Access & Interoperability, 5% in the Dark, give Ronald a break

Well a flurry of activity sees Access and Interoperability back in the headlines.

I agree with most of Sharon Bowles MEP comments. The bit that worries me is: “hamper the ability of sell-side firms to select between clearing providers based on price and quality of service.”

That assumes interoperability decisions are based on price and service. I disagree, vested interests have a huge weighting in such strategic initiatives. I do expect interoperability to gain traction. I expect the primary drivers for the initial wave of interoperability will be vested interests (those that are stake holders in DTCC (indirectly EuroCCP), LCH.Clearnet and X-clear.

Once the vested interests have settled down, we'll see more of a trend towards CCP of choice based on customer segmentation. (HFTs, multi asset class etc.)

A nice piccie from the Economist portraying superior Aussie intelligence:

http://www.economist.com/blogs/dailychart/2011/05/gambling&fsrc=nwl

will have to wait. I prefer the Somalia pirates piccie.

Appalling news that that stupid goofy footed clown that we used to jam french fries into has been rebranded as a "balanced, active lifestyles ambassador". He's just a pathetic, stupid clown, easy to loath, steadfast in his ability to be ridiculed. And that's what I want from my Ronald. Not some balanced, active lifestyle ambassador. Where's the joy in jamming a french fry in his ear?

PLATFORMS ASIA

Exchange mergers in Asia are unlikely, SGX's Bocker says
Singapore Exchange CEO Magnus Bocker said mergers among Asian bourses are difficult because of regulatory differences and other challenges. "Exchange mergers in Europe were driven by regulations," Bocker said. "After the monetary union was created, Europe needed to make the market more efficient to compete with the US. Asia is a lot different as each country has varied stages of development and rules." Bloomberg Businessweek (12 May.)

BSE turnaround requires patience: CEO
rediff.com

Where are the volumes? That's almost the only question most ask when you talk about the Bombay Stock Exchange
Today, BSE has greater control over its depository, technology and a strong web-based distribution network. Technology was strengthened through acquisition of Market Place Technologies.
We brought a turnaround in the clearing and settlement business by setting up Indian Clearing Corporation, a 100 per cent subsidiary

http://www.rediff.com/business/report/bse-turnaround-requires-patience-ceo/20110513.htm

HONG KONG — Hong Kong's new commodity exchange backed by China's biggest bank and a Russian tycoon began trading Wednesday as the Asian city attempts to challenge established markets in Europe and the U.S
Shareholders in the exchange include Industrial & Commercial Bank of China Ltd., the country's biggest state-owned commercial lender, and Cosco Group, a state-owned shipping company. EN+ Group, a mining and energy group controlled by Russian tycoon Oleg Deripaska, is also a shareholder
Read more: http://www.chron.com/disp/story.mpl/ap/business/7569684.html#ixzz1MsAx9QCO

PLATFORMS

NASDAQ OMX AND ICE ABANDON NYSE EURONEXT BID OVER DOJ CONCERNS Nasdaq OMX and and IntercontinentalExchange (ICE) have dropped their takeover offer for Nyse Euronext after regulators made clear the deal would not clear antitrust hurdles.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22558

Taking Stock of Stocks: The World After NYSE Deutsche Boerse

With the NASDAQ OMX Group and IntercontinentalExchange dropping their bid to take over the company that operates the New York Stock Exchange, the way is cleared for NYSE Euronext and Deutsche Boerse to complete their plan to combine. This is what equities markets will look like, as NYSE Euronext and Deutsche Boerse merge ... and BATS Global Markets becomes a publicly traded player.

http://www.securitiestechnologymonitor.com/photo_gallery/1_50/27943-1.html

Stars align for possible merger of Nasdaq OMX and LSE:

Robert Greifeld, CEO of Nasdaq OMX Group, might have an opportunity to acquire London Stock Exchange Group amid a wave of consolidation and rejection among bourses. Nasdaq OMX and IntercontinentalExchange dropped their bid for NYSE Euronext because of regulatory concerns. LSE is facing a counterbid for its offer to merge with Canada's TMX Group. "It makes sense," said Niki Beattie, CEO of Market Structure Partners. "He's had a look at LSE before, and it would cost him less possibly to do it now. Everything was looking pretty bad for him, and now actually it looks a bit easier. I'm convinced he will explore a deal with LSE." Bloomberg (16 May.)

BATS Global Markets discloses Chi-X Europe payment

Multilateral trading facility (MTF) Chi-X Europe’s shareholders will receive approximately 4.4 million newly issued shares of BATS Global Markets stock and approximately US$36 million in cash, following the latter’s takeover of the MTF.

http://www.thetradenews.com/trading-venues/mtfs-ecns/6185

FINANCIAL NEWS: Bats Europe Tells Half of Chi-X Europe Staff to Go
Bats Europe plans to cut around 50% of Chi-X Europe staff following its acquisition of the pan-European trading platform, according to two people familiar with the matter.
Bats, which has said it will not be keeping the Chi-X Europe technology, will make the bulk of the cuts in Chi-X Europe’s technology and operations department, which currently employs around 24 people.

Plus creates new swap contract for derivatives launch
By Philip Stafford - Financial Times
Plus Markets Group is to make a new interest rate swap contract the centrepiece of its new derivatives exchange as it converts itself from niche UK microcap listings platform to stock and derivatives bourse. The UK group will launch its own US dollar-denominated swap interest contract (SIC) in conjunction with FTSE International, the index compiler.
http://jlne.ws/k3tBgw

CLEARING

BATS EUROPE PLANS PREFERRED INTEROPERABLE CLEARING SERVICE

http://www.finextra.com/news/announcement.aspx?pressreleaseid=39317

SIX X-CLEAR CONFIRMS REGULATORY GREEN-LIGHT FOR INTEROPERABILITY

http://www.finextra.com/news/announcement.aspx?pressreleaseid=39305

LCH looks to interoperability to combat equity revenue slump

Equity clearing revenue fell to €44.3 million from €66.6 million year-on-year, and also declined as a proportion of overall clearing revenue from 27.4% in 2009 to 21.8% in 2010. A statement from LCH.Clearnet CEO Roger Liddell noted, “Tariff reductions in equity clearing fees implemented in 2009 and 2010 largely contributed to a fall in clearing revenue”.

http://www.thetradenews.com/asset-classes/equities/5961

EMIR compromise to put trading costs in the clear

Clearing interoperability in Europe’s equities markets now seems likely to be enshrined in the European market infrastructure regulation (EMIR), but the new framework may not be signed off during the Hungarian presidency of the Council of the European Union, which closes at the end of June.

http://www.thetradenews.com/regions/europe/6199

INTEROPERABILITY, SHARON BOWLES MEP

Concern that post-trade interoperability could spread systemic risk in Europe's financial markets has led one MEP to propose that it should be restricted. But another, Sharon Bowles MEP, chair of the European Parliament's Economic and Monetary Affairs Committee, believes that competition relies upon it.

Delaying interoperability arrangements for cash equity transactions would severely hamper the ability of sell-side firms to select between clearing providers based on price and quality of service.

http://www.thetradenews.com/node/5920

OTC Derivatives Cash at Risk Dropped to $21 Trillion, BIS Says
By Matthew Leising - Bloomberg
May 17 (Bloomberg) -- The amount of cash at risk in the global over-the-counter derivatives market dropped at the end of 2010 as the value of interest-rate swaps declined. Overall trading totals rose 3 percent.
http://www.bloomberg.com/news/2011-05-17/otc-derivatives-cash-at-risk-dropped-to-21-trillion-bis-says.html?cmpid=msnmoney

Clearing houses 'would not have prevented financial crisis'
IFR
The Dodd-Frank Wall Street Reform and Consumer Protection Act – and its mandate of clearing as much of the over-the-counter derivatives market as possible through central counterparties – would not have prevented the financial crisis of 2008, according to renowned derivatives academic John Hull. In a broadly based interview with IFR, Hull indicated the failure of some observers to distinguish between the kinds of non-standardised, illiquid, credit default swaps that AIG sold and the standardised, liquid, single-name CDS that has led to some false conclusions regarding the potential benefits of clearing.
http://jlne.ws/krA01q

ISDA Announces Interest Rate Derivatives Trade Repository Selection
NEW YORK, Wednesday, May 11, 2011 – The International Swaps and Derivatives Association, Inc. (ISDA) announced today that the ISDA Rates Steering Committee (RSC) has chosen Depository Trust & Clearing Corporation (DTCC) to partner with the RSC on the next stage of development of the Interest Rate Trade Repository. This selection is the result of a public Request for Proposals (RFP), which was issued March 14, 2011. The ISDA RSC, which consists of senior business representatives in the interest rate market from both buy- and sell-side firms, issued the RFP and selected the provider

http://www2.isda.org/

POLICY

IOSCO SETS OUT DARK LIQUIDITY PRINCIPLES

The Technical Committee of the International Organization of Securities Commissions (IOSCO) has

published a final report, Principles on Dark Liquidity,

http://www.iosco.org/library/pubdocs/pdf/IOSCOPD353.pdf

33 pages and 6 principles.

BIS Publishes OTC Derivatives Market Activity in Second Half of 2010

The Bank of International Settlements (BIS) published a report on over-the-counter (OTC) derivatives market activity in the second half of 2010 that found that total notional amounts outstanding of OTC derivatives rose by 3 percent in the second half, reaching $601 trillion by the end of December 2010. Notional amounts outstanding of credit default swaps (CDS) continued to contract, falling by 1 percent after the 7 percent decline in the first half, while outstanding equity-linked contracts shrank by 10 percent. Gross market values of all OTC contracts went down by 14 percent, driven mainly by the 17 percent decline in the market value of interest rate contracts. CDS market values fell by 19 percent. Overall gross credit exposure dropped by 7 percent to $3.3 trillion, compared with a 2 percent increase in the first half of 2010.

http://www.bis.org/publ/otc_hy1105.pdf

International Options Market Association (IOMA)

2010 Derivatives Market Survey

http://www.world-exchanges.org/files/statistics/excel/2010_IOMA_Survey.pdf

*** 67 pages of stats here

SA/BoE Publish Joint Paper on Banking Supervision

The Bank of England (BOE) and the Financial Services Authority (FSA) published a joint paper, titled The Bank of England, Prudential Regulation Authority - Our approach to banking supervision setting out the current thinking on how the future Prudential Regulation Authority (PRA) will approach the supervision of banks, building societies, credit unions and investment firms, which outlines the following issues: the principles underlying the PRA's approach; the scope of the PRA; the PRA's risk assessment framework; the PRA's forward looking, judgment-led approach to supervision; the approach to policy-making that will support the judgment-led model; and the approach to authorizing firms and approving individuals. The document complements HM Treasury’s February 2011 consultation and the forthcoming white paper and draft Bill, which lay out the legislative framework.

http://www.fsa.gov.uk/pubs/speeches/boe_pra.pdf

Dark pools break 5% barrier in Europe

Over the past 12 months the proportion of trading in Europe conducted in the dark has increased from 1.83% in April 2010 to 5.24% in April 2011, reflecting in part the increased comfort that buy-side traders have with using dark pools.

http://www.thetradenews.com/trading-venues/dark-pools/6194

S&P AGREES TO CUT ISIN FEES FOLLOWING EU PROBE Standard & Poor's (S&P) has agreed to cut the prices it charges for the distribution of International Securities Identification Numbers, following a two-year probe by the European Commission into allegations of abusive pricing and monopoly practices.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22556

Will U.S. Firms Pay Less for International IDs?

Large U.S. financial firms could end up paying a lot less to receive international securities identification codes and reference data on U.S. securities, as a result of a recent ruling by the European Commission regarding Standard & Poor's pricing policies.
On May 16, Standard & Poor's said it will charge an initial fee of $15,000 a year to financial firms receiving a direct feed from a new identification service for U.S. securities and the same fee to data vendors wishing to redistribute the feed..
S&P will no longer charge any firms that source the ISINs directly from information vendors such as Bloomberg and Thomson Reuters.

http://www.securitiestechnologymonitor.com/news/cusip-isins-united-states-save-fees-27974-1.html?ET=securitiesindustry:e2520:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051911

Speech by the Financial Secretary to the Treasury, Mark Hoban MP at the Markit Conference, The Grange City Hotel, London
HM Treasury
Thank you. It's a pleasure to be here this morning and to talk to you about the regulatory reform of markets. As the Minister responsible for financial services, I spend a huge amount of time on the vast array of European markets' initiatives.

http://www.hm-treasury.gov.uk/speech_fst_120511.htm

Market Watch Newsletter No. 39

Contents

• Zen implementation

• Introduction of additional validation for transaction reports on Zen implementation date (soft go-live)

• Intention to move from FRN to BIC only for reporting firm ID – reminder

• MIC to be used for the EDX London market following its acquisition by Turquoise

• Reliance on LIFFE feed

• Review of the Transaction Reporting User Pack (TRUP)

http://www.fsa.gov.uk/pubs/newsletters/mw_newsletter39.pdf

PARTICIPANTS

Penson's growing dominance in third-party clearing market worries local investors
Brisbane Times
When the global equities clearing house Penson Worldwide suffered a massive 40 per cent fall in its shares last week after disclosing some troubles with horse-track backed bonds, it put the focus squarely on Australia's third-party clearing arrangements.

http://www.brisbanetimes.com.au/business/pensons-growing-dominance-in-thirdparty-clearing-market-worries-local-investors-20110515-1eo3l.html

Northern Trust to Buy Citadel Asset Administration Business

Northern Trust will acquire Omnium, which has about $30 billion of hedge fund assets under its administration and $40 billion from other financial institutions. The firm relies on software delivered online to provide administrative services that are intended to allow clients to trade in stocks, bonds or any other asset class at any time, at any market int he world.

http://www.securitiestechnologymonitor.com/news/northern-trust-citadel-omnium-acquisition-27927-1.html?ET=securitiesindustry:e2508:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051611

What Citadel’s Sale Of Omnium Means For Hedge Fund Investors

For years, hedge funds did that administration in-house. But then the Bernard Madoff scheme was revealed and so-called self administration came to a near halt.

http://blogs.forbes.com/halahtouryalai/2011/05/16/what-citadels-sale-of-omnium-means-for-hedge-fund-investors/

HSBC to Hire over 1,000 Staff in Singapore
Kompas
HSBC Holdings PLC plans to hire more than 1,000 staff in Singapore

http://english.kompas.com/read/2011/05/13/10154674/HSBC.to.Hire.over.1.000.Staff.in.Singapore.

STUFF

LinkedIn and the end of the world: Rational man?

Only 10% of the stock was on offer.

http://news.economist.com/cgi-bin1/DM/t/eCaZ30dHglU0BV4a0XqMK0EI

Google Now Third Largest Maker of Servers, CIO Says

Google has become the third-largest maker of computing servers, behind HP and IBM, according to Ben Fried, its chief information officer.
And all the servers it makes are for its own use, Fried said at the first Bloomberg Enterprise Technology Summit Tuesday in New York.
Building servers rather than buying off-the-shelf machines "dramatically lowers" Google's costs, Fried said.

http://www.securitiestechnologymonitor.com/news/google-third-largest-server-maker-now-fried-27953-1.html?ET=securitiesindustry:e2515:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051711

Price Tag for Somali Piracy Surges
International piracy is emerging as a market in its own right, one that cost the global economy an estimated $8.3 billion in 2010. Efforts to contain the problem are having little impact, and the costs of lost booty, ransom and other costs associated with pirates could double within a few years.

http://www.spiegel.de/international/world/0,1518,763063,00.html#ref=nlint

SEND OUT THE CLOWN

A resolution at MCDONALD'S annual shareholder meeting called on the fast-food chain to axe Ronald McDonald in an effort to stop the firm marketing to children. The company's bosses were unimpressed, though, calling the burger-wielding clown (which it has rebranded a "balanced, active lifestyles ambassador"), a "force for good". - See article http://news.economist.com/cgi-bin1/DM/t/eCaXO0dHglU0BV4a0XmLW0Ep

Don't dream it, be it."

--Tim Curry,

British actor, from "The Rocky Horror Picture Show"

If you hire only those people you understand, the company will never get people better than you are. Always remember that you often find outstanding people among those you don't particularly like."

--Soichiro Honda,
Japanese engineer and industrialist

CXA, CXJ, CXC, ASIC, LSE, TMX, Sola, I/Op...Acronym fatigue?

Aussie market structure issues continue to dominate domestic debate.

e.g. ASIC is aiming to perform market supervision on a cost recovery basis. Most of those costs, (29.9myn over 5 years, or 6myn / year) are paid by ASX (3.7 myn per year). That leaves 2.3myn per year to be paid for by other MLO’s: (CXA, National Stock Exchange, Bendigo, APX etc.).
Full list of Aussie market licences at:
http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Licensed%20domestic%20financial%20markets%20operating%20in%20Australia

Lots of news also in Canada. Not all of which I follow, but it appears in response to a record month for Chi-X Canadsa, Omega is reducing fees and Alpha is stirring up the maple syrup with exchange status and a rival TMX bid via syndication.

Interoperability takes a step forward(?), or is this just the resumption of the previous LCH / X-Clear status?

I'm not surprised the OTC market is smaller than claimed. I'd rather see more effort put into accruately measuring our markets and then managing the risks rather than blindly prescribing lets CCP clear 'everything' that moves. If you can't measure it....

For those enjoying the Northern Hemisphere Spring; Yes, I'm jealous. 6 weeks from now we have the soltice...and the days will start getting longer here. Enjoy it while you can!

I don't know who won the Eurovision, but a nice interactive map attached. I do know my Reds are the top of the Super 15 Rugby...and that is simply wonderful!

Have a great week all,

S

PLATFORMS ASIA

REUTERS: AUSTRALIA FACES CLEARING AND SETTLEMENT CONUNDRUM IN WAKE OF CHI-X LICENCE
By Nathan Lynch
The Australian government's decision to grant a market licence to Chi-X this week has highlighted two inconvenient truths about the Australian exchange landscape - inconvenient truths that go by the names of clearing and settlement.
Fairweather said the general consensus in the markets - based on the experience from overseas - is that there is room for competition in the clearing space but settlement, by its very nature, is non-contestable. As such, any review would need to take account of governance arrangements for clearing and settlement services, the facilitation of competition in relation to clearing and the fair pricing of the ASX's settlement's services.
http://www.reuters.com/article/2011/05/05/australia-exchanges-regulation-idUSL3E7G50F420110505

AUSTRALIAN FINANCIAL REVIEW: ASIC FUNDS IN QUESTION AS EXCHANGES FLOURISH
By Patrick Durkin, 05/12/11
The federal government, its corporate regulator, the stock exchanges, brokers and investors are all looking at each other over who will pay the $29.9 million bill it will cost to police the stockmarket.
When the Australian Securities and Investments Commission took over supervision of the stockmarket from the Australian Securities Exchange last August, the legislation included the unusual ability for the regulator to recoup its costs, rather than being shouldered by the government. That cost has now been estimated at $29.9 million over five years and in the first year the ASX was required to pay $3.4 million, of a $3.7 million annual fee, to help fund ASIC's new role.
That is expected to leave about $2.3 million for the new stock exchange Chi-X and other smaller exchanges to meet each year. But the government has said it will consult with the industry again later this year on exactly who will pay.

TRADE NEWS: CHI-X JAPAN MAINTAINS POSITION AS LARGEST PTS
Chi-X Japan, the proprietary trading system (PTS) owned by market operator Chi-X Global, has continued its solid start to the year as it battles to become the largest alternative market in Japan.
According to its own figures, Chi-X Japan accounted for 1.62% market share of blue chip index the Nikkei 225 in April 2011, up from 1.2% in the previous month and 1.16% in February. The increase saw Chi-X Japan maintain its position as the largest PTS in the country for the second month in a row, just ahead of SBI Japannext.
http://www.nomuraholdings.com/news/nr/asia/20110509/20110509.pdf

CHI-X GLOBAL IN STAKE SALE TALKS; Chi-X Global is in advanced talks with four trading firms and banks to take a minority stake in the alternative share trading platform operator reports the FT, citing "three people familiar with the matter".
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22487
Chi-X Global is in advanced talks with four trading firms and banks to take a minority stake in the alternative share trading platform operator reports the FT, citing "three people familiar with the matter".
The group is in talks with Getco, the Chicago-based proprietary trading firm, Quantlab Financial, a Houston-based rival, Deutsche Bank and Bank of America Merrill Lynch about taking a stake as part of a deal which values Chi-X Global at around $50m, the UK broadsheet reports.


INDIA'S EQUITY MARKET MICROSTRUCTURE EVOLUTION
India's equity market microstructure has undergone a significant transformation over the past few years. The key drivers of this change have largely been..
HTTP://WWW.ASIAETRADING.COM/INDIA-EQUITY-MARKET-MICROSTRUCTURE-EVOLUTION/

HKEX APPOINTS CHIEF ADMINISTRATIVE OFFICER
HKEx has appointed Joseph Meyer as its first CAO.
Hong Kong Exchanges and Clearing Limited (HKEx) has created a Chief Administrative Officer (CAO) position to oversee its major projects, Administration Department and Human Resources Department.
His most recent position was Representative Director of Chi-X Japan.
" there are several major projects, including the introduction of OTC Clearing (the clearing of derivatives traded in Hong Kong’s over-the-counter, or OTC, market) and Hosting Services, major IT upgrades and the completion of our Next Generation Data Centre, that require organisation-wide coordination”
http://www.hkex.com.hk/eng/newsconsul/hkexnews/2011/110509news.htm

HKEx Publishes its 2011 First Quarter Results\
http://www.hkex.com.hk/eng/newsconsul/hkexnews/2011/Documents/110511news.pdf

SINGAPORE EXCHANGE ENHANCES SECURITIES CLEARING FUND STRUCTURE
The enhancements and accompanying changes to the CDP Clearing Rules will take effect from 3 May 2011.
The revised Clearing Fund structure is scalable, linking clearing members’ contributions more closely to the level of risk they bring to the clearing system. Their clearing fund contributions will change in line with their securities traded values. Previously, the contributions remain fixed in aggregate.
Under the revised structure, CDP only requires a portion of clearing members’ increased contributions to be deposited upfront. Clearing members will be called upon to deposit the remaining contributions under conditions of increased risk or to meet losses arising from clearing member default.
Details are available on SGX website at:
http://www.sgx.com/wps/portal/corporate/cp-en/regulation/rulebooks_manuals/cdp_clearing_rules/amendments
http://www.asiaetrading.com/singapore-exchange-enhances-securities-clearing-fund-structure/



ASIC CONSULTS ON MARKET INTEGRITY RULES FOR THE FEX MARKET
ASIC today announced it has released a consultation paper proposing new market integrity rules which will apply should Financial and Energy Exchange Limited (FEX) be granted an Australian market licence.
http://www.asic.gov.au/asic/asic.nsf/byHeadline/11-97AD%20ASIC%20consults%20on%20market%20integrity%20rules%20for%20the%20FEX%20market?opendocument


Exchanges in Asia: Trends and perspectives
Australian Securities and Investments Commission
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Speech-Exchanges-in-Asia-IOMA-IOCA-Tony-DAloisio-20110504.pdf/$file/Speech-Exchanges-in-Asia-IOMA-IOCA-Tony-DAloisio-20110504.pdf
*** 27 pages.


PLATFORMS

BATS SCORECARD: UPTIME HIGH, MARGINS TIGHT. CHI-X? A RETAINED DEFICIT.
The S-1 Registration Statement filed Friday by BATS Global Markets to commence its bid to raise as much as $100 million from public investors gives the first glimpse of its financial footing, as it tries to build a business worldwide that lives up to its name
• Principal shareholders. Holders of 5% stakes in BATS include Citgroup Financial Products, Credit Suisse First Boston Next Fund, DB Investment Partners, GETCO Strategic Investments, LabMorgan Investment Corporation, Lime Brokerage Holdings, Lehman Brothers Holdings, ML IBK Positions. Strategic Invesmtnets I and Tradebot Ventures Fund
http://www.securitiestechnologymonitor.com/news/bats-global-markets-uptime-high-margins-low-27925-1.html?ET=securitiesindustry:e2507:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051411

CHI-X EUROPE POSTS RISING TRADING STATS; PARTNERS RUSSELL INVESTMENTS ON INDICES
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38762

CHI-X REVOLVING DOOR SPITS OUT CFO O'KEEFE
The revolving door is spinning again at Chi-X Europe as chief financial officer Kevin O'Keefe confirms his intention to depart the European MTF in the wake of its recent take-over by Bats Global Markets.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22480

LSE LOOKS LIKE FACING COMPETITION FOR TMX FROM BANK-BACKED ALPHA ATS With Canadian banks looking for ways to block TMX Group's merger with the London Stock Exchange (LSE), traders have begun betting on the proposal being trumped, according to Bloomberg.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22529

LSE's Rolet says exchange mergers could unify regulation
London Stock Exchange CEO Xavier Rolet said the consolidation wave hitting the exchange sector could harmonise global trading regulations. "If you look at the existing exchange mergers, including the trans-Atlantic mergers, there's not a unified regulatory environment," Rolet said. "This is the greatest opportunity the financial crisis has presented -- to unify regulation." He also scrutinised European policymakers for their treatment of equities as opposed to bonds. Reuters (10 May.), Global Financial Strategy (11 May.)

LONDON STOCK EXCHANGE UPBEAT AS PROFITS RISE; FILES WITH CANADIAN PROVINCES FOR TMX MERGER
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39203

TMX SOLA PLATFORM GOES LIVE AT TURQUOISE
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39202

ALPHA ATS AIMS FOR Q4 LISTINGS LAUNCH
Canadian alternative trading system (ATS) operator Alpha Group expects to become an exchange by Q4 2011 and aims to challenge the listings dominance of the TMX Group, following its regulatory filing last month.
http://www.thetradenews.com/asset-classes/equities/6151

MAPLE CONSORTIUM LAUNCHES TMX BID
A consortium of Canadian banks and pension funds have made a C$3.6 billion offer for TMX Group in a bid to scupper the exchange operator's planned merger with London's LSE.
The Maple members are understood to be Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Caisse de Depot et Placement du Quebec, Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan, Alberta Investment Management and Fonds de Solidarite des Travailleurs du Quebec.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22555


Bonds.com, Inc. (Bonds.com) is a new model for the trading of fixed income instruments in small size. The management team is working to anticipate industry developments and is working to provide innovative approaches to the trading of fixed income securities. To date these approaches have resulted in a neutral electronic platform to access liquidity and live orders; the opportunity for price discovery and negotiation; and a reduction in the time, labor, and cost of execution across a range of asset classes all of which trade large volumes in small size.
http://www.bonds.com/



CLEARING

LCH.CLEARNET AND X-CLEAR GET FSA APPROVAL FOR INTEROPERABILITY
European clearing house interoperability has moved a step nearer after the UK's FSA approved new arrangements between LCH.Clearnet and Switzerland's X-Clear.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22548


DEUTSCHE BANK'S JONATHAN HITCHON ELECTED TO DTCC BOARD
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39073

EUROPEAN OTC MARKET FAR SMALLER THAN CLAIMED - STUDY Around 16% of European share trading is over-the-counter (OTC), far less than claimed by stock exchanges, according to a study from the Association for Financial Markets in Europe (Afme).
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22489

IMPACT REPORT: THE COST OF OPERATIONAL FAILURE
Failure to settle trades on time are rare and on average amount to less than one percent of a firm’s trading volume. But each fix can cost as as much as $1,000 per transaction.
The challenges -- and what to do about them -- are in this analysis by Securities Technology Monitor in its latest Impact Report. The focus: operational risks.
http://www.securitiestechnologymonitor.com/reports/22_14/-27809-1.html
*** 35 pages



CORPORATES, CREDIT AND SEFS
Dodd-Frank will directly or indirectly affect nearly every segment of the capital markets. In the fixed income arena, OTC derivative regulation, such as clearing and execution requirements, will have a profound impact on counterparty risk management and trading. Its impact will extend to the cash credit markets and will serve as the catalyst for increasingly electronic and centralized trading. This will be most apparent in the corporate bond market, where we should see tighter spreads, increased volume, and deeper liquidity. Corporate trading will likely mirror that of CDSs and migrate to platforms that allow a more flexible execution protocol than exists in the current two-tiered market structure.
http://www.woodbineassociates.com/uploads/Woodbine_Opinion_-_Corporates_Credit_and_SEFs_-_March_30_2011.pdf


PARTICIPANTS

PENSON'S STOCK PLUMMETS AFTER DISCLOSURE OF ILLIQUID RECEIVABLES
The stock of Penson Worldwide tumbled after it disclosed it had $97.4 million of "nonaccruable receivables."
Of that amount, about $42.6 million is collateralized by bonds issued by Retama Development Corp and related interests. Retama Development Corp. owns the Retama Park racetrack in Selma, Texas near San Antonio.
Penson, the only publicly traded and non-bank owned clearing firm, cited the non-accruals under the category of risk factors in its quarterly filing with the Securities and Exchange Commission on May 9. Penson, whose stock trades on the NASDAQ Stock Market, closed at $3.12 a share, down 81 cents or 20.61 percent on Thursday
http://www.securitiestechnologymonitor.com/news/-27911-1.html?ET=securitiesindustry:e2503:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051211

OTHER

DUMPING CHEQUES COULD "SPELL DISASTER" FOR UK CHARITIES Plans by Britain's banks to abolish cheques by 2018 could "spell disaster" for many of the country's charities, according to the Institute of Fundraising.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22527

...and then the days start getting longer.
WooHoo!

WINTER SOLSTICE (SOUTHERN HEMISPHERE) - EDUCATION NETWORK ...
24 Mar 2011 ... On the day of Winter Solstice, Earth's south pole is tilted away from the Sun. ... Start Date: 22 June 2011. End Date: 22 June 2011. Duration: 1day ... Coverage: Australia. Region: All Australian states. Language: en ...
http://www.edna.edu.au/edna/go/events/cache/offonce;jsessionid=51273830EB6EFB737E319FB9B5474684?nbpath=1981,601834&action=item&keywords=&from-display=&from=&until-display=&until=&location=All%20Australian%20states§or=&calendar=all

Eurovision (interactive)
http://www.spiegel.de/flash/flash-25968.html#ref=nlint

News: CXA License, Aussie players, Asian Dance Cards, LME, CDS games

G'day All,

Well, the big news locally, apart from the budget, is that Chi-X Australia has a license. This is now up on the ASIC web site and for any interested parties worth a look.
Aussie also makes all the local broker market shares available and these have been released too. Although the concentration of business amongst the top 10 brokers is dominant, there are some interesting moves within the Top 10.

Asia merger mania not really flying high. The model in Asia still very much appears to be the 'dance card' approach. Line up all you partners as in ASEAN. What the Euronext combination showed us was that to have true integration the ownership model needed to be common. JV's are great, but common ownership delivers common purpose. That said, LCH.Clearnet common ownership was a bit 'different'.

MarketPrizm and Colt finish their dancing with a date.
Amazing moves in Swedish market shares.
Great to see TOM market data being more widely disseminated.
EC snoops around the 'c' word...cartel.
Oxera publishes another lovely report...but I just can't get excited by it, or have much faith in it.
I mean these guys are 'experts' and they come out with sweeping generalisations like this...since trading and clearing and settlement services are generally charged on per-transaction basis,” read the report.

Ahhh, so much going on. Just enjoy it!

Warm regards,

Scott.





PLATFORMS ASIA

CHI-X GRANTED OPERATING LICENSE IN AUSTRALIA
Australia's government on Wednesday finally gave a full-operating license to Chi-X, paving the way to erode the trading monopoly held by the the Australian Stock Exchange.
http://www.securitiestechnologymonitor.com/news/-27807-1.html?ET=securitiesindustry:e2484:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__050411

The CXA licence grant with the remaining conditions is now up on the ASIC web site.
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Chi-X-licence.pdf/$file/Chi-X-licence.pdf

Also attached from the ASIC web site is the link to Reg Guide 223.
Reg 233.105 (page 32) outlines a 12 months grace period that users have where ASX is considered ‘the’ venue of best execution.
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/RG223-published-29-April-2011.pdf/$file/RG223-published-29-April-2011.pdf

AUSTRALIAN MARKET SHARES
Year-to-date, the top three rankings remain unchanged for 2011: UBS takes the top spot, with total trading volume of $113.3 billion or 12.7 per cent of market share, followed by Citigroup at $98.1 billion (11 per cent) and Deutsche Bank at $77.9 billion (8.7 per cent).
Macquarie is fourth for the year, with a cumulative total of $70.9 billion (8 per cent), while Goldman Sachs is fifth at $66.8 billion (7.5 per cent), and Credit Suisse takes sixth place at $61.6 billion (6.9 per cent).
Rounding out the rankings are Morgan Stanley at $56.1 billion (6.3 per cent), Commonwealth at $44.5 billion (5 per cent), JPMorgan at $39.6 billion (4.4 per cent), Merrill Lynch at $37.3 billion (4.2 per cent) and RBS at $27.8 billion (3.1 per cent).
AUSTRALIAN FINANCIAL REVIEW: UBS Leads Brokers as Exchange Rate Crimps Volumes

LIMITS ON DARK TRADES INEVITABLE: ASIC
(FINANCIAL MARKETS) Regulator to consult on dark pool order thresholds.
In the meantime, it has put in place the market rule to place a minimum threshold for dark pool trades but has set this to a dollar value of zero. This will allow ASIC to respond quickly if there is a visible deterioration in the lit markets following the introduction of market competition.
http://www.businessspectator.com.au/bs.nsf/Article/Australia-regulator-ASIC-limits-on-dark-pool-tradi-GK9BK?OpenDocument&src=eiw&ir=3


SGX CFO MOVES
The exchange’s CFO, Kwong, is leaving SGX to take up a new role as executive vice president and general manager, global markets and global services (Asia Pacific) with custodian State Street Bank and Trust. His last day of service at SGX will be 10 June 2011. Kwong will be replaced in the interim as the acting CFO by Muthukrishnan Ramaswami, co-president of SGX.
Market commentators have noted that SGX’s investment cycle is to reach a peak this summer, with capital expenditure on the back of its REACH technology programme, Chi-East, and OTC derivatives clearing programme reaching S$65 million (US$52.5 million) at the end of the financial year in June 2011
http://www.thetradenews.com/trading-venues/exchanges/6110


SINGAPORE MERCANTILE EXCHANGE CEO QUITS
Thomas McMahon, CEO of the Singapore Mercantile Exchange (SMX), resgined last Friday.
http://www.asiaetrading.com/singapore-mercantile-exchange-ceo-quits/

SINGAPORE EXCHANGE IS READY TO DISCUSS OTHER MERGER IDEAS
Muthukrishnan Ramaswami, president of Singapore Exchange, said the bourse is interested in discussing other mergers after being spurned by Australian regulators. "If Hong Kong came to us and said, 'Shall we merge?', we wouldn't say no at all," Ramaswami said. "Hong Kong would bring us size. We have no problem being a junior partner. But it would be all about the detail." He said SGX is concentrating on expanding derivatives clearing, developing collaborative agreements and increasing company listings. Bloomberg (02 May.)

INDIAN EXCHANGE SEEKS COLLABORATION RATHER THAN MERGER
Ravi Narain, CEO of National Stock Exchange of India, said the bourse is interested in collaborating rather than merging with other exchanges to bolster growth. "We are busy focusing on internal organic growth," Narain said. "Broader alliances outside India work well for us. The moment you do a merger with one exchange, you lock out all other exchanges. We are more interested in looking at product-by-product alliances to see what are the gaps and needs in the Indian financial firmament that we can fill." The exchange is working to launch derivatives that would be based on the FTSE 100 Index and denominated in the rupee. Bloomberg (05 May.)


JSE: BALANCING THE ORDER BOOK
Leanne Parsons, chief operating officer at Johannesburg Stock Exchange (JSE), says that competitive pressures on an exchange don’t necessarily force it to choose between long-only buy-side and high-frequency trading (HFT) firms. It is possible to take a new approach.
The JSE has been reducing trading fees over the last three years, she adds, despite some resistance from shareholders. The firm’s strategy is that by proving more cost effective it will attract greater trading volumes. The JSE saw turnover grow by 63% to €24.6 billion in Q1 2011 from €15.1 billion in Q1 2010.
“When you start out, it’s revenue negative, but then volumes improve and it becomes revenue positive - that's been proven true every time we have made a fee adjustment,” she says
http://www.thetradenews.com/node/6052

GREEN LIGHT FOR HK COMMODITIES VENUE
The first product to trade on the exchange will be a one kilo gold futures contract offered in US dollars with physical delivery in Hong Kong.
The exchange is expected to roll out a series of standardised products which will either be physically or financially settled, covering precious and base metals, energy, agriculture and commodity indices.
All transactions on HKMEx will be cleared through London-based LCH.Clearnet, the central counterparty serving several international exchanges
http://www.thetradenews.com/regions/asia/6104



PLATFORMS

NIEDERAUER SHOULD REPLACE BLANKFEIN AT GOLDMAN, SHAREHOLDER SUGGESTS
The woman who never hesitates to speak her mind at the most public of annual shareholder meetings Thursday suggested that NYSE Euronext CEO Duncan Niederauer would make a good replacement for Lloyd Blankfein at the helm of Goldman Sachs Group.
NYSE Euronext chairman Jan-Michiel Hessels:
60% of the company is German, that's not entirely true. Based on the present market caps, the exchange ratio is 60:40. But in the governance, in the management structure, there is much more of a balanced situation with a very international Board, a very international management committee. And don't forget, at this time, about 60% or 65% of the total shares are owned by non-German investors. How will that develop? We don't know. But in the end, (it) is the shareholders, according to Dutch law, -- and this will be a Dutch company -- who decide who is in the Board and who is CEO.
http://www.securitiestechnologymonitor.com/news/-27756-1.html?pg=2

ICE FIRST QUARTER NET INCOME JUMPS
ICE's ability to transform acquisitions into opportunities for future growth has been a defining characteristic of ICE and a major point of distinction in the exchange sector
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39020

ALTERNATIVES VENUES TAKING MAJORITY OF SWEDISH MARKET SHARE
Burgundy reported its market share in Swedish equities continued to decline, reaching 3.44% in April on a turnover of SEK27 billion (€3.01 billion), down from SEK 29 billion (€3.23 billion) 3.73% in March and 4.32% in February.
According to figures published by Burgundy in cooperation with Thomson Reuters, incumbent exchange group Nasdaq OMX Nordic accounted for 35.95% of trading in Swedish stocks in April, worth €29 billion, compared to 50.31% (€37.8 billion) in March.
http://www.thetradenews.com/trading-venues/mtfs-ecns/6122


TOM MTF MARKET DATA INCLUDED IN THOMSON REUTERS EUROPEAN REAL-TIME FEEDS
http://www.automatedtrader.net/headlines/76062/reuters-includes-tom-market-data


ERIS EXCHANGE PICKS CHIP DEMPSEY AS WINNER OF PLATFORM NAME CONTEST FOR "ERIS SWAPBOOK"
Eris Exchange has selected Chip Dempsey as the winner of its naming contest for its trading platform to be deployed on May 18, 2011. Dempsey's entry of "Eris SwapBook" (TM) is being used as the name of the exchange's central limit order book and RFQ trading platform. For his effort, Dempsey will be presented with an Apple iPad 2. The exchange also thanks Joe Meissner for his support in the matter.
An explanation of how Eris SwapBook (TM) plays into the Eris Exchange strategy can be found at http://www.erisfutures.com/contest-results

DIRECT EDGE CONNECTS TO 7 MAJOR DARK POOLS
Direct Edge said it connected its high-speed multivenue trading network to include seven major dark pools.
The operator of the EDGA and EDGX national stock exchanges said it had begun providing access to Barclays Capital's LX, Credit Suisse Crossfinder, Getco Execution Services, Goldman Sachs SIGMA X, Knight Link, Knight Match, and LeveL ATS.
Direct Edge is owned by a consortium that includes the International Securities Exchange, Knight Capital Group, Inc., Citadel Derivatives Group, The Goldman Sachs Group and JPMorgan Chase.
http://www.securitiestechnologymonitor.com/news/-27768-1.html?ET=securitiesindustry:e2475:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_050211

INSTINET TO SELL MAJORITY STAKE IN MARKETPRIZM TO COLT
Telecoms firm Colt has agreed to buy a majority stake in trading technology company MarketPrizm, with current owner Instinet maintaining a minority interest.
Current CEO John Lowrey will continue to provide "strategic oversight" and be a member of the MarketPrizm board.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22513

CHI-X CANADA REPORTS RECORD DAILY VOLUME
Canadian alternative trading system (ATS) Chi-X Canada, a subsidiary of alternative trading venue operator Chi-X Global, traded 71,731,700 shares, more than 10% of total Toronto Stock Exchange listed share volume on 27 April 2011, according to the firm’s own figures.
http://www.thetradenews.com/trading-venues/mtfs-ecns/6119

OMEGA ATS ELIMINATES SUBSCRIBER FEES
Omega ATS, the low cost alternative trading system for Canadian exchange-listed equities and fixed income instruments, today announced changes to its standard pricing and subscriber model
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39021


An unregulated market for Facebook takes off Facebook has become in recent months, one of the hottest shares traded on a market. Yet given that it is unlisted and an initial public offering (IPO) is not expected until 2012 at the earliest, how is this managed? The answer is that there is an exciting, and unregulated market. A pioneering approach to share dealing is taking off in the US, with the prospect of it expanding worldwide by plugging a significant hole in currently available facilities.
http://www.edhec-risk.com/latest_news/featured_analysis/RISKArticle.2011-04-26.2231?newsletter=yes


CLEARING

EC LAUNCHES ANTITRUST PROBE INTO CDS MARKET
The world's biggest investment banks are being investigated in two European Commission antitrust probes into the credit default swaps (CDS) market.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22505
Meanwhile, a second case against nine of the banks and ICE Clear Europe will investigate whether the preferential tariffs granted by the clearer have the effect of locking them in the ICE system to the detriment of competitors.
The banks involved are Bank of America Corporation, Barclays, Citigroup, Crédit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley and UBS.

ICE LINK CONNECTS TO CME CLEARING FOR CDS
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38986

CCP Paper
BoE on CCP for securities Lending
http://www.bankofengland.co.uk/markets/gilts/ccpcslm.pdf?utm_source=Central+Counterparty+White+Paper&utm_campaign=5c063e8687-Central+Counterparty+Update+End+April+2011&utm_medium=email

LME PROPOSAL FOR SELF-CLEARING JOLTS LCH.CLEARNET
The London Metal Exchange has announced proposals to consider building its own clearing house, jolting its current supplier LCH.Clearnet.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22510

BASEL III PROPOSAL PUTS PRESSURE ON CENTRAL COUNTERPARTIES
Rules have bolstered the position of central counterparties, but a proposal from the Basel Committee on Banking Supervision could hinder their business model. The panel suggested that banks acknowledge risks associated with reinvested collateral. "We understand the ability of the CCP to invest, or to rehypothecate, the collateral is commercially desirable for the CCP," said Mark White, chairman of the risk-modeling group at the Basel Committee. "We are not trying to remove a profitable line of business from a CCP -- we are trying to reflect the risk for the bank posting the collateral." FinancialCAD (03 May.), Risk.net/Risk magazine (subscription required) (03 May.)

EU MOVES TOWARD EXEMPTIONS FOR DERIVATIVES CLEARING
EU leaders continue to debate legislation to bolster oversight of the derivatives market, but a consensus has emerged in regard to clearing. The European Council appears to be leaning toward exempting most companies and some foreign exchange instruments from derivatives clearing. Companies that use derivatives to hedge risk will not be required to send trades through central counterparties, a source said. MarketWatch (21 Apr.), FinancialCAD (21 Apr.)


EUROCLEAR BANK AND CLEARSTREAM DEVELOP INTERNATIONAL SECURITIES INDUSTRY FRAMEWORK
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39001


DTCC EXPLORES HOW TO LIMIT LIQUIDITY RISK
Thomas Sakaris, vice president at the Depository Trust & Clearing Corp., said the company is looking into a new process called CNS for Value to reduce the liquidity risk when a company defaults. "This initiative [CNS for Value] is designed to mitigate the systemic risk associated with the potentially unlimited liquidity demands on [National Securities Clearing Corp.] in the event of a large default," Sakaris said at SIFMA's Operations Conference. Securities Technology Monitor (5/3)


POLICY

OXERA ON BEHALF OF THE EUROPEAN COMMISSION (EC),
Monitoring prices, costs and volumes of trading and post-trading services
HTTP://WWW.OXERA.COM/CMSDOCUMENTS/OXERA%20REPORT%20ON%20TRADING%20AND%20POST-TRADING%20MAY%202011.PDF

During the period studied, Oxera found that the average size of an equity trade fell by 60%, from €25,000 in 2006 to €10,000 in 2009. Across Europe’s major financial centres, the decline in trade size ranged from 46% to 80%.
One trade order (as seen from the fund manager’s perspective) today requires more trading and post-trade transactions than it did in 2006, potentially increasing investors’ cost per value of trade, since trading and clearing and settlement services are generally charged on per-transaction basis,” read the report.
HTTP://WWW.THETRADENEWS.COM/TRADING-EXECUTION/6127


EUROPEAN PARLIAMENT COMMITTEE ISSUES OPINION ON OTC DERIVATIVES REGULATION
The European Parliament’s Committee on Industry, Research and Energy issued an opinion on the proposal for a regulation of the European Parliament and of the Council on over-the-counter (OTC) derivatives, central counterparties and trade repositories. While recognizing the importance of regulations of financial instruments and coordination with the major international partners is an important process in the post-crisis period, it noted that any regulation should be attributed in a “carefully measured dose” so as not to include other end-users. The suggested amendments: make some definitions clearer; facilitate some procedures; help avoiding clearing shocks and other disproportionate burdens to the businesses; suggest the cancellation of the information threshold, considering that the clearing threshold provides sufficient assurance; introduce more coherent and transparent criteria, related to regulatory decisions; make clear the procedures when classifying and declassifying OTC derivatives and counterparties as eligible for clearing.
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-456.881+04+DOC+PDF+V0//EN&language=EN

SIFMA OPS 2011: 100 STOCKS A DAY TRIP CIRCUIT BREAKER
BOCA RATON, Fla. -- The first anniversary of the Flash Crash is three days away. And since that huge bungee jump in stock prices, where the Dow Jones Industrial Average dropped nearly 1,000 points before bouncing back in the same afternoon, what's happened?
Lots of mini-crashes, for individual stocks. According to an industry lawyer, citing statistics developed by the Securities Industry and Financial Markets Association, roughly 100 stocks are tripping the "circuit breakers" established by the Securities and Exchange Commission. Every day.
In February, the fewest times the breakers were tripped in one day was 56. The most? Nearly 300 -- 276, actually -- in the wake of Japan's earthquake and tsunami, according to Kevin J. Campion, a partner with Sidley Austin LLP, at the 38th Operations Conference of the Securities Industry and Financial Markets Association.
http://www.securitiestechnologymonitor.com/news/100-stocks-a-day-break-circuit-27781-1.html?ET=securitiesindustry:e2480:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_050311

TABB FORUM: WHAT’S CHANGED SINCE THE FLASH CRASH?
By Sal Arnuk, Joseph Saluzzi and R.T. Leuchtkafer
05/02/11
Again, we come to those 18 words: “Even in the absence of extraordinary market events, limit order books can quickly empty and prices can crash.” This paradigm was unthinkable except to a tiny circle of critics before the Flash Crash and totally unthinkable just a decade ago. Those words tell how profoundly stock markets have changed, and how exchanges now manage their brands, technology platforms and government licenses, but can’t control their own order books.
Can the Flash Crash happen again? Yes it can. It happens almost every day in individual stocks and ETFs. Our markets will continue to remain vulnerable as long as we as an industry remain in denial of the fact that volume does not equal liquidity, and as long as we tolerate the for-profit exchange model, which places its revenues from encouraging speed above all other concerns and safety
http://www.tabbforum.com/opinions/what's-changed-since-the-flash-crash


PARTICIPANTS

ABN AMRO CLEARING SIGNS FOR TCS BαNCS TECHNOLOGY
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38978

EUROPEAN MULTILATERAL CLEARING FACILITY (EMCF) ENGAGES GREENLINE FOR MAGNIFIX®
Business Wire
CHICAGO--(BUSINESS WIRE)--Greenline Financial Technologies, Inc., a leading provider of electronic trading marketplace solutions, today announced that the central counterparty (CCP) clearing provider European Multilateral Clearing Facility N.V. (EMCF) has selected MagniFIX® to monitor its FIX-based clearing infrastructure. EMCF delivers CCP services in 19 European markets for 7 multilateral ...
http://www.businesswire.com/news/home/20110428005539/en/European-Multilateral-Clearing-Facility-EMCF-Engages-Greenline

Asian Markets, changing markets, CCP RFP, Mexican Hat Dance (swaps one foot in, one foot out), Weddings

G'day All,

Some old news to post before we get into this weeks stories. More on the Chi-X Australia market licence on Friday.

I totally agree with this report and its conclusions.
(extract below)

Instinet Report On Microstructure Impact Of Extending Trading Hours
Lunch breaks on several Asia-Pacific exchanges are getting shorter or going away altogether, resulting in a longer overall trading day in Japan, Hong Kong and Singapore...
http://www.asiaetrading.com/instinet-report-on-the-market-microstructure-impact-of-extending-trading-hours-in-asia/

I think other important factors are:
• Wallet Size (Commercial opportunity).
• Regionalisation (Irrespective of common market ‘conditions’ Asia is made up of vast distances, e.g. a ‘local hop’ like s’pore to HK is 3hrs).
• Regulatory reticence (if it’s not broken, why fix it?)
• Sovereignty (there is still an air of national interest mentality)
• Legislative framework (legal framework to recognise and enable competition)
• Market advocacy (practitioner engagement and commitment)


Factors impacting Asia’s 4 main markets: Japan, Hong Kong, Australia and Singapore:

That said, constraints to the continued growth of trading in Japan include:
• Rigorous PTS license requirements, which impede the growth of competition.
• Little on shore trading due to onerous regulatory requirements.
• Reluctance of domestic investment to supporting alternative liquidity venues.
• Lack of recognition of Commission Sharing Agreements (CSAs) by the Japan FSA. As a result, execution cannot be rewarded to the same extent it is in other markets, thereby constraining the penetration of electronic trading.
• Under the Tender Offer Bid rules, a person or entity using an “off market” venue to acquire more than five percent of a listed company’s voting shares from more than 10 shareholders within a period of 60 days must submit a formal takeover or tender offer to the company’s shareholders. If the trade is done on the TSE, the aquiring entity only needs to file a major shareholding report. This effectively limits the trading of stocks by PTSes to less than five percent of a company’s outstanding shares over a 60 day period.

Factors Impacting Volume Growth on the Hong Kong Exchange:
• Lack of Competition: Most of the constraints listed below follow from this point. Without true competition – for both execution and clearing – the HKEx is not incentivized to build a low latency infrastructure, lower fees or create an efficient market structure.
• High Clearing Costs: At 12 basis points (10 bps stamp duty plus 2 bps HKEx clearing fee), total clearing costs are much higher in Hong Kong than in other markets, generally making short-term trading difficult if not prohibitive. With only a single central clearing counterparty in Hong Kong, there is no competition for clearing and thus no downward pressure on fees. Additionally, unlike in the UK, there is no stamp duty exemption for market makers.
• Infrastructure: Compared to other exchanges of its size, the HKEx has low capacity, high latency and a slow market data feed.
• Fees: Monthly fees charged by the exchange are based on incremental order throughput over a standard throttle rate, thereby providing a disincentive to placing orders and trades.
• Retail Heavy: Retail investors – who tend to have longer time horizons and trade in lower volumes than institutions – comprise a larger portion of the overall participant base in Hong Kong than in most other markets.
• Inefficient: For example, opening auction market orders only match if there are two or more corresponding matched orders. A single order will not match.
• No Closing Auction: The HKEx eliminated its closing auction in March 2009. The closing price is now determined based on the median of five nominal prices in last minute of trading. As a result, the close can be chaotic and illiquid.
• Lack of Anonymity: Orders and trades on the HKEx are identified by broker.

Factors Impacting Volume Growth on the Australia Securities Exchange
While Australia already has a continuous trading day, the ASX has recently added new order types, announced a new infrastructure build and plans to launch a new market – PureMatch – later this year. All of these moves are generally intended to attract new trading participants and support electronic and high frequency trading, with Chi-X Australia* set to launch by the end of the year. Australia is a prime example of the prospect of competition spurring the development of trading infrastructure.

Factors Impacting Volume Growth on the Singapore Exchange
• Lack of Competition: Similar to Hong Kong, there is little reason for the SGX to build a low latency infrastructure when they are the only game in town.
• High Clearing Costs: Clearing costs of four basis points, with a maximum charge of SGD600 (approximately USD475) per trade, are paid by the investor, not the broker. This is extremely expensive relative to other developed markets; for example, the cost of clearing in Japan is JPY75 per trade (less than 1USD). It should be noted that the SGX has lobbied the Monetary Authority to lower these costs.
• Infrastructure: In June 2010, SGX announced that it had partnered with Nasdaq OMX to develop a new trading platform – SGX Reach – powered by NASDAQ OMX’s Genium INET. The release is scheduled for 2011. Given Genium’s position as one of the fastest trading engines globally, this release will obviously greatly improve the latency, capacity and scalability of the SGX platform. That being said, the ASX rolled out this technology late last year and has had recent stability issues.

From Beijing to (flight time) …..
Singapore: 5 hours 30 minutes
Mumbai: 5 hours, 55 minutes
Dubai: 7 hours, 16 minutes
London: 10 hours, 8 minutes
Sydney: 11 hours, 5 minutes
Los Angeles: 12 hours, 32 minutes
New York: 13 hours, 41 minutes
HK to...
S’pore: 3H12
Sydney: 9H8
http://www.travelmath.com/flight-time/




PLATFORMS (Asia)

ASEAN ALGOS A DIFFERENT GAME
The gradual adoption of electronic trading by exchanges in Malaysia, Indonesia, Thailand and the Philippines presents specific challenges for brokers in the construction of algorithmic trading platforms suited to the four ASEAN markets.
http://www.thetradenews.com/trading-execution/algorithmic-trading/6103

ASEAN EXCHANGES
Bali, 8 April 2011 – A collaboration of seven stock exchanges in ASEAN was today formalised with the launch of ASEAN Brand Identity, ASEAN Exchanges website and ASEAN Stars, as part of the collaboration of ASEAN Exchanges – a catalyst to promote the growth of the ASEAN capital market with the intent of bringing more ASEAN investment opportunities to more people. The ASEAN Exchanges collaboration members are Bursa Malaysia, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, The Philippine Stock Exchange Inc., Singapore Exchange and The Stock Exchange of Thailand.
http://www.aseanexchanges.org

SGX VOLUMES
5 April 2011 – Singapore Exchange (SGX) today said its derivatives daily average volume reached an all-time high in March while securities and clearing activities grew from a year earlier.
http://www.sgx.com/wps/wcm/connect/cp_en/site/press_room/news_releases/sgx+derivatives+volume+at+all-time+high+in+march?presentationtemplate=design_lib/PT_Printer_Friendly

LCH.CLEARNET SET TO CLEAR FOR FEX
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38560

INSTINET REPORT ON MICROSTRUCTURE IMPACT OF EXTENDING TRADING HOURS
Lunch breaks on several Asia-Pacific exchanges are getting shorter or going away altogether, resulting in a longer overall trading day in Japan, Hong Kong and Singapore...
http://www.asiaetrading.com/instinet-report-on-the-market-microstructure-impact-of-extending-trading-hours-in-asia/


TSE TO EXPLORE OVERSEAS ALLIANCES AS IT PLANS THREE-YEAR Y25.9 BILLION TECH SPEND The Tokyo Stock Exchange plans to spend Y25.9 billion on its overall systems infrastructure over the next three years, as it bids to build its user base and attract liquidity in the face of increasing domestic and overseas competition.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22404




PLATFORMS

LSE CONTINUES TO LOSE MARKET SHARE DESPITE IMPROVEMENTS
For the first time in its 210 years, the London Stock Exchange is on the verge of handling less than half of UK share trading, according to data from Thomson Reuters. In February, the LSE's main UK order book, Sets, migrated to faster technology, in part to attract high-frequency traders. Sets' UK market share was slightly more than 50% in recent months but dropped to 49% this month. Reuters (27 Apr.)
*** The LSE noted trading on Turquoise was not reflected in the data.
"These figures compare just our lit service with other operators' lit and dark markets. On a like for like basis, over 60 percent of lit trading in UK equities takes place on our Sets order book," a spokesman said.
UK share trading netted the LSE 101.8 million pounds in the year to the end of March 2010, accounting for 16.2 percent of total income

EX-CEO REPORTEDLY PLANS TO SUE TURQUOISE IN ADDITION TO LSE
Financial News Online (U.K.) (subscription required) (26 Apr.)

NASDAQ OMX TALKING TO FIRMS OVER LOSSES CAUSED BY SOFTWARE GLITCH - WSJ
Nasdaq OMX is negotiating with trading firms over payouts for losses incurred by a glitch with one of the bourse's algorithms earlier this week, according to the Wall Street Journal.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22502

NASDAQ OMX AND ICE SEND LETTER TO NYSE EURONEXT SHAREHOLDERS
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38924

IN SLOWING MARKET, E-TRADING SYSTEMS CAPTURE FX TRADING SHARE
Tuesday, April 19, 2011 Stamford, CT USA — For nearly a decade, trends in electronic foreign exchange have been consistent: increasing use, growing trading volumes and an expanding electronic share of the global FX pie.
http://www.greenwich.com/WMA/in_the_news/news_details/1,1637,1954,00.html?vgnvisitor=eKiVnp6Mops=
FARNHAM TAKES OVER AS TURQUOISE CEO
LSE majority-owned Turquoise has shuffled its management team, with chief executive David Lester becoming chairman, replaced by chief operating officer Adrian Farnham.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22451

INTERNATIONAL SECURITIES EXCHANGE LAUNCHES NEW TRADING SYSTEM
The new system relies on Deutsche Börse Group's Optimise trading architecture. That is the core, proprietary global trading architecture of Deutsche Börse Group, which is in the midst of attempting to merge with NYSE Euronext.
http://www.securitiestechnologymonitor.com/news/ise-trading-system-27541-1.html?ET=securitiesindustry:e2430:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__041111

QATAR EXCHANGE CHOOSES CINNOBER FOR MARKET SURVEILLANCE
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38641

BATS TO BECOME LISTINGS VENUE, CHALLENGING NYSE AND NASDAQ
http://www.advancedtrading.com/articles/229400483?cid=nl_at_daily

FINANCIAL TIMES: CHI-X EUROPE TO USE RUSSELL FOR DERIVATIVES PUSH
By Philip Stafford 03/28/11
Chi-X Europe, Europe’s second largest share trading venue by volume, has signed a deal to create new regional indices with Russell Investments, owner of the Russell market indices, as part of its move into the derivatives market.
The methodology provided by Russell and market data from Chi-X will form the basis of Chi-X’s move into derivatives and focus on the most liquid and largest stocks in Europe. Ownership of an index allows exchanges to spin off new derivatives contracts based on them - as Eurex does with the Stoxx index run by a company it owns. Chi-X will list futures and options at a later date.
The venture will also act as a springboard to the European market for Seattle-based Russell, which is better known in the US and accounts for $3,900bn in assets.




CLEARING

CFTC PROPOSES RULE TO PROTECT MARGIN OF SWAPS USERS
The Commodity Futures Trading Commission proposed a rule under which clearinghouses "would have recourse against the collateral of defaulting customers, but not against the collateral of non-defaulting customers" should a futures broker and its customers collapse. BlackRock has supported the approach, as it would protect swaps users from "fellow customer risk." Bloomberg (4/27)


LCH.CLEARNET WORKS WITH TRADING PLATFORM GALAXY
LCH.Clearnet Group said it will start clearing European corporate-bond trades on Galaxy, a multilateral trading facility from TradingScreen. "We have worked closely with Galaxy to enhance transparency and certainty in the euro-denominated bonds markets, in line with regulators' aims to reduce systemic risk by bringing more over-the-counter products into clearing," said Christophe Hemon, CEO of LCH.Clearnet Securities Technology Monitor (27 Apr.)
EUROPEAN COMMISSION SAYS ITS TIME TO ADAPT TO T+2
It’s not when but if and how. The subject: Two-day settlement of transactions in a fund portfolio. The place: Europe. If the European Commission has its way, countries in the European Union could be forced to meet a two-day settlement cycle by 2013 at the latest.
http://www.securitiestechnologymonitor.com/news/-27531-1.html?ET=securitiesindustry:e2424:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__040811
SOR PUTS CLEARING INTEROPERABILITY ON SEBI AGENDA
Buy-side customers have told Deutsche Bank, one of less than a dozen brokers so far approved to offer SOR, that their post-trade fees may be as high as US$150 per single-stock transaction. “If they smart order route any trade worth less than around US$1 million, it’s likely they will negate any improvement from smart order routing with the increase in clearing costs,”
Both the NSE and BSE are vertically integrated exchanges that own stakes in both clearing and settlement facilities. Competition and interoperability already exists between Central Depository Services (India), the central securities depository partly owned by the BSE, and National Securities Depository, in which NSE has a stake, but there are no similar arrangements between the BSE's Bank of India Shareholding and the NSE's National Securities Clearing Corporation.
http://www.thetradenews.com/trading-execution/smart-order-routing/5993

PLATFORM LAUNCHED FOR MONITORING MARGIN CALLS
AcadiaSoft, which developed a platform which electronically monitors margin calls in over-the-counter derivatives, made its launch official on Monday, listing Barclays Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and State Street as users.
http://www.securitiestechnologymonitor.com/news/-27539-1.html?ET=securitiesindustry:e2430:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__041111
MACHINE-READABLE OTC DERIVATIVES CONTRACTS MOVE A STEP CLOSER
Regulatory efforts to introduce more automation in manually-driven over-the-counter derivatives trading have been advanced by the publication of new research into the feasibility of rendering OTC documentation in machine-readable format.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22457

29 page report available here:
http://www.cftc.gov/ucm/groups/public/@swaps/documents/file/dfstudy_algo_040711.pdf

CENTRAL CLEARING FOR OTC DERIVATIVES 'UNLIKELY TO REDUCE SYSTEMIC RISK' - IMF PAPER Regulatory moves to force OTC derivative trades to go through central counterparties could just shift systemic risks to these CCPs and lead to more tax payer bailouts, according to a working paper published by the IMF.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22421

23 page report available here:
http://www.imf.org/external/pubs/cat/longres.aspx?sk=24726


ISDA ISSUES RFP FOR COMMODITY DERIVATIVES TRADE REPOSITORY The International Swaps and Derivatives Association (ISDA) is calling for the creation of a commodity OTC derivatives trade repository by January.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22405

RFP available at:
http://www.isda.org/index.html




POLICY

US REGULATORS DEFINE SWAPS: WHAT'S IN, WHAT'S OUT?
Transactions that are swaps include foreign exchange swaps and forwards, foreign currency options, commodity options, cross-currency swaps, and forward rate agreements, among others.
The SEC voted unanimously to put the definitions out for public comment. The CFTC was still holding its meeting.
http://www.wallstreetandtech.com/articles/229402336?cid=nl_wallstreettech_daily

FLASH CRASHES, SACRED COWS AND DOING THE RIGHT THING
By Larry Tabb
Industry pressures to forgo preferencing restrictions and trade-at rules will be intense, even if the new rules are the right prescription for staving off another flash crash.
http://www.wallstreetandtech.com/articles/229401009?cid=nl_wallstreettech_daily

FSA STAFFERS LEAVE IN DROVES AS CHANGES LOOM
The UK Financial Services Authority lost 352 employees in the past 12 months, up from 181 the previous year. The exodus comes as the regulator prepares to split. By 2013, a supervisory division of the FSA will move to the Bank of England, and a separate agency focused on consumers will be developed. The departures raise concerns about the agency's ability to make a smooth transition. The Independent (London) (25 Apr.)
*** The transition won’t be smooth. With or without these people.

EUROPEAN EXCHANGES HIT OUT AT BROKER NETWORKS Europe's exchanges have hit out at plans to create a new type of trading venue category as part of MiFID's overhaul, warning the proposal will cause an "irreversible race to the bottom" for regulation.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22453

FSB RELEASES UPDATE FOLLOWING APRIL MEETING
The Financial Stability Board (FSB) met in Rome to discuss its work agenda ahead of the April 14 Finance Ministers meeting in Washington, D.C. The FSB emphasized the need to decisively press ahead with the “repair and strengthening” of weak banking systems, using the forthcoming rounds of stress tests to address any weak points identified. They also agreed to an accelerated “timetable and processes, including public consultation,” to deliver the G-SIFI recommendations to the G20 Summit in November. With regard to the OTC derivatives markets, the FSB welcomed recent International Organization of Securities Commissions’ (IOSCO) reports, requested further analysis on the current market use of multi- or single-dealer platforms, and announced it will take “next steps” on commodities markets in September.
http://www.financialstabilityboard.org/press/pr_110405.pdf

IMF WORLD ECONOMIC OUTLOOK
Real GDP in advanced economies and emerging and developing economies is expected to expand by about 2½ percent and 6½ percent, respectively
http://www.imf.org/external/pubs/ft/survey/so/2011/RES041111A.htm

SEC CONFIRMS CIRCUIT BREAKER EXTENSION WITH LIMIT UP/LIMIT DOWN PROPOSAL
If approved by the SEC, the new limit up/limit down mechanism would replace the existing single stock circuit breakers, which were approved 16 June 2010 on a pilot basis shortly after the ‘flash crash’ of 6 May.
http://www.thetradenews.com/regions/americas/5997

SPEECH BY SEC CHAIRMAN: REMARKS AT SIFMA’S COMPLIANCE AND LEGAL SOCIETY ANNUAL SEMINAR
CHAIRMAN MARY L. SCHAPIRO
http://www.sec.gov/news/speech/2011/spch032311mls.htm

Right now, one of the biggest items on our agenda is translating our portion of the Dodd-Frank Act into more than 100 individual rules.
A comprehensive approach to enterprise risk management is important for several reasons. For example, inattention to risk management can lead to seemingly minor corner-cutting on compliance issues which eventually snowballs into a serious problem for management and investors.
And, without a commitment to good governance and risk management, silos can form and the interdependence between risk categories can be overlooked. What seems to be a manageable credit risk and a separate manageable liquidity risk may combine to do real damage.
Going forward, our examiners intend to focus on understanding how risk management is embedded in key business processes and decision-making at a number of levels.

ALAN GREENSPAN
Dodd-Frank may ruin us all
The Dodd-Frank Act risks creating the largest regulatory-induced market distortion since 1971 by failing to grasp the rise of global interconnectedness of the financial system.
http://www.businessspectator.com.au/bs.nsf/Article/Greenspan-Federal-Reserve-Bernanke-QE2-pd20110330-FETT5?OpenDocument&src=pmm

ISDA: SEF RULES SHOULD PROVIDE GREATER CHOICE, ACCESS AND LIQUIDITY TO OTC DERIVATIVES MARKET PARTICIPANTS
This paper discusses important issues associated with mandating the use of swap execution facilities (SEFs) for executing certain OTC derivatives products. It asserts that such mandates should be structured in a way that preserves the OTC derivatives market's strengths while addressing its weaknesses, presents a set of desirable SEF characteristics to meet this objective and identifies relatively modest infrastructure and transparency benefits that SEFs might bring. The paper also analyzes the proposed rules of the CFTC and the SEC required by the Dodd-Frank Act (DFA) and makes recommendations to improve, in particular, the CFTC
proposals in a manner consistent with a reasonable reading of DFA.
http://www.isda.org/



PARTICIPANTS

BNP PARIBAS OPENS INDIAN CLEARING AND CUSTODY SERVICE
Clearing fees in the country have been the source of some debate. The primary market in India, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are vertically integrated exchanges that own stakes in both clearing and settlement facilities.
Although competition and interoperability has been arranged between the central securities depositories the Central Depository Services (India), which is partly owned by the BSE, and National Securities Depository, which the NSE has a stake in, there are no similar arrangements between the BSE's Bank of India Shareholding and the NSE's National Securities Clearing Corporation.
http://www.thetradenews.com/regions/asia/6078

TIBRA TARGETS DERIVATIVES MISPRICING POST-TAX
Trading firm Tibra Capital has provided a new twist on the tax-aware Australian equity fund as the first product for its relaunched investment management division.
Tibra Investment Management has drawn on its parent’s experience in derivatives trading and risk-management to launch a fund – simply the Tibra Australian Equity Fund - it claimed can exploit a glaring inefficiency in the way equity derivatives were priced.
http://www.investmenttechnology.com.au/index.php?option=com_content&view=article&id=13120%20&Itemid=50

NORTHERN TRUST TO BUY OMNIUM
Northern Trust has agreed to buy Omnium LLC, the fund administration business of Citadel
http://www.assetservicingtimes.com/assetservicesnews/article.php?article_id=2301




STUFF

US TREASURY PREPARES TO RETIRE CHEQUES
The US Treasury is embarking on a publicity campaign ahead of its upcoming move to switch off paper cheques as a payment method for social security and other federal benefits in favour of electronic methods.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22497
*** People currently receiving their federal benefits by cheque will have to switch to direct deposit by 1 March, 2013.

NEW ZEALAND TO SELL USED FIGHTER JETS
The government of New Zealand is hoping to raise some cash by auctioning off eight decommissioned fighter jets. The aircraft, which date from the 1960s, have been in storage since the country shut down its air force in 2001. The highest bidders will also receive spare parts and ground equipment for their planes. The Wall Street Journal (tiered subscription model)/Scene Asia blog (4/25)

THE ANTI-PREDICTOR: A CHAT WITH MATHEMATICAL SOCIOLOGIST DUNCAN WATTS
The Yahoo! Labs scientist and author explains why the "law of the few" is bunk, why history is full of failed hedgehogs, and why we can't make good predictions about just those things we most want to predict
http://www.scientificamerican.com/article.cfm?id=duncan-watts-book


REDS SPIRIT
McKenzie does know something about culture. A positive winning culture. Twenty-four hours after the Rebels' Rod Macqueen described his team as a ''coach's nightmare'' when they lost their way against the Highlanders, the Reds were having the time of their lives making fun of the Bulls. The happiness of the Australian conference leaders was infectious. It is so clear they are unified and playing for each other.
And which Australian province has the lowest salary bill? The Reds
http://www.smh.com.au/rugby-union/union-news/heres-a-real-sidesplitter-how-do-you-spell-culture-in-melbourne-cash-20110417-1djqw.html#ixzz1JpuAdjxv

Given the emergence of rich talent under Robbie Deans over the past few years the Reds' win in itself shouldn't come as a complete surprise, but its methodical nature will give Wallabies fans justified reason to believe that this is their year
http://www.smh.com.au/rugby-union/union-news/paint-your-bandwagon-red-queensland-can-help-wallabies-kickon-to-world-cup-success-20110411-1db6g.html
*** I’m still a Deans believer.

CLIMATE SPECTATOR: All set to catch the next energy wave
Giles ParkinsonAustralia's first commercial size wave energy machine has been deployed off the coast of Perth. And its developers have some surprising cost predictions. 20 Apr 2011 10:16 AM
http://www.climatespectator.com.au/commentary/all-set-catch-next-energy-wave

Schoolchildren in Tokyo wear headgear on their way to school on Monday to help protect them from possible falling debris during earthquakes. Some schools in Tokyo have asked students to wear the headgear when walking to and from school since the deadly earthquake and tsunami on March 11
http://www.spiegel.de/international/0,1518,758912,00.html#ref=nlint

Australia gets into the royal wedding spirit. A new sausage...the “Little Willie” will grace Aussie BBQ’s...
http://www.qt.com.au/story/2011/03/17/barneys-snags-fit-for-a-king-to-be-prince-ipswich/