Thursday, July 19, 2012

Japan, UBS, Concentration, FSB OTC, EMIR, Lords, ESMA, Aust banking...Cricket? and C2S for happy kids.


WooHoo! I think the end of the US housing bust is worth a piccie:

END OF US HOUSING BUST

Just to keep my own mailbox tidy I try and get a blog out most weeks. Sometimes it’s just not possible. For example in March / April this year I missed a few posts due to travel and whilst I was collaborating on an internal piece for the ABN AMRO client newsletter “What’s Next”.
The April ’12 piece was on...
Trade feeds and the origins of fragmentation in clearing:
*** Note to self. I’ll re-post this “What’s Next” item as a separate blog entry.

So what else this week?
Why is Japan a hard nut to crack for fragmentation to take hold.
A flurry of UK Clearing hires going on with Euronext forging ahead with their own plans for a CCP. They’ve already given notice to LCH.
Little snippet where Rubinow, CTO of Archipelago, popped up at an NZ conference.
Reuters gives FXAll a liquidity event.
UBS MTF stealthily moves up the dark market share ranks.

Concentration of risk in Aussie clearing.
Nice status update, by region, on OTC clearing. Thx to the FSB.
Jesus, good bloke (and he is, no puns intended on this one) gets to steer T2S.

Been doing some policy work, including relooking at some of the EMIR text.
UK Lords rushed? Good lord!...and they’re such spritely chaps.
Nice piece by Lannoo of CEPS.
ESMA grows.

Some more Aussie action.
Optiver and Tibra keep the lawyers busy.
HSBC gets back into retail broking and Sony wants to give us mortgages (do we get a free flat screen?...saves rioting like the Brits I guess).
My favourite Rocky Road chocolate maker may die. Woe is me. It was the only decent chocolate available in Aust.
Many moons ago I was a cocoa grader myself in the UK. Aussie chocolate is mixed with a generous blend of sand and cement. This prevents the chocolate from melting in the shop displays. The irony is it also prevents the chocolate from melting in your mouth. Aussie dentists of course recommend you don’t eat too much chocolate...although for subtly different reasons than European dentists.

What is going on in sport?
I want Cadel to win the tour.
...and as for the cricket? OMG. That simply must be cheating. A 4-nil white wash?....it’s just not cricket.
The open air pools have closed here for the winter so I’m back to pounding the pavement preparing for the city to surf.
Apparently running 14KM’s makes you happy.
You can be happy too, by supporting kids who suffer from cancer.


UK’s Wiggins gets Cadel.

UK whitewash? Of Aust in ODIs


The 2012 Sun-Herald City2Surf, presented by Westpac for Cure Our Kids
Our mission is to improve the quality of life of children with cancer and their families by providing a range of practical support services and education resources to assist families presently confronting the challenge of children's cancer.

What makes us happy?
...Get involved in local activities!

And the only App you need for the Olympic Games:
On the eve of the Games we are also very excited to reveal more about the official App which will be available FREE for iPhone and Android shortly.

Have a great week-end all.

S




TRADING

Japan electronic trade venues seek regulatory love
But in Japan, where market reforms encouraging alternative venues were introduced as way back as 1998, they have simply failed to gain traction. That is due largely to certain restrictions that apply to the PTSs but not to stock exchanges.
One such restriction applicable only to PTSs is the 5% “takeover bid” rule, which requires buyers on these venues to make a tender offer for a company, if their stake in that company tops 5% as a result of that purchase. The rule tends to make large institutional investors nervous about placing buy orders on PTSs, particularly in stocks where they already have a stake.
PTSs also aren’t allowed to accept margin trades — leveraged transactions in which an investor borrows cash or shares to trade. The PTSs say the rule affects retail participation at their venues, given that more than 60% of individual investors in Japan engage in margin trading.
Last year, Kabu.com Securities Co., Matsui Securities and Monex Inc. all ceased their PTS operations, throwing in the towel to stop the bleeding.
Sakai said his firm currently executes about 15% of its trades at PTSs and was “very likely” to double that if restrictions such as the 5% takeover bid rule were removed. He said that while liquidity was thinner on PTSs than on the TSE, the cost savings and improved portfolio performance made it worthwhile.

NYSE EURONEXT RESTRUCTURES LONDON MANAGEMENT TEAM

NYSE EURONEXT SECURES SEC APPROVAL FOR RETAIL LIQUIDITY PROGRAMME The Securities and Exchange Commission (SEC) has given Nyse Euronext the green light to pilot a programme designed to attract retail investors from dark pools.

Building technology for high frequency trading

Data centres have become the new trading floors for stock markets, according to former New York Stock Exchange technology veteran Steve Rubinow.
Rubinow came to the company in 2005 when NYSE acquired Archipelago, a fully electronic stock exchange where he was the CTO. Archipelago had only started in 1999, but quickly became the second largest exchange in the world after NYSE.
“If you are talking about microsecond trading, you are not going to do it over a smartphone ... for security reasons,” Rubinow said.

TMX REPUTEDLY IN TALKS WITH DIRECT EDGE AS MAPLE DEAL CLEARS REGULATORY HURDLES
With national regulators giving the final nod of approval to the $3.8 billion acquisition of Canada's TMX by the Maple consortium, the soon-to-be-merged group is already looking further afield, with a mooted take-over of US electronic exchange Direct Edge under review.

SET ready to launch Cinnober technology
The Stock Exchange of Thailand (SET) and Cinnober have been involved in a major project for the Thai exchange trading infrastructure. The agreement, which was signed in June 2011, means that Cinnober will deliver several core systems to the exchange. The first phase of the project has been formally accepted by SET, and will lead to the replacement of their current trading, market data and surveillance systems within equities markets during Q3 2012. In following stages the project will also include the derivatives markets.

Thomson Reuters has agreed to acquire multi-bank electronic foreign exchange platform FX Alliance (FXall) for around $625 million in cash.

UPTIME SURVEY
Uptime Institute conducted its second annual data center industry survey in March and April 2012, collecting data on Digital Infrastructure deployment trends, procurement plans, measurement and standards practices, and other topics that impact the mission-critical data center industry. 
Please follow this link to view the survey results in The Monthly 451:

Malta Stock Exchange to use Deutsche Börse
The Malta Stock Exchange (MSE) migrated its electronic securities trading to Deutsche Börse’s Xetra trading system on Monday. Xetra trading participants can now use Deutsche Börse’s infrastructure...

UBS MTF tops dark MTF trading
"...largest in Europe last month, grabbing almost a quarter of the region’s dark trading, according to data from Thomson Reuters.
UBS MTF accounted for 24.5% of European dark MTF trading, overtaking the CXE dark book – the new name for Chi-X Europe’s former dark pool Chi-Delta following its takeover by BATS Global Markets – which had held the top position for the first five months of the year."



CLEARING

Concentration risk should be ringing warning bells
It is called concentration risk and it goes a long way to explaining why the ASX decided to push out the deadline to 2014 before retail stockbrokers have to stump up $10 million in core liquidity. At present it is $5 million, but before the GFC it was $100,000.

Third   progress   report   by   the   FSB   on   OTC   derivatives   markets   reform implementation.
*** 92 page report with good regional summaries.

EUROCLEAR PLANS 'COLLATERAL HIGHWAY'

IBERCLEAR TO STEER CSDs STEERING GROUP FOR T2S

Asian Markets Close In on Standards for OTC Derivatives Reporting

The Asian financial centers of Japan, Hong Kong and Singapore remain at the forefront of financial reform in Asia and are moving quickly to develop and implement regulatory standards for trade repositories and the reporting of over-the-counter (OTC) derivatives transactions.

http://www.dtcc.com/news/newsletters/dtcc/2012/jul/asian_markets_close_standards_otc_derivatives.php

 

DTCC CALLS ON INDUSTRY TO "FULLY DEMATERIALIZE" U.S. FINANCIAL SERVICES MARKET

White paper outlines multi-year plan to eliminate physical certificates

Paper available from via this page:
or directly here:



POLICY

EMIR FINAL TEXT

LORDS CALL FOR HALT TO "RUSHED" MIFID II REFORMS
The UK's House of Lords has urged the European Commission to call a halt to proposed changes to the Market in Financial Instruments Directive (MiFID II), labelling the reforms as "ill-thought out" and potentially damaging to the City of London.

EUROPE MOVES ON WITH THE POST-TRADE INFRASTRUCTURE
Karel Lannoo, Chief Executive of the Centre for European Policy Studies
After more than a decade of hesitation, the EU is now finally moving on to put in place a proper regulatory architecture for clearing and settlement. Following the agreement on EMIR, the EU Commission has proposed harmonized rules for CSD’s, while the European Central Bank (ECB) is moving on with its plans for a central euro-zone settlement entity. After the unfortunate bypass of the 2006 Code of Conduct, the EU will now have rules to ensure cross border provision of services, (interoperability) and competition between clearing and settlement entities in the EU. This will bring sea change in the sector, and could lead to further concentration in the sector to respond to tighter margins, as we have seen in the area of trading platforms

SHAPING THE FUTURE OF EUROPE'S FINANCIAL MARKETS
VERENA ROSS, Executive Director of ESMA
In terms of operational set-up, ESMA began life with about 35 staff from its predecessor body, the Committee of European Securities Regulators, at the beginning of 2011 but by year’s end had nearly doubled to about 70. This included the reorganisation to align the structure and the subsequent recruitment of the management tier to ensure that we had the required basis in place to support delivery of our responsibilities. We have succeeded in recruiting highly qualified candidates from varied backgrounds including government, regulatory bodies and the private sector. And we are not finished yet. By the end of this year we intend to have 100 staff on board and I would like to take this opportunity to say that we are still keen on attracting experienced candidates from as broad a range of backgrounds as possible.

Basel Committee on Banking Supervision
Consultative document
A framework for dealing with domestic systemically important banks 

...and what this means in an Australian context:

SEC VOTES FOR CONSOLIDATED AUDIT TRAIL SYSTEM
The Securities and Exchange Committee (SEC) has voted to force US exchanges and Finra to build a consolidated audit trail system to monitor and analyse trading activity.

EUROPEAN COMMISSION EXTENDS PROBE INTO THOMSON REUTERS RIC LICENSING The European Commission is consulting on fresh attempts from Thomson Reuters to shrug off a three-year antitrust probe into the licensing of Reuters Instrument Codes (RICs).



PARTICIPANTS

Optiver / Tibra

HFT strategy profiling lab launched
Australian firm First Derivatives has launched a testing lab for HFT strategies and algorithms

Test drive: HSBC online share trading

HSBC Bank Australia has made a return to the online share-trading market after an absence of about six years

Coombe in line for top slot if Sony Bank enters

Westpac banking veteran Rob Coombe has emerged as a leading contender to head the local operations of Japanese-owned Sony Bank as it considers a tilt at Australia’s $1 trillion-plus mortgage market.
DEUTSCHE BANK MAKES GTB APPOINTMENTS



STUFF

A RED HEAD RANTING.
*** I like her style.
AUSTRALIAS NATIONAL BROADBAND NETWORK (NBN)
But there is a worrying degree of ignorance or regressive thinking when it comes to the role of high-speed broadband in Australia’s future economy and society as we progress through the rest of this new Infotronics Age.
The NBN is intended to make available fast broadband (up to 100 megabits per second) to nearly 10 million households and 1.8 million businesses by the end of this decade. Yet South Korea already has broadband available at 10 times that speed (1 gigabit per second) to households and businesses; Singapore will too, next year, and some European economies are close behind that achievement.
The full IBM report is available at ibm.com/ibm/au/digitalfuture.

 

Barangaroo South construction set to begin as Lend Lease raises $2 billion

Construction of two commercial towers at Barangaroo will now commence after Lend Lease received commitments totalling $2 billion from cornerstone investors on the Sydney Harbour project.

Calculate an IBAN


Darrell Lea goes bust after 85 years, 700 jobs under threat

The family-owned company, which manufactures chocolate , which include rocky road.

Cocoa Grader: Hard Job, Sweet Perks

*** Ahh, takes me back. I was a cocoa grader in the UK.

Are you ready for your close-up?

Any potential employee should know the tricks of the TV trade, particularly lighting and how to sit and what to wear on camera.

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