is welcome." Read SIFMA's statement about the FSOC study of the Volcker rule. The Wall Street Journal (1/19)

Goldman, Others Warn of Swap Trade Concerns
The U.S. government's plan to drive derivatives through transparent trading venues could sap investor ...

Getco LLC, for example, is now considering whether to expand its market making business into swaps, Elizabeth King, associate general counsel at the big electronic trading firm, told the conference.

Brad Levy, managing director in Goldman Sachs' Principal Strategic Investments Group, said the clearing of swaps should likely be the focus as the market "sequences" into a new landscape, since it was core to the Dodd-Frank legislation.



Staff of the Commodity Futures Trading Commission (CFTC) will hold a public roundtable on January 28, 2011, from 9:00 am to 5:00 pm to discuss issues related to swap data recordkeeping and reporting requirements.


TECHNOLOGY SPENDING CUTS COULD SEE CFTC RUN OUT OF DATA STORAGE - O'MALIA The Commodity Futures Trading Commission is on course to run out of room to store its data by October because of an £11 million technology budget cut, Commissioner Scott O'Malia has claimed.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22201

*** Are these the same people that want us to send them more data?

'Double Secret Strategy': Reform Opponents Trying to Starve Regulators

Tom Steinert-Threlkeld

Commodity Futures Trading Commission member Bart Chilton told insittutional investors Wednesday that opponents of changes wrought by the Dodd-Frank Wall Street Reform Act are trying to block implementation of resulting rules by starving regulators of funding.



Twitter allows users to post messages of no more than 140 characters.


Surviving disaster with social media

Gerry McCuskerThe flood disaster is providing huge insights into how government, businesses and individuals are communicating more than ever via social media. There are lessons for comms teams everywhere. 

Deakin's Ross Monaghan says that in crisis situations, social media should be deployed to help in three key phases:
1) pre-event 2) during and 3) recovery.



Credit Suisse’s Light Pool Addresses Institutions’ Concerns
With all the talk about high-frequency trading, Credit Suisse's Light Pool, an electronic communications network (ECN) that boasts slowing down trades, seems to be bucking a trend.






Instinet has begun the regulatory filing process to launch a Canadian ATS. ICX (Instinet Canada Cross) will consist of two dark pools: a pre-market, VWAP (Volume Weighted Average Price) cross, and Instinet BLX, an algo-friendly dark pool that seeks to "build" block trades by combining the liquidity aggregation benefits of point-in-time crossing with the flexibility of a continuous market. ICX, which is expected to launch in the first half of 2011*, is based on Instinet's proven, liquid, globally-deployed dark pool model, and will be powered by Instinet's proprietary matching technology that was designed to maximize speed, performance

and reliability



FIDESSA TO CREATE 90 BELFAST JOBS AFTER RECEIVING £1M FROM INVEST NI Trading technology vendor Fidessa says it will add a further 90 staff to its Belfast operations after securing nearly £1 million from Invest Northern Ireland.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22185


Life is under no obligation to give us what we expect."

--Margaret Mitchell, American author

Whenever people say we mustn't be sentimental, you can take it they are about to do something cruel. And if they add, we must be realistic, it means they are going to make money out of it."

--Brigid Brophy, British writer

Figures for 2010 showed that GENERAL MOTORS sold more vehicles in China than in the United States for the first time.

The imminent trial of ALLEN STANFORD for an alleged $7 billion Ponzi scheme was put on hold, following psychiatric advice that he is mentally unfit for a hearing.

*** Ya don’t say!

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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