Wednesday, July 25, 2012

RIEs v MTFs, LSE SGX, NSE, EuroCCP, Aussie CGS, -ve HFT....poor HSBC and respect for Wiggins.

Son D has chosen Japanese as his language elective. Apparently learning the language includes learning to make the tucker too. Master R is featured sporting his blazer. A fine young man I must say.

Next year classes include shared Japanese language days with Pymble Ladies College....and he's decided to continue with his studies. He must like making sushi.

Some call our PM Juliar because of her blatant dishonesty....and what a difference from Brad Wiggins. Respect. And I think he’s a deserving winner of this years tour.

Absolute respect for Brad Wiggins.
Credit to his sport and his sponsors.

Tour defence is over for Cadel Evans

Without the unselfish work of the two Australians, Canberra's Michael Rogers and Launceston's Richie Porte, Wiggins wouldn't be where he is today - sitting pretty in yellow.

LSE / SGX On again, off again.
Hats off to Magnus at SGX, it’s a great deal for him if he pulls it off.
It is interesting to note the LSE and SGX valuations versus GDP.
LSE brand is internationally recognised....but open to competition. (US 4.2 byn)
SGX brand has the government ‘mandate’ shall we say. (US 5.7 byn)
After the ASX / SGX debacle (in my view SGX was poorly advised, or should I say over optimistically advised, by ASX advisors of the true political hurdles to overcome) I would say Magnus will only ever visit Australia on holiday.
What does it mean for ASX? Hmmm, on the face of it, not a lot.
The ASX business model does not strongly overlap with SGX in the region.
Unlike the Reuters / Telegraph regurgitated story I wouldn’t anticipate any strong regulatory push back from UK or European bodies.
As for the commercial synergies....I don’t see a lot immediately...but there are some twists I could envisage down the track.
...anyway...this speculation overcome by events as the deal is denied....nevertheless, this is one where I think: where there is smoke, there is fire.

Exchanges V’s MTFs
NSE faces its own competition in India and SEBI comments on Algo trading.
EuroCCP claims significant advances....and journalists can’t afford a quid, to explore cross subsidy.
8 FSB Systemically important utilities.
Aussie now consults on trading of Commonwealth Gov’t Securities...and this is long overdue! As is the ability to get exposure to corporate bonds. I think the UK does a good job of making Gilts accessible...but even in the UK corporate bonds are hard to get exposure to. This is a pity / short coming.
Quite a strong anti-HFT sentiment amongst the investing public in Aust. Vitriolic almost.
A similar negative HFT sentiment entering the global FX market.

And my heart goes out to HSBC. As if a bank ever sets out to aid and abet money laundering (well, maybe BCCI?). I mean, what is the purpose of these obscene fines and public floggings. OK, fixing LIBOR and rouge traders is one thing, but genuine accidents? Sometimes things slip through extremely broad scope firms. We can’t always do everything humanly possible before the event. Sometimes eagle eye hindsight is exactly that. Hindsight.

Don’t indulge: Be Happy.

“We are participating to raise money to support kids with Cancer and their families through some of the darkest, loneliest times of their lives. Yesterday we confirmed that our son Josh will undergo his next surgery on August 8th… 4 days before the City2Surf! Please share his story to everyone you know in the hope that people will dig into their pockets and support Cure Our Kids. If everyone could please try and get 1 donation, that would make such a huge difference to kids like mine!”
Oncology Mum, Emma

School rugby for me this week-end...and maybe some Sushi.



The Singapore Stock Exchange has denied rumours that it is engaged in merger talks with the London Stock Exchange.

UPDATE 2-LSE, Singapore exchange in merger talks - report

LONDON/SINGAPORE, July 20(Reuters) - The London Stock Exchange Group is in talks with the Singapore Exchange about a potential 7.2 billion-pound ($11.3 billion) merger, the Daily Telegraph reported, in a deal likely to face tough regulatory scrutiny.


Can anyone take on the mighty NSE? India's patchwork of exchanges looks to the future

India is home to the oldest exchange in Asia, the Bombay Stock Exchange (BSE), which traces its history to the 1850s and in 1875 became an official organisation known as 'The Native Share & Stock Brokers Association'. The second oldest exchange in India is the Delhi Stock Exchange (DSE), established in 1947. These exchanges have been completely overshadowed by a relatively new entrant established in 1992 - the National Stock Exchange of India (NSE). In two decades it has amassed 80 percent market share in cash equities, with BSE accounting for 18 percent and the rest of India's regional exchanges accounting for just 2 percent.

SGX extends Indian derivatives options

The latest partnership between the Singapore Exchange (SGX) and India’s National Stock Exchange (NSE) will, from Monday, allow investors to trade in Singapore new options contracts based on the Nifty index.

Upstart Indian exchange free to offer equities

India’s newest stock exchange, MCX Stock Exchange (MCX-SX), has gained regulatory approval to start trading new asset classes, pitting it against the country's two main exchanges for stock trading.

London Stock Exchange Group (LSEG) today announces that three exchanges on three continents, Borsa Italiana, Johannesburg Stock Exchange and Mongolian Stock Exchange have, within the last month, successfully migrated to the Group's ultra-low latency, high performance trading platform, Millennium Exchange.


TRADERS MAGAZINE: Debate on Playing Field Heats Up
Exchanges V’s MTFs / ECNs
Mr. Niederauer (Exchanges Doh!)
1. On the lengthy Securities and Exchange Commission approval process
2. On fair access
3. On the burden of market surveillance
Mr. Mathisson
1. On exchange immunity
2. On the tape revenue monopoly
3. On the lack of clearing fees
4. On the lack of capital requirements

NYSE Euronext to Launch Retail Liquidity Program
Retail investor trades to benefit from price improvement on the NYSE and NYSE MKT


Interoperable CCP calls for exchanges to play ball
“Within one month of the launch of full interoperability, we were clearing 40% of the trades on BATS and Chi-X – that’s an impressive figure when you consider it resulted from a large and immediate migration from the incumbent,” she says. “On Day One, three firms lined up to switch clearers. Now on certain days we’re clearing more than 50% of BATS Chi-X Europe’s trades.”

All for one Pound!
Yep, for one pound you can see from companies house the cross subsidy, via capital injections for EuroCCP...from parent DTCC. Like the above article, there is no mention of vested interests. Oh, well.

The London Metal Exchange (LME) has selected Cinnober, the Swedish software house, as the core technology provider for its new clearing house, LME Clear.


Regulators raise concerns about tri-party repo market
The Financial Stability Oversight Council has warned about issues in the tri-party repo market, saying "structural vulnerabilities" could result in systemic risk. The FSOC also said it supports the overhaul of the money-market fund industry

HKMA and SFC set out OTC derivatives proposals and amendments

The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) have set out conclusions on the proposed regulatory regime for OTC derivatives in Hong Kong and issued a further supplementary consultation paper on the final scope of the proposed changes.



I can handle the despair…it’s the hope that I can’t deal with!”
Former Reserve Bank of New Zealand advisor and multiple CEO, Terry “Macca” McFadgen’s, latest ‘Maccanomics’ article, which tackles the current malaise affecting the global economy and examines why the large-scale ‘money printing’ by the world’s central banks isn’t working.  Enjoy!

sebi Broad Guidelines on Algorithmic Trading
Based   on   recommendations   of   Technical   Advisory   Committee   (TAC)   and Secondary  Market  Advisory  Committee  (SMAC),  it  has  been  decided  to  put  in place  the  following  broad  guidelines  for  algorithmic  trading  in  the  securities

1. The Clearing House Payments Company, L.L.C.,
2. CLS Bank International
3. Chicago Mercantile Exchange, Inc.
4. The Depository Trust Company
5. Fixed Income Clearing Corporation
6. ICE Clear Credit LLC
7. National Securities Clearing Corporation
8. The Options Clearing Corporation
"In our role as the predominant settlement system for FX, CLS acknowledges its designation as 'systemically important' to the U.S. financial system," Gerard Hartsink, CLS' interim Executive Chairman said. "We take this responsibility very seriously and understand how important it is for us to continue doing our job at the highest level of competency."

facilitate retail trading of Commonwealth Government Securities
ASIC has released Consultation Paper 181 Retail trading in Commonwealth Government Securities (CP 181). The consultation paper will help to implement the Australian Government’s decision to facilitate retail trading of Commonwealth Government Securities (CGS) as part of fostering a deep and liquid corporate bond market.
ASIC Commissioner, John Price, said ‘Fostering the retail trading of CGS on financial markets can give retail investors, including self-managed super fund trustees, a more visible pricing benchmark for investments they may wish to make in corporate bonds issued by Australian businesses.'
‘In addition, it can encourage retail investors to consider diversifying their savings through fixed-income products like government and corporate bonds,’ Mr Price said

Press Conference by Tadahiro Matsushita, Minister for Financial Services

As the House of Representatives' Budget Committee concluded its deliberation, deliberation will start in the House of Councillors today. I feel regret that there have been few questions concerning financial and economic issues. The debate focused on the consumption tax and issues related to the defection of lawmakers from the Democratic Party of Japan as well as the Okinawa issue, but I, as a freshman minister and as the minister for financial services, feel that a broader range of issues should be debated. I will closely watch what will be debated in the House of Councillors today.
That is all I have to say.
*** Hear, hear. I have nothing to add to that. Great press conference.


Anti HFT sentiment in Australia (especially amongst the retail community)

Turning the table on high-frequency traders

Robert Gottliebsen
19 Jul 2012

Getting the jump on high-frequency trading
Robert Gottliebsen
18 Jul 2012

High-frequency trading is cuckoo

Alan Kohler
11 Apr 2012
HFT firms like the privately-owned and aptly-named Getco (for Global Electronic Trading Company), the world’s largest HFT operator, produce a large amount of self-justifying research material based around the proposition that they help investors by providing extra liquidity in the market.

...And in FX too....

High-speed traders push others out of forex markets
CLS Bank data indicate that Thomson Reuters and EBS reported a decline in volume in June compared with a year ago for spot trading of foreign currencies. Traders blamed that drop in large part on high-frequency traders, whose algorithms, they say, give them an advantage. Consequently, the non-HFTs are looking elsewhere to conduct their business.

Deutsche Bank introduces FX trading platform on Autobahn

Deutsche Bank has announced its FX trading platform on Autobahn. The new platform is intended to increase efficiencies and volumes thus contributing to Deutsche Bank's commitment to trade EUR 1 trillion every week within the next two years.

Couple Sues Goldman Sachs After All-Stock Sale of Dragon Systems Leaves Them With Zilch

Goldman maintains that it did a “great job” because it “guided the Bakers to a completed transaction.”

HSBC Compliance Executive Resigns Over Anti-Money Laundering Scandal

HSBC COMPLIANCE HEAD QUITS AT US HEARING HSBC's head of compliance fell on his sword in front of a US Senate subcommittee Tuesday after the banking giant was excoriated for lax money laundering controls.


Take the money & run?…………Well that seems the way of things, remember Frank Zappa’s pronoucement “there is a big difference between kneeling down & bending over” ……………so what will it be crusader or courtier?

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