Well, another week flies by.
Hard to believe last week we were absorbed by the Limpix,
now we’ve had the welcome home parades and it’s all another memory.
Congratulations to Team UK...on raising the bar again for
The Best Limpix ever.
As for Australia, something like our worst performance in 20
years and the local press is crying that all our top coaches are off winning
gold for others.
Don’t forget, the Aussie Rugby team is coached by a Kiwi.
IT is one thing for
the British to thrash Australia in the medals table of the London Olympics.
But now the Games are over, it is just as
clear they have knocked Sydney off its pedestal as the best host of a modern
Olympic Games.
As awful as it is to admit, London 2012 was
bigger, slicker, almost as friendly and more thoughtfully planned than Sydney
in terms of the legacy it will leave the host city.
How world stole the brains behind Australian sport
He, hee. Aussie coaches got more gold that Aussie
competitors!
Meanwhile, we had the largest fun run on earth back in
Sydney.
Some 69,160 out of a potential crowd of 85,000 showed up.
Superheroes, fairies and Lego
men in suits, gorillas, bananas and colourful boots - it was like a Pixar film
come to life.
My results here:
I was happy with under 100 minutes.
A sobering story on PC security.
When passwords fail: How to make yourself hack-proofJuly 2012
- Perform intraday credit controls at both clearing participant and trading participant level.
- Set alerts and receive a web pop up, e-mail or SMS alert if a limit is breached so that immediate action can be taken
First to market with a comprehensive market-wide solution
We have published proposed rules and guidance on automated trading and released our fourth report on the supervision of Australian financial markets and market participants.
Consultation Paper 184 Australian market structure: Draft market integrity rules and guidance on automated trading (CP 184)
By Monday morning, he'd found out exactly how his online
identities had been compromised. The upshot: Creating better passwords wouldn't
have helped him....
And I’ve
registered for a trendy(?...surely a contradiction in terms once identified by
me) outlook email address.
Can Hotmail regain its crown?
I liked this
analogy:
BEANZ
MEANZ MIFID
Steve
Grob
+1
I saw a presentation this week where one speaker suggested
inviting “back office” people onto the trading floor should be banned.
Stated examples were: Nick Leeson, Jerome Kerviel,
Kweku Adoboli.
On the face of it there sounds to be some logic to it, but
the more I thought about it, the more I think this is a rubbish proposition.
Does this mean an engineer who knows how a car works
shouldn’t be allowed to drive?
Ridiculous.
In this age of ever more complicated best execution I think
having people around that know the full workings of the industry can only be
helpful.
And if your best efforts risk management strategy is
reducing the talent pool you hire from....doesn’t sound like a great business
model or control process either.
That said, I think these individuals are all vile and odious
people. What they did to their colleagues and investors is unforgivable.
I’ve seen Leeson speak (and he claimed all the proceeds went
back to victims / charity) but he didn’t look one bit apologetic to me.
Nah, there are bad eggs in every walk of life. ..a blinkered
hiring strategy is not the solution.
Other news was ASX results yesterday.
The analysts presentation is nice.
As ever all the predictable results are there. Magnificent
cost income ratios (even though some commentators picked up these are “bad
results”...relative to what I wonder?....in these markets I think they’re
fortunate results).
In the same breath as announcing these results there is also
a submission on why Australia doesn’t need competition.
Links to all stories under platforms.
The other thing that struck me this week was the BIS
consultation paper on recovery for FMIs.
This introduces the concept of a “Bail-In”.
I do think it would greatly alleviate the stress of a
default and the obvious and practical difficulties of replenishment but it does
leave me feeling the potential that it opens the door for a CCP to short change
me.
I’ve not read the paper as yet.
The other trend I notice is the offering of “free” risk
management tools.
At first I thought “Trace” was just an EMCF thing.
It looks like ASX could follow suit with Razor.
Lots more HFT bashing this week, so I’ve included a couple
of old stories, but positive ones for HFT.
Also lots of debate about the dark....certainly lacking
transparency and disclosure (of vested interests).
Knightmare extensively covered everywhere.
Couple of Cinnober stories I was late on picking up: Pave
move and Nomura development acquisition.
An interesting Buddhist myth compares lunch in heaven to
lunch in hell. Both places have the same set-up: large dining tables filled
with delicious food. However, the forks are too long and it is impossible for
the diners to eat with them. Those who dwell in hell live in eternal
frustration and hunger at not being able to eat the delicious food. Those who
dwell in heaven, however, simply smile and use the long forks to feed each
other. The meaning is simple: The same circumstances can be experienced very
differently depending on our attitudes and behavior. Scientific data suggests
that compassion is the intelligent way.
All is not lost is Asia:
Overall, the mood was quietly optimistic, and for three
reasons. First, the world economy can continue to grow briskly despite North
Atlantic sluggishness – after all, it grew by 25 per cent over 2007-11, thanks
mostly to Emerging Asia. Second, Australia's major trading partners are in that
region. And third, if worse comes to worst, and the world does experience
another 'Lehman moment', both Asia and Australia have the capacity to respond
with policy stimulus to cushion any downturn.
I couldn’t quite see 25% growth, but a good heat map
available at the world bank:
All the action is down south.
After an 18th last week end (no, not mine) I’m
just happy to still have a house and the same number of TVs.
(didn’t inspire a London riot).
Whatever your leisure, make it a pleasure....and be generous
and compassionate serving with your long fork!
Have a great week-end,
S
PLATFORMS
ASX RESULTS
P4. EBITDA remains over 75% (as per last 5 years!..see also
p28)
P7. Revenue pie chart.
P9. Average trade size down 23% to $7,149.
P14/15. Business plan budget...including clearing fees and
OTC
P30. Average fee per dollar of traded value
(bps)....1.05....(At Chi-X Europe our gross revenue was 0.10 bps)
P31. Hosting services. 76 cabs at ALC.
Full annual report available here:
Some comment here:
Now, given the above, here we have reasons why competition
is bad for Australia and Australians:
THOMSON
REUTERS EXTENDS FXALL TENDER OFFER; AGREES TO SETTLE CLASS ACTION SUIT Thomson
Reuters has filed an application to settle a class action lawsuit over its
proposed acquisition of multi-bank foreign exchange portal FXall and extended
its $616 million tender offer by three days.
CLEARING
Creditors should face clearing failure hit
Many clearing houses have default funds,
held in reserve, as well as the margin posted by customers for trading but
CPSS-Iosco said it may be better to use both sources to cover losses.
“It may be preferable to haircut the
creditor’s claims to them and give these creditors equity in the FMI through
the mechanism of bail-in, in resolution, rather than resort to liquidation,” it
said.
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Recovery and resolution of financial market infrastructures
- consultative report
CPSS Publications No 103
Paper here:
40 pages
Esp FMIs that take on Credit Risk.
P 12.
New standards for financial market infrastructures issued by
CPSS-IOSCO
16 April 2012
Paper here:
How TRACE
improves your daily business:
What are
the costs for me?
TRACE will
be offered free of charge to Participants.
August 9, 2012
TMX Group's Razor Risk 3.0 launches at ASX
Participants can now familiarize themselves with their
potential margin calls in the equity market before ASX Clear starts calling
margins in June of next year," said Paul Jones, General Manager, ASX
Clearing Risk Policy.
ISDA
AMENDS SWAP DOCUMENTATION FOR COMPLIANCE WITH DODD-FRANK
CLEARING
CONNECTIVITY STANDARD LAUNCHED
A 25 page “introductory guide” to NSCC fees.
POLICY
12-195MR ASIC consults on electronic trading and releases
fourth market supervision report
ASIC’s proposed rules and guidance include:
·
draft new market integrity rules requiring
direct control over filters and automated controls to suspend orders and/or
systems;
·
draft rules that revise the process for
certifying systems and reviewing changes at least yearly; and
·
draft regulatory guidance on automated trading,
covering issues consulted on in (CP 168), consolidated with updated guidance
currently contained in ASX guidance notes. This includes guidance on testing of
systems and filters/controls - the ability to manage highly automated trading,
and stress testing of order flow.
Submissions to CP 184 close on 14 September 2012.
·
Report 296 ASIC supervision of markets and
participants: January to June 2012 (REP 296)
Further dark pool regulation premature:
Fidessa
Dark pools in Australia are too young for more regulation,
said trading technology provider Fidessa, following a call from the ASX to
tighten rules for off-exchange trades
ASX submission to ASIC Consultation 179 –
Australian market structure: Draft market integrity
rules and guidance
High Frequency Trading – Position Paper
In our High
Frequency Trading – Position Paper Optiver tries to explain what
HFT is and why it is actually beneficial to the market and investors. We also
try to refute often heard accusations of HFT harming the market quality or
having unfair competitive advantages over other investors. Finally we discuss a
number of proposed regulatory initiatives that are recently voiced to limit the
impact of HFT and analyse the impact of these proposed measures on the
financial markets.
High Frequency Trading Review, Mike O’Hara talks to Mark Spanbroek,
Vice-Chairman of the FIA European Principal Traders Association (EPTA)
SEC to Host Market Technology Roundtable
The roundtable entitled "Technology and Trading:
Promoting Stability in Today's Markets" will take place on September 14
and convene experts on designing, operating, and controlling the systems that
form the core of our market's infrastructure.
Interesting read on HFT and microwave
RBA STATEMENT ON MONETARY POLICY
SPECIAL SHORT SELLING EDITION
We have now published Market Watch
42:
PARTICIPANTS
Knight $440 Million Loss Sealed by Rules on Canceling Trades
Javier Tordable new CEO for Cinnober Financial Technology
In the last one and a half years,
Tordable has been leading the efforts to establish PAVE, aiming to be Spain’s
first MTF, to attract international traders and increase liquidity in Spanish
equities
Cinnober acquires Nomura’s Swedish technology development
centre
The deal includes 40 specialists
in developing equity trading applications and platforms.
In addition to evidence that survival may be enhanced by
caring for others, there are now findings suggesting that the statement made by
the Dalai Lama, ‘if one wishes to make others happy be compassionate, if one
wishes to be happy be compassionate,’ in fact, has great validity.”
