Wednesday, February 23, 2011

News 110218: Market Caps in merger mania, we are a sunburnt country, G20 / G7....Magic Malabar



http://online.wsj.com/article/SB10001424052748704409004576145992472922806.html



Well what a flurry of activity. Hardly time to read email let alone cut and paste into the blog.

The picture on market capitalisations I liked. It really helped put into perspective some of the perceptions we have of exchange size.

The thought of the ASX, a 2 trillion a year market, having the same market cap as a merged LSE TMX just doesn’t sound right.


Of course with all the deals, decoupling sovereignty from business will be the issue.


I think Australia will watch NYSE / DB for a lead.


All the mergers do create a ‘momentum’ for consolidation, and I thought that Aussie political sentiment would swing to be more pro ASX /SGX merger. Apparently not. Even with a trading halt this week to announce ‘tweaks’ to the governance arrangements of the deal. If it was a one party political decision I think they’d get it over the line. With a teetering coalition in place, it remains any ones guess.


I was also surprised to see the Chi-X Europe / BATS merger accurately reported in the local Sydney press....along with speculation of an ICE / Nasdaq deal.


I do like the commodity play of LSE. Add to TMX the Mongolian deal and Millennium as the platform (for consolidation) in Sth Africa and a real strategy starts to take place. (They’re still too weak in Clearing).


Did a little looking into the G20. Interesting that neither Singapore or HK, so often associated with Asia are not amongst the Asian members although Korea is.


A little rant of disaster hit Australia. What did they ever expect....


Dorothea Mackellar (1885 - 1968)

Yes, born over 100 years ago wrote:


I love a sunburnt country,
A land of sweeping plains,
Of ragged mountain ranges,
Of droughts and flooding rains….


Core of my heart, my country!
Land of the Rainbow Gold,
For flood and fire and famine,
She pays us back threefold-
Over the thirsty paddocks,

http://www.imagesaustralia.com/mycountry.htm


…I think there is a good chance that drought, fire, famine, floods might just be a trend.


Insurance bills to rise

Mathew Murphy and Paolo Hooke 3:00AM

Australians will pay higher insurance premiums if the recent spate of natural disasters becomes a trend.

http://www.smh.com.au/business/insurance-premiums-likely-to-rise-as-spate-of-disasters-take-their-toll-20110206-1aii3.html


Suncorp chief executive Patrick Snowball????

Mr Snowball said the challenge would involve considering the impact of global warming and what could be done to mitigate risk.

It’s true! Mr Snowball is worried about Global Warming. Real name! He’s there on the executive management!

http://www.suncorpgroup.com.au/phoenix.zhtml?c=144033&p=irol-govmanage


Off to the Malabar Magic this week-end. Little disappointed they have changed the course from a journey swim to Little Harbour just down the coast, to a simple in and out. Sydney’s longbay jail is just around the corner.

http://www.rainbowclubaust.com.au/oceanswim/course.htm


Last week was the North Bondi Classic….(which is the same beach as Bondi)

http://www.oceanswims.com/Events.asp?EventID=95


And into the 6 nations:

Congrats to England, Ireland and France. Predictable on paper results.

Last week I wrote...: England (yep), Wales (yep) and France (yep!) (after Irelands slow start and an ascendant France).

Next round leaves the only hard decision...what the hell, France to win at Twickenham. (the match that calls the series).

So who will win the 6 Nations? A France repeat is my guess.

Simply based on the fact that Johnson’s roses did not punish Australia when they had the chance.


The bewildering Super15 also starts on Feb 18.

Apparently only Aussies link the new format draw which is based on a whole new format.

Explanation here: http://www.superxv.com/format/


Fixtures here:

http://www.superxv.com/fixtures/

and

http://www.smh.com.au/rugby-union/super-rugby/fixtures


Meanwhile, closer to home our own team efforts & ranking (just 1 spot away from the top 10)

http://www.intrinsicsports.com.au/dyn_cts.asp?comp=737

and

http://www.intrinsicsports.com.au/dyn_mvp.asp?comp=737


Gotta go.

School reception.


Have a great week-end all.


S

http://clearingandsettlement.blogspot.com/




Platforms


NYSE Takeover Faces Touchy Issues
Big Board and German Exchange Announce Deal; Holding Company's Name to Be Determined
http://online.wsj.com/article/SB10001424052748704409004576145992472922806.html





US exchange BATS to buy Chi-X Europe


On Thursday, Fox Business Network reported of a "possible partnership" between the tech-rich Nasdaq and the IntercontinentalExchange (ICE), specialised in raw materials and derivatives.


Fox said the discussions had reached "a critical stage" and that Nasdaq had hired Bank of America "to look at possible deals."


Spokespersons for ICE and Nasdaq, contacted by AFP, refused to comment on the report.


http://www.smh.com.au/business/markets/us-exchange-bats-to-buy-chix-europe-20110218-1ayi6.html



TURQUOISE TAKES ON NYSE EURONEXT WITH PRICE PROMOTION London Stock Exchange-owned MTF Turquoise has made a play for Nyse Euronext business with a six month pricing promotion on stocks listed on its rival.


Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22241



LSE SIGNS JOHANNESBURG EXCHANGE TO MILLENNIUMIT The Johannesburg Stock Exchange has licensed the MillenniumIT technology platform from the LSE as it bids to cut transaction times and attract high-frequency traders.


Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22238



LSE AND TMX AGREE MERGER; HIGHLIGHT TECHNOLOGY POTENTIAL


The London Stock Exchange (LSE) has agreed an all share "merger of equals" with Canada's TMX Group, creating a global superpower that will have a strong technology emphasis.


More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22250



CORVIL OFFERS LATENCY MONITORING FOR MILLENNIUM EXCHANGE


http://www.finextra.com/news/announcement.aspx?pressreleaseid=37930




NYSE.EN InfoFlash: Postponement of implementation of adjusted FESE tick size table 4 for Dutch and French blue-chip stocks


The implementation of the adjusted tick size table for securities in trading groups 01 and J0, initially planned for 7 February 2011, is postponed pending regulatory approval.


http://www.euronext.com/fic/000/062/342/623420.pdf



NYSE.EN InfoFlash: Launch of a Supplemental Liquidity Provider programme on European blue chips


NYSE Euronext will introduce a Supplemental Liquidity Provider (SLP) programme on European blue chips listed on its Regulated Cash Markets from 1 March 2011.


http://www.euronext.com/fic/000/061/925/619255.pdf




EUROPEAN EXCHANGES UP THEIR GAME IN FACE OF DARK POOL COMPETITION - ITG European stock exchanges have become more efficient and slashed the cost of trading over the last year as they bid to fight off growing competition from a rash of post-MiFID dark pool and MTF competitors, according to research from ITG.


Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22234


Full report: http://www.finextra.com/finextra-downloads/newsdocs/ITGATSsinEurope.pdf



MiFID II Response Brings to Light New Research on Dark Pools


http://www.itg.com/2011/02/01/mifid-ii-response-brings-to-light-new-research-on-atss/



Direct Edge Adds BATS' Y Exchange as Low-Cost Destination


Direct Edge said it is adding the BATS Global Markets Y Exchange as a low-cost destination for trades its systems handle. The operator of the EDGA and EDGX exchanges also said it is including the Y Exchange in a new low-fee strategy for routing orders, after its own books are checked


http://www.securitiestechnologymonitor.com/news/direct-edge-bats-y-exchange-26973-1.html?ET=securitiesindustry:e2281:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__020711



VEGA-CHI MTF GETS £1.6M OCTOPUS INVESTMENT Investment management firm Octopus has invested £1.6 million in Vega-Chi, an electronic trading platform dedicated to European convertible and high-yield bonds.


Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22278







Platforms Asia




The ASX acid test


Tim Sheehy Most important to the ASX's integrity is the provision of a fair, informed market where prices reflect information. The question, then, is whether the new deal with the Singapore Exchange would provide this.18 Feb 2011 9:55 AMread more


http://www.businessspectator.com.au/bs.nsf/Article/ASX-SGX-merger-market-integrity-national-interest-pd20110217-E64LD?OpenDocument&src=kgb



Chi-X Australia regulatory delays


Chi-X Australia Pty, which has received “in principle” government approval for a license and planned to begin operating by March, says it’s now unable to give a specific start date until the Australian Securities & Investments Commission publishes a timetable for the implementation of a new competition framework enabling rivals such as Chi-X to compete with ASX.


http://www.bloomberg.com/news/2011-02-06/chi-x-australia-s-start-date-uncertain-as-regulatory-timetable-is-delayed.html



ASX Group Monthly Activity Report – January 2011


Total cash market traded value was $85.6 billion in January 2011, down 3% on the pcp, with a daily average value of $4.5 billion, also down 3% on the pcp.


http://www.asxgroup.com.au/media/Monthly_Activity_Report_Jan_2011_FINAL.pdf



Updates: ASX/SGX Polish Deal, AXA AP’s Last Report?


We had some news and movement yesterday in the two big financial services deals afoot in Australia: the proposed takeover of the ASX by the Singapore Stock Exchange


Interestingly the statement revealed that a couple of new products were being planned. They are:


"An Australian dollar interest rate swaps clearing facility for over-the-counter financial products - this will support the growth of Australia’s capital markets by strengthening links with global OTC markets and reduce systemic risks and costs to market users;


"A passport listings service - initially available for the top 200 stocks, this will enable streamlined admission arrangements for SGX issuers to join ASX (and vice versa) to expand their Australian and Asian investor base and improve their access to capital;


"Mutual offset arrangements – to enable holders of ASX and SGX derivatives positions to consolidate their exposures and reduce their costs."


http://www.aireview.com.au/index.php?act=view&catid=8&id=12484



Greens take on SGX-ASX deal: report


(FINANCIAL MARKETS) Comments suggest deal could face stiff opposition in parliament.


Greens leader Bob Brown yesterday gave further indication that the Singapore Exchange bid for the Australian Securities Exchange Ltd may face stiff opposition from his party regardless of whether Treasurer Wayne Swan approves the controversial offer


http://www.businessspectator.com.au/bs.nsf/Article/Greens-take-on-SGX-ASX-deal-report-pd20110217-E6QX2?OpenDocument&src=eiw&ir=3



Singapore is paying a control premium for the ASX, and control is what it will get.


ASX's share price as a multiple of earnings declined from more than 25 times before the boom to about 16 times before the Singapore offer.


Singapore Exchange's price-to-earnings multiple over the same period stayed up at about 25 times as investors continued to value it as a monopoly


http://www.smh.com.au/business/singapore-is-paying-a-control-premium-for-the-asx-and-control-is-what-it-will-get-20110217-1aybu.html





G20



Whats up G7 /G20



G7 / G20. I think Martin Wolf of the FT sums it up nicely:


What the crisis has accelerated even more sharply is a shift in attitude towards the west and the US, in particular. As Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, has noted, Asians no longer respect the west’s competence, battered as it has been by military misadventure and then financial mishap. Along with the changing attitudes has come changing responsibility. The shift from the G7 and G8 to the G20, at the peak of the crisis, symbolised that transformation. This would have happened anyway. But it happened far faster, as a direct result of the crisis.


Welcome to our economic future.


Martin Wolf, Financial Times


http://www.businessspectator.com.au/bs.nsf/Article/How-the-crisis-catapulted-us-into-the-future-pd20110202-DP3Y6?OpenDocument&src=srch




Who is in the G20?


France is very honored to chair the Group of Twenty in 2011.


The G20 was established in 1999, in the wake of the 1997 Asian Financial Crisis, to bring together major advanced and emerging economies to stabilize the global financial market.


http://www.g20.org/



Where is Dodd-Frank in Asia?


All Asian markets can be looked at in terms of Policy and Commercial responses:


Policy is “observe, wait and see”


Commercial is “prepare and see”



WASHINGTON - Republicans escalated their push to delay and defund the Dodd-Frank Wall Street reforms on Thursday as top regulators warned the US Senate Banking Committee of a staff and funding crunch


http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-1-Dodd-Frank-battle-headlines-US-Senate-ban-E6LLK?OpenDocument




The G20: (6 Asian Members)








































Country


Policy


Commercial


G20: Australia


wait & see


No mandatory CCP


G20: China


wait & see


?


G20: India


wait & see


?


G20: Indonesia


wait & see


?


G20: Japan


wait & see


Establishing OTC CCP


G20: Republic of Korea


wait & see


?


HK


wait & see


Establishing OTC CCP


Singapore


wait & see


OTC CCP: AsiaClear



RBA, ASIC and APRA did a joint study of OTC clearing in May 09.


http://www.rba.gov.au/payments-system/clearing-settlement/survey-otc-deriv-mkts/sotcdma-052009.pdf



SEBI constitutes Committee for review of structure of market infrastructure institutions


http://www.sebi.gov.in/Index.jsp?contentDisp=AboutSEBI



Outline of OTC Derivatives Clearing Operations and Relevant Issues


http://www.jscc.co.jp/en/news/2010/5/Outline%20of%20OTC%20Derivatives%20Clearing%20Operations%20and%20Relevant%20Issues.pdf



Korean Financial Market Stability


http://www.fsc.go.kr/eng/roadahead/sub02/sub0202_02.jsp



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


http://www.sfc.hk/sfcPressRelease/EN/sfcOpenDocServlet?docno=10PR145



AsiaClear complements Singapore’s global standing as a market for trading of interest rate derivatives and Foreign Exchange (FX) with counterparty and operational risk mitigation benefits.


http://www.sgx.com/wps/portal/marketplace/mp-en/products/asiaclear




Policy



Treasury unveils new financial services watchdog


http://www.bbc.co.uk/news/business-12495112




Participants



HIGH FREQUENCY TRADING


A Deutsche Bank Research briefing which aims to shed light on who the players in HFT are, which strategies they pursue and whether their impact on market quality is beneficial.


http://www.finextra.com/fullfeature.asp?id=1404




Just Arrived: “At-Trade” Analysis of Transaction Costs


By Chris Kentouris


The Transaction Auditing Group said it has upgraded its software to allow for fund managers and broker dealers to integrate the post-trade analysis of their execution performance with their pre-trade strategies.


“We will be providing our customers with the ability to link the post-trade analysis with their pre-trade measurements immediately,” says David Shapiro, executive vice president of the New York-based transaction cost analysis firm in an interview with Securities Technology Monitor on Tuesday.


While broker-dealers are the main providers of TCA tools, fund managers are turning to third party suppliers such as TAG who they feel can offer more independent and granular metrics. Among those firms are Investment Technology Group (ITG) Quantitative Services Group; Pipeline Trading Systems and SJ Levinson and Sons.


http://www.securitiestechnologymonitor.com/news/pretrade-transactional-cost-analysis-26992-1.html?ET=securitiesindustry:e2283:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_020811


*** I can see we are going to need some definition of terms on what we mean by “post trade” costs.




Stuff



*You cant beat the spirit of these north Queenslanders*



I just got off the phone with a friend living in northern Queensland, which is bearing the full brunt of Cyclone Yasi.


He said that since early this morning the flood has been nearly waist high and rain is still belting down.


The temperature is soaring and the wind has increased to near gale force.


His wife has done nothing for hours but look straight through the kitchen window, and just stare.


He says that if it gets much worse he may have to let her in!





Scott Riley


Business Development




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


Wednesday, February 9, 2011

News 110204: Hop into it, a blog, a renege, NYPC, SEC SEF differs from CFTC, OTC Tabb...the Big Swim and the Great Race.


Kung Hei Fat Choi (Happy New Year of the Rabbit)

Well, Hop to it, wishing you a Happy New Year of the Rabbit, 新年快乐

I did enjoy the story of “The Great Race”

‘Andrews Blog’ story on Chi-X corporate developments is….intriguing and I guess explains a lot about ‘worst kept secrets’.

BATs at 10.8% of US market share and Chi-X Europe 20-25% market share makes a formidable combination.

I just can’t fathom why Euronext, would renege on the gentlemen’s agreement on tick sizes. If they think this is anything to do with market quality the very least they could do is publish their findings and reasoning. I guess it is this sort of behaviour that generates the goodwill that Chi-X and BATS thrive on.

Sorry, I find the prospect of ‘cyber attacks’ on the LSE, motivated by spite, to postpone Millennium ludicrous. I’ll await the published police report and findings. Why would you even feed such a comment to the press / public domain?

Chi-X Japan continues to gain traction.

Approval of NY Portfolio Clearing marks another step in the continuing change of the CCP landscape. It also adds more weight to the changes taking place in Europe.

I’m surprised that there are still strong pockets of political resistance to interoperability.

Plenty of reading on OTC clearing. The TABB study, available from the WFE looks interesting.

http://www.world-exchanges.org/files/statistics/excel/V08-030%20Global%20Risk%20Transfer%20Market.pdf

SEC comes out with SEF fact sheet.

The Big Swim was great.

I got mashed at the start in the mêlée with all the other ‘boofheads’ but once out in the open water I actually got my breath back once I settled into a rhythm. With these things I prefer to go wide and deep to avoid the chop around the headland. This time I went just a bit too wide and deep and the water safety had to redirect me back to the coast. Ooops. (note to self, keep land mass in sight during ocean swim).

There were no stingers and no sharks on duty so all one could do was paddle along and enjoy the seas. I even managed to catch a wave in which is a lovely way to power home. Still, much room for improvement: 1,033 out of a field of 1,615.

Good report and some piccies here: http://www.oceanswims.com/default2.asp?active_page_id=265

You can have a free copy of my certificate here: http://www.thebigswim.org.au/?page=results

…and this week-end I get to do chores because I’m not taking part in the ‘Cole Classic’ because it’s commercial and not in the best interests of Surf Life Saving Australia:

http://www.oceanswims.blogspot.com/

Good advice in cyclone season:….. 'Don't panic if your roof lifts off'….

How Yasi compares around the world

SPECIAL: See how Yasi is so large and ferocious it would spell ruin for large parts of the planet if it was attacking other countries.

http://www.news.com.au/breaking-news/floodrelief/how-cyclone-yasi-compares-around-the-world/story-fn7ik2te-1225998762870

Qld floods: Compare their size

Enjoy the Chinese New Year….and I think I’ll heed my own advice!

Great week-end all,

S

http://clearingandsettlement.blogspot.com/

Chinese New Year

On the days before the New Year celebration Chinese families give their home a thorough cleaning. There is a Cantonese saying "Wash away the dirt on ninyabaat" (年廿八,洗邋遢), but the practice is not usually restricted on nin'ya'baat (年廿八, the 28th day of month 12). It is believed the cleaning sweeps away the bad luck of the preceding year and makes their homes ready for good luck. Brooms and dust pans are put away on the first day so that the newly arrived good luck cannot be swept away. Some people give their homes, doors and window-frames a new coat of red paint. Purchasing new clothing, shoes, and receiving a hair-cut also symbolize a fresh start.

http://en.wikipedia.org/wiki/Chinese_New_Year#Public_holiday

The Great Race

Once upon a time, the Jade Emperor thought it'd be better to assign an animal to each year so people could more easily remember the Zodiac cycle. So he decided to hold a meeting with all the animals and he would choose 12 of them to be the Zodiac animals. At that time, Cat and Rat were close friends. They were very excited about the meeting and decided to go early. However, Cat was a sleepyhead. He hardly ever woke up before noon. On the night before the meeting, he asked Rat to wake him early the next morning. When morning came, Rat got up early and quietly left for the meeting alone. When Cat finally woke up in afternoon, he knew it was too late. Feeling betrayed, he vowed that henceforth Rat would be his enemy. That is probably the main reason Cats are always chasing after Rats.

Another folk story tells that Cat and Rat were the worst swimmers in the animal kingdom. Although they were poor swimmers, they were both quite intelligent. To get to the meeting called by the Jade Emperor, they had to cross a river to reach the meeting place. The Jade Emperor had also decreed that the years on the calendar would be named for each animal as they arrived to the meeting. Cat and rat decided that the best and fastest way to cross the river was to hop on the back of Ox. Ox, being naïve and good-natured, agreed to carry them both across. Midway across the river, rat pushed cat into the water. Then as Ox neared the other side of the river, Rat jumped ahead and reached the shore first. So he claimed first place in the competition and the zodiac.

Following closely behind was strong Ox who was named the 2nd animal in the zodiac. After Ox, came Tiger, panting, while explaining to the Jade Emperor how difficult it was to cross the river with the heavy currents pushing it downstream all the time. But with its powerful strength, Tiger made to shore and was named the 3rd animal in the cycle.

Suddenly, from a distance came a thumping sound, and the Rabbit arrived. It explained how it crossed the river: by jumping from one stone to another in a nimble fashion. Halfway through, it almost lost the race but the Rabbit was lucky enough to grab hold of a floating log that later washed him to shore. For that, it became the 4th animal in the Zodiac cycle. Coming in 5th place was the Flying Dragon. Of course, the Jade Emperor was deeply curious as to why a swift flying creature such as the Dragon should fail to reach first place. The mighty Dragon explained that he had to stop and make rain to help all the people and creatures of the earth, and therefore he was held back. Then, on his way to the finish, he saw a little helpless Rabbit clinging onto a log so he did a good deed and gave a puff of breath to the poor creature so that it could land on the shore. The Jade Emperor was very pleased with the actions of the Dragon, and he was added into the zodiac cycle. As soon as he had done so, a galloping sound was heard, and the Horse appeared. Hidden on the Horse's hoof was the Snake, whose sudden appearance gave the Horse a fright, thus making it fall back and giving the Snake the 6th spot, while the Horse placed 7th.

Not long after that, a little distance away, the Goat, Monkey, and Rooster came to the shore. These three creatures helped each other to get to where they are. The Rooster spotted a raft, and took the other two animals with it. Together, the Goat and the Monkey cleared the weeds, tugged and pulled and finally got the raft to the shore. Because of their combined efforts, the Emperor was very pleased and promptly named the Goat as the 8th creature, the Monkey as the 9th, and the Rooster the 10th.

The 11th animal was the Dog. Although he was supposed to be the best swimmer, he could not resist the temptation to play a little longer in the river. Though his explanation for being late was because he needed a good bath after a long spell. For that, he almost didn't make it to finish line. Just as the Jade Emperor was about to call it a day, an oink and squeal was heard from a little Pig. The Pig got hungry during the race, promptly stopped for a feast and then fell asleep. After the nap, the Pig continued the race and was named the 12th animal of the zodiac cycle. The Cat finished as thirteenth place and did not make it in the zodiac.

Another folk story tells that on registration day, the Rat met up with the Ox. He thought to himself "Ox is the fastest, strongest animal!" So the little Rat played a trick on the Ox. He asked the Ox if he would like to listen to him sing. The Rat opened his mouth but said nothing. "How was that?" he asked the Ox and of course he replied "Sorry little Rat, I didn't hear you." The Rat told the Ox to let him jump onto his back so that he could sing it more clearly, and the Ox agreed. Soon without knowing, the Ox was walking to the signing post, forgetting the Rat on his back. When they reached there, the Rat jumped off and claimed first place. The Ox following and the rest.

In Buddhism, legend has it that Buddha summoned all of the animals of the earth to come before him before his departure from this earth, but only thirteen animals actually came to bid him farewell. To reward the animals who came to him, he named a year after each of them. The years were given to them in the order they had arrived.

The 12 animals for the Chinese zodiac must have been developed in the early stage of Chinese civilization for hundreds of year until it become the current edition; and it’s very hard to investigate the real origin. Most historians agree that Cat is not in the list since the 12 animals of the Chinese Zodiac were formed before Cats were introduced to China from India with Buddhism.

Another story tells that the God called the animals to a banquet that night. The Rat loved to play tricks on the Cat so he told the cat that the banquet was on the day after tomorrow. When the Cat was sleeping and dreaming about the banquet, the rest of the animals all arrived to the banquet. The order of the animals was decided by the order that they arrived. The Cat was devastated and vowed that he would always hate the Rat.

http://en.wikipedia.org/wiki/Chinese_zodiac

Platforms

Chi-X Europe & Andrews Blog.

Andrew’s Blog – Aux Temps Perdus en Fleet Street

http://www.a-teamgroup.com/article/andrews-blog-aux-temps-perdus-en-fleet-street/

PRESS RELEASE: BATS Global Markets Off to Solid Start in 2011; BATS Europe and BATS Options Continue Growth
The BATS U.S. equities exchanges, BATS BZX Exchange and BATS BYX Exchange, combined for average daily matched volume of 845.5 million shares, representing 10.4% of all U.S. cash equity share volume for the month of January. In January 2010, BATS had 10.3% of the U.S. equities market.

UK AND US EXCHANGES CALL IN SECURITY SERVICES OVER SUSPECTED CYBER-ATTACKS Stock exchanges in the UK and US have called in security services to help fend off cyber-attacks, according to the Times newspaper.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22217

Yawnnnn. As if.

Euronext sparks outrage with tick size reduction
By Jeremy Grant - Financial Times
Euronext has said it will reduce the increments by which share prices are allowed to fluctuate - so-called "tick sizes" - on Dutch and French blue chips shares from next month, breaking a truce between competing platforms agreed over a year ago to avoid such moves.
http://jlne.ws/i0AixD

ELX Announces New 9 Cent One-Tier Fee Schedule For All U.S. Treasury And Eurodollar Futures Contracts
New York, January 31, 2011– ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today a new 9 cent one-tier bundled fee schedule for market users trading all U.S. Treasury and Eurodollar futures contracts on ELX, effective February 1, 2011.
www.elxfutures.com

ELX Announces Record Volume And Market Share In U.S. Treasuries For The Month Of January
New York, Feb 1, 2011 – ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today that January was a record-setting month for its U.S. Treasury futures contracts. ELX established records in single-day total volume and market share for U.S. Treasuries, with over 100K contracts traded on January 5, 2011 and market share hitting nearly 5% on January 10.
www.elxfutures.com

Greek police trace EU 'carbon thieves' in Romania
EurActiv
The theft of pollution permits that forced the closure of the spot market in EU emissions permits last week may have originated in Romania, a Greek police official said on Saturday (29 January).
http://jlne.ws/fjXoHB

Platforms Asia

Daily Market Share: equities (turnover)dated 10 Jan 2011

cid:image007.jpg@01CBC1FA.E068A410

SGX to launch the world's fastest trading engine - SGX Reach: The Singapore Exchange Limited announced that it will be launching SGX Reach, the world's fastest trading engine, on 15 August 2011. They also announced the introduction of continuous all-day trading from 9 am to 5 pm, subject to regulatory approval.

ASX calls up the old guard to help publicity on SGX merger.

http://www.asialink.unimelb.edu.au/__data/assets/pdf_file/0008/33866/A_Critical_Decision_Maurice_Newman.pdf

(The Asia link essays are available at: http://www.asialink.unimelb.edu.au/publications/the_asialink_essays)

Press covered this story as:

ABC chairman Maurice Newman supports bourses merger

http://www.theaustralian.com.au/business/abc-chairman-maurice-newman-supports-bourses-merger/story-e6frg8zx-1225995076715

(Maurice was a former ASX chairman)

But now the fun starts with an excellent rebuttal here:

Howard government's failure set scene for ASX-Singapore debacle

http://www.theaustralian.com.au/news/opinion/howard-governments-failure-set-scene-for-asx-singapore-debacle/story-e6frg6zo-1225997079143

On the ASX 15% ownership limit:

No matter how bad ASX management - no matter how much higher its value would be under better management from a corporate raider - it is impossible for anyone to bid for it without ASX and parliamentary backing.

I am not aware of any other company in the past 100 years that has ever been singled out so effectively from takeover protection so as to deliberately destroy shareholder value. Even that symbol of Australia, the Flying Kangaroo, Qantas, was not immune from an overseas private equity bid.

…And even some nice words for LSE

Newman and the ASX and Access Economics have painted a grim picture of doom and gloom for ASX shareholders and Australia if the exchange is not acquired by a foreign power. They say we will suffer a similar fate to the LSE Group after it was opened to competition in 2007 for the first time in its long history.

From the time of the Macquarie Bank offer in 2005 until March 2008, which is after the announcement of competition, the LSE outperformed the FTSE 100 index by 300 per cent, living up to the promise the board made to its shareholders.

Long-term Funding Secured for Proposed ASX-SGX Combination

Commitments for long-term financing facilities for the proposed ASX-SGX combination announced on 25 October 2010 have been secured.

The funding comprises term loans of S$3.8 billion and A$750 million to be made available by well-established banks – Australia and New Zealand Banking Group Limited, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Singapore Branch, DBS Bank Ltd., Oversea-Chinese Banking Corporation Limited, United Overseas Bank Limited and National Australia Bank Limited. Australia and New Zealand Banking Group Limited has been appointed as the co-ordinator in relation to these termloans.

http://www.asiaetrading.com/long-term-funding-secured-for-proposed-asx-sgx-combination/

Chi-X Japan Posts Another Record Month
Only six months after launch, strong growth momentum continues; January value traded reaches ¥212 billion, up from ¥115 billion in December.
TOKYO – 1 February, 2011 – Chi-X Japan Limited, a wholly-owned subsidiary of alternative trading venue operator Chi-X Global Inc., today announced that January 2011 was another record month for the firm, with turnover reaching ¥211.8 billion and 367 million shares changing hands. Additionally, Chi-X Japan now has 12 trading participants actively using its low latency, state-of-the-art trading venue and has expanded its universe of stocks available for trading to 822 from five at the time of launch.

ASEAN EXCHANGES INVITE TENDERS FOR TRADING NETWORK A group of South East Asian stock exchanges have completed a technology design study and invited tenders from vendors ahead of the planned launch of a cross-border trading link by the end of the year.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22227

Cleartrade Exchange is a Singapore based regulated exchange venue, providing leading edge platform technology and market operations offering a cost-saving new service to global participants in the OTC (freight and) commodity derivatives markets.

http://www.thecleartrade.com/

SINGAPORE OTC SWAPS EXCHANGE LAUNCHES

http://www.finextra.com/news/announcement.aspx?pressreleaseid=37679

Clearing

US Regulators Approve NYSE-DTCC Clearinghouse Venture
By Jacob Bunge Of DOW JONES NEWSWIRES
U.S. futures regulators gave the go-ahead Tuesday to a new clearinghouse venture that will underlie NYSE Euronext's (NYX) planned drive into fixed-income derivatives. The Commodity Futures Trading Commission approved the New York Portfolio Clearing facility as a derivatives clearing organization, opening the way for the parent of the Big Board to challenge a key business of CME Group Inc. (CME).

http://www.automatedtrader.net/real-time-dow-jones/44141/us-regulators-approve-nyse_dtcc-clearinghouse-venture

11 members on SGX AsiaClear

The signing of UBS brings the total number of such members on SGX AsiaClear to 11, following the addition of Credit Suisse, which joined in December 2010. The other members on the platform are Barclays, Citibank, DBS Bank, Deutsche Bank, HSBC, Oversea Chinese Banking Corporation, Royal Bank of Scotland, Standard Chartered Bank and United Overseas Bank.

http://thetradenews.com/asset-classes/derivatives/5699

WFE Focus January issue: OTC markets and systemic risk

http://www.world-exchanges.org/files/focus/pdf/focus_january%202011_white.pdf

The Global Risk Transfer Market: Developments in OTC and Exchange-Traded Derivatives

A TABB Group Study

“The Global Risk Transfer Market: Developments in OTC and Exchange-Traded Derivatives,” is the work of the TABB Group, a financial markets research and advisory firm. The study was commissioned by the WFE to provide a detailed and unprecedented comparative analysis of OTC and exchange-traded derivative markets with a focus on market size, trade costs and the anticipated impacts of current regulatory reforms.

http://www.world-exchanges.org/files/statistics/excel/V08-030%20Global%20Risk%20Transfer%20Market.pdf

German lawmaker calls for a delay in "interoperability"
The European Commission has proposed linking clearinghouses to reduce fees and provide investors with more choices. The framework for "interoperability" would begin with share trades and later possibly involve derivatives. Werner Langen, a German lawmaker, voiced concerns and suggested delaying the plans. "If interoperability is extended to all derivatives, it would simply cause another recession," Langen said. "I suggest we delete the whole shebang and ask the commission at some later stage to make a proposal on interoperability." Reuters (01 Feb.)

Toolbox Launched for OTC Derivatives Margining

Rule Financial said it has launched Margin Analytics Accelerator, a suite of tools for clearing over-the-counter (OTC) derivative products designed to help fund managers manage their collateral requirements.

http://www.securitiestechnologymonitor.com/news/otc-derivatives-margining-26910-1.html?ET=securitiesindustry:e2265:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__012811

Policy

INDUSTRY CLAMOUR OVER MIFID II PROPOSALS GROWS LOUDER The Futures and Options Association has added its voice to the growing industry clamour over 'needlessly oppressive' pending market reform proposals from the European Commission.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22235

UK Brokers to EC: Don’t Ban Execution-Only Agencies

London stockbrokers are urging the European Commission to tighten the rules surrounding execution-only brokerages, but not to ban them altogether.

The first option the EC is considering would be to clarify the definition of what products would be classified as non-complex,

The second option would be to ban execution-only services altogether.

http://www.securitiestechnologymonitor.com/news/execution-only-brokerages-united-kingdom-26919-1.html?pg=1

SEC Starts to Set Rules for Swaps Execution Facilities

The Securities and Exchange Commission Wednesday said it would start the process of setting rules for how security-based swap execution facilities will operate and how registration of such facilities will work.

http://www.securitiestechnologymonitor.com/news/sec-swaps-execution-facilities-propose-rules-26939-1.html?ET=securitiesindustry:e2272:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__020211

SEC Proposes Rules for Security-Based Swap Execution Facilities: FACT SHEET

The Commission's proposed rules:

Interpret the definition of "security-based SEFs" as set forth in Dodd-Frank.

Set out the registration requirements for security-based SEFs.

Implement the 14 core principles for security-based SEFs that the legislation outlined.

Establish the process for security-based SEFs to file rule changes and new products with the SEC.

Exempt security-based SEFs from the definition of "exchange" and from most regulation as a broker.

The Dodd-Frank Act further requires security-based SEFs to be registered with the Commission and specifies that such a registered security-based SEF, among other things, must comply with 14 core principles.

http://www.sec.gov/news/press/2011/2011-35.htm

FINANCIAL TIMES: SEC at Odds with CFTC on Swap Trade Rules
By Michael Mackenzie and Aline van Duyn
02/03/11
The Securities and Exchange Commission on Wednesday proposed rules for trading swaps that differ from those being considered by its fellow US market regulator, the Commodity Futures Trading Commission.
The SEC, whose rules were proposed after the CFTC put its rules forward in December, said a SEF for derivatives which it will regulate such as single name credit default swaps would accommodate a “request for quote”, or RFQ, system.
In effect, the SEC rule means that SEFs for single name CDS could adhere to the current market practice of an RFQ being sent to a single dealer.
That raises questions as to whether the spirit of the Dodd-Frank Act would be applied in such a case, since the financial reform legislation mandates that swap prices be streamed to many participants.
A director in credit trading at a large bank said: “The SEC is taking the right approach with respect to RFQ by allowing the client to decide what is in their best interest to get best execution. If that means all or only one, they are allowed to make that decision.”

Under proposed CFTC rules for SEFs covering interest rate swaps and credit indices, a RFQ must be sent to at least five dealers.
Some of the large derivatives dealers have said that sending a RFQ to five dealers would compromise liquidity in the swaps market, as banks would be reluctant to make a price and then have to try to hedge that trade after its details are known to four rivals.
Bank to client trades are currently executed on single dealer platforms with an RFQ function on a single quote basis.
The bank director added: “The CFTC’s rules are overly prescriptive and taking the decision out of the hands of clients.”
Others have backed the CFTC’s rules, however, saying that increased transparency will encourage more participants and increase liquidity.
The CFTC, which has traditionally had oversight over futures markets, has had its reach expand sharply after Dodd-Frank, and now has oversight over most of the privately-traded swaps market. The SEC, however, has been given oversight over “securities-based swaps”.

Study: Asian Investors Reduce Payments to Brokers

Institutional investors in Asia have reduced their commission payments to broker-dealers with smaller broker-dealers the most affected, according to a research report from Greenwich Associates.

“2010 Asia Equity Investors Study”

“More importantly, the picture remains very positive over a longer period, as the Asian commission pool has more than doubled over the past five years, making it one of the fastest growing markets in the world.”

http://www.securitiestechnologymonitor.com/news/asian-firms-cut-broker-commission-payments-26891-1.html?ET=securitiesindustry:e2267:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=SIN_DailyClose__013111

Analysis shows EU lacks powers to implement derivatives plans
An analysis prepared by lawyers for EU governments found that the EU does not have authority to implement plans that would result in more clearing of derivatives trades. Proposed rules that would allow the European Securities and Markets Authority to determine which over-the-counter derivatives would be routed through clearinghouses conflict with case law. "A power to adopt decisions of general application cannot be conferred on an agency," the lawyers said. Bloomberg (31 Jan.)

National supervisors meet to discuss OTC derivatives reforms
Representatives from nine national supervisors, including the German Federal Financial Supervisory Authority, the US Commodity Futures Trading Commission and the Japanese Financial Services Agency, met to discuss over-the-counter derivatives and reforms to the market. "As market participants begin operating in a more regulated environment, supervisors of major market participants must continue to work cooperatively and proactively to drive structural improvements, monitor emerging risks and support consistent supervisory approaches across jurisdictions," said William Dudley, president of the Federal Reserve Bank of New York. Risk.net/Risk magazine (31 Jan.)

The latest quarterly Statement on Monetary Policy has been released by the Reserve Bank of Australia today.

http://www.rba.gov.au/publications/smp/2011/feb/html/index.html

Devils Bargain.

* Money has become the economic and political wedge for profound changes in American society.

* Perhaps the most deceptive policy tool to lessen debt loads is the “negative” or exceedingly low real interest rate that central banks impose on savers and debt holders.

* Old-fashioned gilts and Treasury bonds may need to be “exorcised” from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint.

http://www.pimco.com/Pages/Devils-Bargain.aspx

MARTIN WHEATLEY JOINS FSA

http://www.finextra.com/news/announcement.aspx?pressreleaseid=37706

Participants

Goldman Sachs Automates Binding Trades of Blocks in Dark Pools

By Tom Steinert-Threlkeld

Goldman Sachs Group said Tuesday that its electronic trading business is introducing an order type that automates the process of placing binding orders of large blocks of stock in dark pools.

The "contingent order" type at first will only be executable on Goldman Sachs' Sigma X dark pool and the BIDS alternative trading system. But it will be available for any venue that adopts the order type and adheres to its rules.

The binding nature of the "contingent order" type distinguishes it, Goldman said, from "indications of interest,'' which are non-binding.

http://www.securitiestechnologymonitor.com/news/binding-orders-dark-pools-goldman-sachs-26928-1.html?ET=securitiesindustry:e2269:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_020111

GOLDMAN SACHS UNVEILS BLOCKSTRIKE BLOCK LIQUIDITY STRATEGY Goldman Sachs is introducing a feature that enables its electronic trading business customers to search for large blocks of liquidity in dark pools while still working the order using the algorithm's existing logic.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22222

Deutsche CEO to Retire in 2013: Report
TheStreet.com
NEW YORK(TheStreet) -- Deutsche Bank's CEO Josef Ackermann will not be renewing his contract in 2013. Ackermann's last contract was extended to 2013 after the bank did not appoint a suitable successor, according to Focus, a German publication. Ackerman will be 65 in 2013 and plans to retire, he told the magazine, adding that his contract would not be extended.
http://jlne.ws/hqLxos

UBS to clear OTC traded financials on Singapore Exchange
Press Release
1 February 2011 ' Singapore Exchange (SGX) welcomes UBS AG to AsiaClear as a new SGX Bank Clearing Member for the clearing of over-the-counter (OTC) traded financial derivatives.
http://jlne.ws/gcv3AE

UBS INTRODUCES CANADA-US INTERLISTED ALGO TRADING

http://www.finextra.com/news/announcement.aspx?pressreleaseid=37720

HSBC chairman says Asian banking hubs take work from UK
HSBC Holdings Chairman Douglas Flint said a shift in business is taking place from London to Hong Kong and Singapore. "There's evidence of quite noticeable growth in Singapore and Hong Kong," Flint told a UK parliamentary committee. "There are three 200,000-square-foot buildings being taken by international banks in Singapore that might have gone somewhere else." HSBC is considering moving its headquarters out of London, he said. Bloomberg (01 Feb.) , The Guardian (London) (01 Feb.)

Stuff

What it is to be an Aussie:

9. You pronounce Melbourne as "Mel-bin".

11. You believe the "l" in the word "Australia" is optional.

14. You call your best friend "a total b**d" but someone you really, truly despise is just "a bit of a b**d".

16. You're secretly proud of our killer wildlife.
18. You understand that "Wagga Wagga" can be abbreviated to "Wagga" but "Woy Woy" can't be called "Woy".

24. You still don't get why the "Labor" in "Australian Labor Party" is not spelled with a "u".

27. You believe that the more you shorten someone's name the more you like them.

29. You understand that "excuse me" can sound rude, while "scuse me" is always polite.
30. You know what it's like to swallow a fly, on occasion via your nose.
31. You understand that "you" has a plural and that it's "youse".

39. When working on a bar, you understand male customers will feel the need to offer an excuse whenever they order low-alcohol beer.
40. You get choked up with emotion by the first verse of the national anthem and then have trouble remembering the second.
41. You find yourself ignorant of nearly all the facts deemed essential in the government's new test for migrants.

A policeman in New South Wales pulled over a driver who had been weaving in and out of the traffic.

He approached the car window and said "Sir I need you to blow into this breathalyzer".

The man reached into his pocket and produced a doctor's note.

On it was written:

"This man suffers from chronic asthma.

Do not make him perform any action that may leave him short of breath".

The policeman said "Okay then I need you to come and give a blood sample"

The man produced another letter. This one said:

”This man is a haemophiliac.

Please do not cause him to bleed in any way".

So the officer said: "Right, I need a urine sample then".

The man produced a third letter from his pocket. It read:

"This man plays Test cricket for Australia; please don't take the p^ss out of him"

There's only two times in life - now and too late.

Anh Do’s father's favourite Vietnamese saying.

http://www.smh.com.au/money/investing/profile-anh-do-20110201-1abk3.html

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