Tuesday, March 8, 2016

LSE, The rise of Ether, Bye bye Chi-X...and the best thing out of Melbourne


LSE in the news and as ever, more news and reports on blockchain than one can read in a week.

In the past I've levied 2 criticisms at the LSE. One, that is an incumbent institution and Two, that the sum of the parts do not unlock the value of the group. Time to re-visit this.

First of all, I'm a little surprised by how little credit Xavier is getting. Lets look at the share price under his tenure. At MiFID (Nov '07), LSE was around STG 17+ a share. Post MiFID Rolet comes in, after LSE shares have had a steady fall with the fan fare of competition to circa STG 7 a share. Now, it is circa STG 28 (and rising...some say even STG 32 is attainable)...and the loss of market share has been contained.
So, respect to Xavier and his advisors. They've obviously been listening to their customers.

So, One. From 2009, with the Millennium acquisition LSE started a journey of not behaving like an incumbent. And that journey continued with, Two, a tidying up of the sum of the parts...grabbing the LCH stake and going from a board representative to an outright owner, likewise with FTSE (alongside the background of the benchmarking hype). I must say I'm surprised by the full value that has now been 'unlocked' from the LSE holdings.

I am also surprised by how little press I see about Euronext. With LSE in play...and a debate about Brexit on the cards....I think Euronext offers great value to those that walk away empty handed from the LSE dance. A real Eurozone play..(read ECB "location policy")...and foothold (all the more so if the Clearnet stake is divested).

Some other bits of history:
NYSE Group, owner of the New York Stock Exchange, offered €8 billion (US$10.2b) in cash and shares for Euronext on 22 May 2006,
In December 2012 Intercontinental Exchange announced plans to acquire NYSE Euronext, owner of Euronext, in an $8.2 billion takeover

LSE chief Rolet to retire after Deutsche Börse merger
London Stock Exchange Group: A timeline of the deals and attempted transactions

He joined the Board of the London Stock Exchange in March 2009, and became CEO in May. Under his leadership, the London Stock Exchange Group acquired MillenniumIT (2009),Turquoise Holdings Ltd (2010), FTSE Group (2011), TRS (2011), GATElab Srl (2012), EuroTLX Srl (2013),LCH.Clearnet (2013), Bonds.com (2014), ExactPro (2014) and the Frank Russell Company (2014) from Northwestern Mutual, the Asset management arm of which was sold in October 2015 to TA Associates and Reverence Capital Partners. In October 2015, LSE Group launched Curve Global, a new Futures Exchange co-owned with Barclays Bank, Bank of America, Citi, Goldman, Sachs, Societe Generale and the Chicago Board Options Exchange.

(Poor old Proquote got ejected along the way)

LSE share price history (MiFID came into effect Nov 2007....and you can see the LSE share price slide from that point.)
or

DLT / Blockchain

And so it happens....Ether has overtaken the marketcap of Ripple (leaving Ether second only to bitcoin).
Look at Ethers value appreciation here.
(My advice has been to switch from Bitcoin into Ether)
http://coinmarketcap.com/

No, Bitcoin is not the future of securities settlement
http://www.clearmatics.com/2015/05/no-bitcoin-is-not-the-future-of-securities-settlement/

Deloitte’s seventh annual Tech Trends report identifies eight trends that are likely to disrupt businesses in the next 18-24 months – from blockchain to augmented reality, the Internet of Things, socially responsible applications of technology and more.http://www2.deloitte.com/global/en/pages/technology/articles/tech-trends.html#

Banking on Blockchain: Charting the Progress of Distributed Ledger Technology in Financial Services.
A new paper produced by Finextra in association with IBM explores the progression of blockchain.
(this paper requires registration)
http://www.finextra.com/surveys/survey.aspx?surveyguid=32e19ab4-2d9c-4862-8416-d3be94161c6d

Deutsche Bank calls for co-operation with fintech firms on B2B services.
In a new whitepaper (PDF), the German bank acknowledges that over the last decade a host of non-bank players, from PayPal to Stripe to Apple Pay to Bitcoin, have upended the payments market, turning models on their head.
Full paper here:

Global regulators to probe fintech threats to financial stability
The Financial Stability Board is to evaluate the potential for systemic risk posed by emerging innovations in financial technology
National regulatory bodies have so far taken a softly-softly approach to the growing fintech sector for fear of stifling potentially beneficial creative innovation.

FCA to extend Innovation Hub; advance research into blockchain tech
The discussion, inevitably, turned to the application of distributed ledger technology in financial service, with Woolard setting out some of the regulatory and consumer issues that will need to be discussed as the technology evolves.
"For example, how individuals gain access to a distributed network and who controls this process, along with what data security exists for users are vital considerations for us as a regulator," he says. "The FCA continues to monitor the development of this technology but is yet to take a stance until its application is clearer."

IOSCO Securities Markets Risk Outlook 2016
International securities regulatory body Iosco has identified the disruptive threats from technological innovation as a key risk factor facing financial markets in 2016.

Markets

BATS drops Chi-X name in global rebrand
http://www.bloomberg.com/news/articles/2016-02-22/europe-s-biggest-derivatives-exchange-halts-trading-on-glitch

IEX Sick of SEC Delays on Exchange Approval
....These “flash boys” are starting to lose their patience....
http://nypost.com/2016/02/19/iex-sick-of-sec-delays-on-exchange-approval/

NYSE Embarks on High-Stakes Technology Shift for its Exchanges
....moving its markets on to a single software platform called Pillar, a move that its owner Intercontinental Exchange Inc. hopes will allow it to shed its image of having clunky, out-of-date technology...
http://www.bloomberg.com/news/articles/2016-02-19/nyse-embarks-on-high-stakes-technology-shift-for-its-exchanges

SEC to focus on asset management, disclosure, market structure in 2016
In equity market structure, the SEC will finalize rules on the oversight of active proprietary traders and on alternative trading systems. It will also work to enhance order routing disclosures and the risk controls on trading algorithms
There is limited time for the commission to accomplish any goals, with the administration of President Barack Obama coming to an end in less than 12 months. Traditionally, the head of the SEC, a politically appointed position, is replaced when a president leaves office. The SEC is currently down two members from its full complement of five.
http://www.reuters.com/article/us-usa-sec-focus-idUSKCN0VS1OJ

Esma Pledges to Ease Reporting Burden on Trading Firms
ESMA is examining ways it can standardise trade reporting requirements, amid continued complaints that firms are being forced to do the same work several times over to satisfy different rules. The regulator has asked its Market Data Standing Committee to consider how to reduce the burden on the finance industry in the wake of a swathe of different reporting requirements, contained in legislation such as the Markets in Financial Instruments Directive, the Securities Transaction Financing Regulation and the European Market Infrastructure Regulation. Finance firms complain that the rules require them to provide the same information in subtly different formats, duplicating work and pushing up costs.
*** Sorry, this story behind a paywall.

JPMorgan's ‘London Whale’ Surfaces to Say '12 Loss Not His Fault
In his letter, Iksil said the government’s decision not to prosecute him helps show he’s not to blame. In July, the U.K. Financial Conduct Authority abandoned a proposal to fine Iksil 1 million pounds ($1.4 million) and refrained from banning him from the industry.

Full letter available here:

Morgan Stanley scales back equities financial technology investing group


Stuff

USB Type-C: One cable to connect them all

A lovely blast from the past...
The Seekers - Morningtown Ride (1964 - Stereo, enhanced video)https://youtu.be/M-RkC6MYT2E
...and one of the best things I know to come out of Melbourne!
https://youtu.be/HDr1lI_4Co0




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