Wednesday, November 2, 2011

News: Chi-X E to G, G20 GS GLB rant, Policy? can't get enough of it!, ASX-SGX-OTC-HMT, Quotes Swift Swat....LNH Spring!

RWC:

Dreadful news to report I’m afraid.

Australia was outclassed in every aspect of play against the Kiwis.

Australia now play Wales for 3rd place.

I think we could have won the Kiwi game, but on the day, on the field the players did not think clearly, or execute well under pressure.

It hurts me to say it, but the Kiwi’s deserved to win.

Aust to beat Wales

NZ to beat France

...see ya all in 2015!

Lots of visitors this week. Including the presentation of the Autotrader survey results (Tue) and the FIX conference (Thu).

I liked Paul Hilgers (Optiver) observations on the Autotrader panel. regulators are moving into trying to regulate technology, and policy setting is swaying to politicians not practitioners. Meanwhile Alex Frino wondered about what happened following the ASX / SGX deal...well Treasury published it’s consultation paper on infrastructure today.

Oh...and ISDA had a 2 day OTC conference and then there was some commodity gig on too. What is it about Sydney this week?

G20 & Capital surcharge for banks.

Yes, I believe this will come to pass, in 2016 or before, along with Basel III. The tide is against banks today, but their lobbying power and network will once again resurface. At some future juncture, this legislation will be ‘tinkered’ with, just like the Gramm-Leach-Bliley Act (GLB Act 1999) that repealed sections of Glass-Steagall Act of 1933, to re-dress the balance between regulation and the interests of Financial Services.

http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act

Lots of news from the Chi-X family. CXE clears with ACCC. Then we jump over to CXG where CXG announces syndication partners BAML, MS, GS, Getco and Quantlab. CXA gets a launch date and CXJ results.

Quote...ouch

Now, for those that like a read, how on earth are we going to get through all this policy stuff?

ASIC releases their CP on market structure issues following competition (start with Table 2)

MH Treasury has some foresight? (only 56 pages)

IOSCO joins the club...and they some MiFID mayhem.

Aussie Treasury (as mentioned above 50 pages)

ISDA make some great comments on OTC clearing issues.

And...please, nicking code, is a trend that is not too clever. Yes, I used to nick stuff from the stationary cupboard....but even a convict like me knows there is some kind of line you’re crossing when your walk out the door with more than your average USB stick can hold.

If you have any free time on Sunday pop along to...

http://www.loretonh.nsw.edu.au/auctions/SpringFair11.htm

....2 sleeps to go, I can’t wait! WooHoo.

But next weekend...the ocean swimming begins....

http://www.heronisland.com/oceanswims.aspx

...Ahhhh, lovely!

Have a great week end all.

Scott Riley

s.riley.mail@googlemail.com

http://clearingandsettlement.blogspot.com/

Platforms

CXA GETS A START DATE!

ASIC today confirmed Chi-X Australia Pty Ltd (Chi-X) has met its licence pre-conditions to commence as a provider of exchange markets in Australia and it can commence operations from 31 October 2011.

http://www.asic.gov.au/asic/asic.nsf/byHeadline/11-223AD%20ASIC%20confirms%20readiness%20for%20competition?opendocument

CHI-X JAPAN SEPTEMBER STATS

http://www.chi-x.com/resources/jp/file/monthly/CXJ%20Monthly%20Report%20September%202011.pdf

CEO backs consortia model as Chi-X Global unveils new stakeholders

Chi-X Global has confirmed that five firms have acquired minority stakes in the exchange operator and trading technology provider from agency broker Instinet, which remains its majority shareholder.

The five new investors are brokers Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley, and electronic market makers Getco and Quantlab.

http://www.thetradenews.com/trading-venues/exchanges/6913

Cohen anticipates post-trade independence for Chi-X Australia

"Right now our focus is on getting through the launch, after which we will look for new ways to lower the overall cost of trading," said Cohen. "One option might be to reassess clearing in Australia." He added that the concepts and workflows created for Chi-East's clearing model could form the basis of an Australian post-trade solution.

http://www.thetradenews.com/trading-venues/exchanges/6922

UK COMPETITION COMMISSION GIVES BATS-CHI-X MERGER PROVISIONAL APPROVAL

http://www.finextra.com/news/announcement.aspx?pressreleaseid=41571

A Look at NSE and BSE Colocation Service

Beginning in 2009 the NSE (National Stock Exchange of India) and the BSE (Bombay Stock Exchange) each established and expanded co-location facilities and services.

http://www.asiaetrading.com/a-look-at-nse-and-bse-colocation-service/

QUOTE MTF SEVERS TIES WITH SWIFT TRADE

Pan-European equity trading venue Quote MTF has severed all ties with Peter Beck, controversial CEO of the former day trading firm Swift Trade, which has run foul of global regulators for alleged market abuse.

More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23065

Policy

ASIC today released a second-phase consultation paper on equity market structure issues arising from recent and anticipated developments in Australia’s financial markets.
Consultation Paper 168 Australian equity market structure: Further proposals (CP 168) seeks views on proposed market integrity rules relating to:

· automated trading including high frequency trading;

· volatility controls for extreme price movements;

· enhanced data for supervision;

· the product scope of best execution; and

· pre-trade transparency and price formation in the market.

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp168-published-20-October-2011.pdf/$file/cp168-published-20-October-2011.pdf

This Foresight project, sponsored by Her Majesty’s Treasury, is led by the Government Office for Science under the direction of the Government’s Chief Scientific Adviser, Professor Sir John Beddington. It involves leading experts in this field and will explore how computer generated trading in financial markets might evolve in the next ten years or more, and how this will affect:

  • Financial stability;
  • Integrity of financial markets including price information and liquidity;
  • Competition;
  • Market efficiency for allocating capital;
  • Transaction costs on access to finance; and
  • Future role and location of capital markets.

http://www.bis.gov.uk/assets/bispartners/foresight/docs/computer-trading/11-1276-the-future-of-computer-trading-in-financial-markets.pdf

IOSCO publishes recommendations on market integrity

The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published its Final Report on Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and Efficiency, containing Recommendations aimed at promoting market integrity and efficiency and to mitigate the risks posed to the financial system by the latest technological developments including high frequency and algorithmic trading.

Report FR08/11 Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and Efficiency, Report of the Technical Committee of IOSCO

http://www.iosco.org/library/pubdocs/pdf/IOSCOPD361.pdf

MIFID REFORMS PUBLISHED; COMPLIANCE BILL TO HIT EUR732M IN YEAR ONE AND EUR586M PER ANNUM THEREAFTER Financial markets in Europe are set to undergo a fundamental overhaul, as the European Commission rolls out new rules and regulations covering every aspect of the trade lifecycle, from pre-and post-trade transparency, through to execution and clearing and settlement.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23079

Consultation Paper - Council of Financial Regulators: Review of Financial Market Infrastructure Regulation

The Council of Financial Regulators (the Council) has released a consultation paper on proposals to enhance the supervision of Australia’s critical financial market infrastructure.

The proposals include new powers to require certain systemically-important market infrastructure to have key aspects of their operations located in Australia and overseen by 'fit and proper' persons, as well as increased power for regulators to intervene in the event of infrastructure experiencing substantial difficulties.

http://www.treasury.gov.au/contentitem.asp?NavId=002&ContentID=2201

Australia

ISDA submission to Reserve Bank of Australia on discussion paper ‘Central Clearing of OTC Derivatives in Australia’

http://www2.isda.org/regions/asia-pacific/

G-20 leaders support capital surcharge for major banks
A proposed capital surcharge on major banks received support from Group of 20 central bankers and finance ministers. The surcharge, from 1% to 2.5%, would be phased in starting 2016, according to a communique released after a G-20 meeting. Sources said the Financial Stability Board will reveal a list of 50 systemically important financial institutions at next month's G-20 summit in Cannes, France. Reuters (15 Oct.), The Wall Street Journal (Europe) (15 Oct.)

http://www.reuters.com/article/2011/10/15/us-g20-regulation-idUSTRE79E13Z20111015

Indian Finance ministry planning to reduce STT & Stamp Duty.

Indian finance ministry is planning to reduce duties on transactions in equities and currency derivatives. It is considering a cut in the securities transaction tax (STT) as well as a reduction in stamp duty on ‘futures and options’ and currency derivatives.

http://algotradingindia.blogspot.com/

Participants

EX-CITADEL STAFFER CHARGED OVER CODE THEFT A former Citadel quantitative financial engineer has been arrested and charged in relation to the theft of trading-related computer code.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23061

Related News

31 August, 2011 Citadel gets restraining order against employee it says stole data

07 July, 2011 FBI arrests CME software engineer on code theft charges

21 March, 2011 Ex-Goldman programmer jailed for eight years over HFT code theft

23 November, 2010 Former SocGen trader found guilty of code theft

15 February, 2010 UBS algo trading code theft case dropped

12 February, 2010 Former Goldman programmer indicted over HFT code theft

14 July, 2009 UBS files code theft lawsuit

10 July, 2009 Citadel sues ex-staff for contract breach; raises code-theft spectre

No comments: