News: ASX ooops, CXA Ahhh, TMX, DTCC data x2, farewell MFG.....Heron Sharks, Easter Eggs

Well, Heron Island was a great swim. Inaugural is the word. Swimming around an Island, you’re always going to be against the current one way or another, but to do it with king tides...there was some hard graft to be done along the front of the Island. Still, high tide means more water over the reef and more space for sharks to disperse. The snap (on the blog) is me with the sharks (thought you might prefer that to the image of an old tyre being washed up onto the shore after an hour at sea). I’ve come to the conclusion that sharks are 10% bigger under the water and 10% bigger again when you’re the only one in the water with them.

A great swim and apart from being whipped by those pesky Olympians, not a bad result.

http://www.oceanswims.com/images/downloads/heronres113.html

My kinda Easter egg:

Search Google for “recursion” and click the “Did you mean?” suggestion. Or call up the Sydney Opera House in Google Earth and then spin around to the waterfront side; a late, great TV celebrity waits for you there. Or ask Google Maps to give you the directions from Japan to China and marvel at Google’s suggestion for getting across the Pacific (step number 42).

http://www.scientificamerican.com/article.cfm?id=the-jokes-on-your-computer&WT.mc_id=SA_CAT_TECH_20111101

See Step 42 at:

http://maps.google.com.au/maps?q=Japan+to+China&saddr=Japan&daddr=China&hl=en&sll=-25.335448,135.745076&sspn=53.947846,60.292969&geocode=FRhxKAIdfJI9CCkvGX_XD05nNDFEUmZ81HVC9Q%3BFZw0IwIdReU1BinBQsblZI5QMTFvNp80fKodlQ&vpsrc=0&safe=high&t=m&z=4

Maple gets it’s TMX.

But I’ve dropped the ball on watching what’s happening with LME. Any insights appreciated.

BATS / CXE moves forward.

ASX oops....and CXA Ahhh.

DTCC having two data warehouses is just nuts. And saying just knowing US exposures is OK is also nuts in a world where we’re looking for consolidated views on exposures.

EMCF published interoperability service description...and welcomes Hugh.

MF Global is sad on so many levels. A firm going down because it didn’t stick with it’s knitting (commodities to sovereign debt is a bit of a jump), for the clients....but also for sooo many suppliers (be it PATS or any other). Then there is a displacement of all those people. The ED&F Man shop has had some good people through its doors. No-one likes to see exits in the style of Lehman, Madoff or MFG. Thoughts to staff, customers and suppliers.

Last week end of road training before the JPM corporate cup next week.

Good week end all,

Scott.

s.riley.mail@googlemail.com

http://clearingandsettlement.blogspot.com/

Platforms

TMX GROUP BOARD BACKS MAPLE TAKEOVER BID The board of TMX Group has finally recommended that shareholders accept a C$3.8 billion takeover offer from a consortium of Canadian banks and pension funds.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23108

BATS EUROPE MIGRATES TO EQUINIX DATA CENTRE

Binary Order Entry offers a new optional order entry method for participants to interact with the BATS Europe platform that further reduces latency. The full suite of BATS Europe order types will be available using Binary Order Entry, as well as the standard FIX protocol format.

http://www.finextra.com/news/announcement.aspx?pressreleaseid=41702

An Interview with Jeff Olsson, Group Executive, Technology, ASX

18/Oct/11

We have reduced latency from around 30 milliseconds five years ago to around 300 microseconds in ASX Trade at present (a hundredfold reduction). When the high speed matching facility (Purematch) goes live in Q4 this will be further reduced to around 100 microseconds.

The project is progressing according to the project schedule and still on track for the first system to go live at the end of the year (ASX Trade)

http://www.fst.net.au/Whoswho.aspx?id=471&op=au

ASX sheds light on recent outage, delays move to new data centre

03/Nov/11

ASX Limited has revealed the extent of the problems that shut down its ASX Trade platform last week for four hours and reportedly delayed its move to a new $32 million data centre in Gore Hill by three months.

http://technologyspectator.com.au/industry/financial-services/asx-sheds-light-recent-outage-delays-move-new-data-centre

Traders furious as glitch halts bourse

28/Oct/11

THE Australian Securities Exchange was working last night to repair the damage to its reputation after its recently installed trading system, run by the US exchange operator Nasdaq OMX, suffered its second setback in less than a year, causing a four-hour shutdown yesterday.

The outage also coincided with the final settlement day for October series exchange-traded options, leaving options traders furious.

http://www.smh.com.au/business/traders-furious-as-glitch-halts-bourse-20111027-1mm5o.html

Chi-X Australia reports successful debut

Chi-X Australia, the alternative trading platform owned by exchange operator and technology provider Chi-X Global, traded a total of A$3.84 million across the six stocks available on the first day of its soft launch, with no reported technical hitches.

http://www.thetradenews.com/trading-venues/exchanges/6979

TERAEXCHANGE PLANS CENTRAL LIMIT ORDER BOOK FOR SWAPS AND OTC CLEARED DERIVATIVES

http://www.finextra.com/news/announcement.aspx?pressreleaseid=41715

http://www.teraexchange.com/

ERIS EXCHANGE RECEIVES CFTC APPROVAL TO BECOME A DESIGNATED CONTRACT MARKET AND ANNOUNCES THE LAUNCH OF BENCHMARK FORWARD STARTING INTEREST RATE SWAP FUTURES

http://www.erisfutures.com/sites/default/files/Eris_Exchange_Press_Release_10_31_11_0.pdf

MALTA STOCK EXCHANGE SIGNS FOR XETRA E-TRADING PLATFORM The Malta Stock Exchange is set to roll out Deutsche Börse's electronic trading system, Xetra.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23119

Dark Pools Don't See Bright Future in Canada

Despite several dark pool launches north of the border this year, growth of the sector in Canada could be impeded by stiff regulation and a well-entrenched 'upstairs market.'

http://www.advancedtrading.com/crossingnetworks/231600189?cid=nl_wallstreettech_daily

Clearing

DTCC to Create A Second Data Warehouse for Swaps

The Depository Trust & Clearing Corp. has asked the Commodity Futures Trading Commission to register a new storehouse called the DTCC Data Repository that will keep track of details on transactions occurring only in the United States in different classes of derivative swaps.
DTCC does have a global swaps repository called Trade Information Warehouse. But a provision of the Dodd-Frank Wall Street Reform Act is leading to the creation of a separate warehouse of data on U.S.-only swaps.

http://www.securitiestechnologymonitor.com/news/swaps-dtcc-registration-cftc-29475-1.html?ET=securitiesindustry:e2982:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_110111

HUGH BROWN JOINS EMCF AS DIRECTOR OF UK MARKETS

http://www.finextra.com/news/announcement.aspx?pressreleaseid=41811

EMCF INTEROPERABILITY SERVICE DESCRIPTION

In anticipation of the introduction of interoperability for Chi-X and BATS in January of next year we have produced a service description for your convenience.

The guideline contains practical and operational information about the set-up and processes around interoperability. The guideline can be found on our website under ‘projects’ and ‘interoperability’.

http://www.emcf.com/upload/uploads/111025%20Service%20description%20interoperability%20v1%20final.pdf

Participants

11-237AD MF Global
Tuesday 1 November 2011
ASIC is aware that companies in the MF Global group have been placed into administration. This impacts a number of companies in Australia.

http://www.asic.gov.au/asic/asic.nsf/byHeadline/11-237AD%20MF%20Global?opendocument

MF GLOBAL COLLAPSE HITS PATSYTEMS

Shares in UK screen-dealing software house Patsystems fell over 10% yesterday on news of the collapse of MF Global, a major customer accounting for recurring revenue of around £3 million.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23110

MF Global Workers Face Tough Job Market
Recruiters are flooded with resumes as workers at MF Global Holdings race to get hired before peers.

http://www.wallstreetandtech.com/career-management/231902206?cid=nl_wallstreettech_daily

Stuff

MUMBAI GETS DIAMOND-DISPENSING ATM

Indian jewellery firm Gitanjali has unveiled an 'ATM' that dispenses not cash but gold, silver and diamonds.

Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23102

DOUBLE DUTCH?

The Anglo-Dutch wars of the 17th and 18th centuries were acrimonious even by the usual standards of war . The wars were a very long time ago and we are all friends now

The common strand in all of these disparaging 'Dutch' expressions is that anything Dutch is the opposite of what it ought to be. Examples of these expressions are:

Dutch bargain - a bargain made when one is debilitated by drink - first recorded in 1654.
Dutch defence - a legal defence in which the defendant seeks clemency by deceitfully betraying others - 1749.
Dutch comfort - cold comfort; only good because things could have been worse - 1796.
Dutch metal/Dutch gold - a cheap alloy resembling gold - 1825.
Dutch courage - brash bravery induced by drink - 1826.
Dutch treat - no treat as such; each person pays for their own expenses - 1887.

http://www.phrases.org.uk/meanings/double-dutch.html

We Aussies are financially joined at the hip with the US.

http://www.macrobusiness.com.au/2011/11/chart-of-the-day-sp-versus-asx/?utm_source=Media+List&utm_campaign=39a7602832-RSS_DAILY_MAILCHIMP_CAMPAIGN&utm_medium=email

CXA, CXJ, CXC, ASIC, LSE, TMX, Sola, I/Op...Acronym fatigue?

Aussie market structure issues continue to dominate domestic debate.

e.g. ASIC is aiming to perform market supervision on a cost recovery basis. Most of those costs, (29.9myn over 5 years, or 6myn / year) are paid by ASX (3.7 myn per year). That leaves 2.3myn per year to be paid for by other MLO’s: (CXA, National Stock Exchange, Bendigo, APX etc.).
Full list of Aussie market licences at:
http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Licensed%20domestic%20financial%20markets%20operating%20in%20Australia

Lots of news also in Canada. Not all of which I follow, but it appears in response to a record month for Chi-X Canadsa, Omega is reducing fees and Alpha is stirring up the maple syrup with exchange status and a rival TMX bid via syndication.

Interoperability takes a step forward(?), or is this just the resumption of the previous LCH / X-Clear status?

I'm not surprised the OTC market is smaller than claimed. I'd rather see more effort put into accruately measuring our markets and then managing the risks rather than blindly prescribing lets CCP clear 'everything' that moves. If you can't measure it....

For those enjoying the Northern Hemisphere Spring; Yes, I'm jealous. 6 weeks from now we have the soltice...and the days will start getting longer here. Enjoy it while you can!

I don't know who won the Eurovision, but a nice interactive map attached. I do know my Reds are the top of the Super 15 Rugby...and that is simply wonderful!

Have a great week all,

S

PLATFORMS ASIA

REUTERS: AUSTRALIA FACES CLEARING AND SETTLEMENT CONUNDRUM IN WAKE OF CHI-X LICENCE
By Nathan Lynch
The Australian government's decision to grant a market licence to Chi-X this week has highlighted two inconvenient truths about the Australian exchange landscape - inconvenient truths that go by the names of clearing and settlement.
Fairweather said the general consensus in the markets - based on the experience from overseas - is that there is room for competition in the clearing space but settlement, by its very nature, is non-contestable. As such, any review would need to take account of governance arrangements for clearing and settlement services, the facilitation of competition in relation to clearing and the fair pricing of the ASX's settlement's services.
http://www.reuters.com/article/2011/05/05/australia-exchanges-regulation-idUSL3E7G50F420110505

AUSTRALIAN FINANCIAL REVIEW: ASIC FUNDS IN QUESTION AS EXCHANGES FLOURISH
By Patrick Durkin, 05/12/11
The federal government, its corporate regulator, the stock exchanges, brokers and investors are all looking at each other over who will pay the $29.9 million bill it will cost to police the stockmarket.
When the Australian Securities and Investments Commission took over supervision of the stockmarket from the Australian Securities Exchange last August, the legislation included the unusual ability for the regulator to recoup its costs, rather than being shouldered by the government. That cost has now been estimated at $29.9 million over five years and in the first year the ASX was required to pay $3.4 million, of a $3.7 million annual fee, to help fund ASIC's new role.
That is expected to leave about $2.3 million for the new stock exchange Chi-X and other smaller exchanges to meet each year. But the government has said it will consult with the industry again later this year on exactly who will pay.

TRADE NEWS: CHI-X JAPAN MAINTAINS POSITION AS LARGEST PTS
Chi-X Japan, the proprietary trading system (PTS) owned by market operator Chi-X Global, has continued its solid start to the year as it battles to become the largest alternative market in Japan.
According to its own figures, Chi-X Japan accounted for 1.62% market share of blue chip index the Nikkei 225 in April 2011, up from 1.2% in the previous month and 1.16% in February. The increase saw Chi-X Japan maintain its position as the largest PTS in the country for the second month in a row, just ahead of SBI Japannext.
http://www.nomuraholdings.com/news/nr/asia/20110509/20110509.pdf

CHI-X GLOBAL IN STAKE SALE TALKS; Chi-X Global is in advanced talks with four trading firms and banks to take a minority stake in the alternative share trading platform operator reports the FT, citing "three people familiar with the matter".
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22487
Chi-X Global is in advanced talks with four trading firms and banks to take a minority stake in the alternative share trading platform operator reports the FT, citing "three people familiar with the matter".
The group is in talks with Getco, the Chicago-based proprietary trading firm, Quantlab Financial, a Houston-based rival, Deutsche Bank and Bank of America Merrill Lynch about taking a stake as part of a deal which values Chi-X Global at around $50m, the UK broadsheet reports.


INDIA'S EQUITY MARKET MICROSTRUCTURE EVOLUTION
India's equity market microstructure has undergone a significant transformation over the past few years. The key drivers of this change have largely been..
HTTP://WWW.ASIAETRADING.COM/INDIA-EQUITY-MARKET-MICROSTRUCTURE-EVOLUTION/

HKEX APPOINTS CHIEF ADMINISTRATIVE OFFICER
HKEx has appointed Joseph Meyer as its first CAO.
Hong Kong Exchanges and Clearing Limited (HKEx) has created a Chief Administrative Officer (CAO) position to oversee its major projects, Administration Department and Human Resources Department.
His most recent position was Representative Director of Chi-X Japan.
" there are several major projects, including the introduction of OTC Clearing (the clearing of derivatives traded in Hong Kong’s over-the-counter, or OTC, market) and Hosting Services, major IT upgrades and the completion of our Next Generation Data Centre, that require organisation-wide coordination”
http://www.hkex.com.hk/eng/newsconsul/hkexnews/2011/110509news.htm

HKEx Publishes its 2011 First Quarter Results\
http://www.hkex.com.hk/eng/newsconsul/hkexnews/2011/Documents/110511news.pdf

SINGAPORE EXCHANGE ENHANCES SECURITIES CLEARING FUND STRUCTURE
The enhancements and accompanying changes to the CDP Clearing Rules will take effect from 3 May 2011.
The revised Clearing Fund structure is scalable, linking clearing members’ contributions more closely to the level of risk they bring to the clearing system. Their clearing fund contributions will change in line with their securities traded values. Previously, the contributions remain fixed in aggregate.
Under the revised structure, CDP only requires a portion of clearing members’ increased contributions to be deposited upfront. Clearing members will be called upon to deposit the remaining contributions under conditions of increased risk or to meet losses arising from clearing member default.
Details are available on SGX website at:
http://www.sgx.com/wps/portal/corporate/cp-en/regulation/rulebooks_manuals/cdp_clearing_rules/amendments
http://www.asiaetrading.com/singapore-exchange-enhances-securities-clearing-fund-structure/



ASIC CONSULTS ON MARKET INTEGRITY RULES FOR THE FEX MARKET
ASIC today announced it has released a consultation paper proposing new market integrity rules which will apply should Financial and Energy Exchange Limited (FEX) be granted an Australian market licence.
http://www.asic.gov.au/asic/asic.nsf/byHeadline/11-97AD%20ASIC%20consults%20on%20market%20integrity%20rules%20for%20the%20FEX%20market?opendocument


Exchanges in Asia: Trends and perspectives
Australian Securities and Investments Commission
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Speech-Exchanges-in-Asia-IOMA-IOCA-Tony-DAloisio-20110504.pdf/$file/Speech-Exchanges-in-Asia-IOMA-IOCA-Tony-DAloisio-20110504.pdf
*** 27 pages.


PLATFORMS

BATS SCORECARD: UPTIME HIGH, MARGINS TIGHT. CHI-X? A RETAINED DEFICIT.
The S-1 Registration Statement filed Friday by BATS Global Markets to commence its bid to raise as much as $100 million from public investors gives the first glimpse of its financial footing, as it tries to build a business worldwide that lives up to its name
• Principal shareholders. Holders of 5% stakes in BATS include Citgroup Financial Products, Credit Suisse First Boston Next Fund, DB Investment Partners, GETCO Strategic Investments, LabMorgan Investment Corporation, Lime Brokerage Holdings, Lehman Brothers Holdings, ML IBK Positions. Strategic Invesmtnets I and Tradebot Ventures Fund
http://www.securitiestechnologymonitor.com/news/bats-global-markets-uptime-high-margins-low-27925-1.html?ET=securitiesindustry:e2507:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051411

CHI-X EUROPE POSTS RISING TRADING STATS; PARTNERS RUSSELL INVESTMENTS ON INDICES
http://www.finextra.com/news/announcement.aspx?pressreleaseid=38762

CHI-X REVOLVING DOOR SPITS OUT CFO O'KEEFE
The revolving door is spinning again at Chi-X Europe as chief financial officer Kevin O'Keefe confirms his intention to depart the European MTF in the wake of its recent take-over by Bats Global Markets.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22480

LSE LOOKS LIKE FACING COMPETITION FOR TMX FROM BANK-BACKED ALPHA ATS With Canadian banks looking for ways to block TMX Group's merger with the London Stock Exchange (LSE), traders have begun betting on the proposal being trumped, according to Bloomberg.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22529

LSE's Rolet says exchange mergers could unify regulation
London Stock Exchange CEO Xavier Rolet said the consolidation wave hitting the exchange sector could harmonise global trading regulations. "If you look at the existing exchange mergers, including the trans-Atlantic mergers, there's not a unified regulatory environment," Rolet said. "This is the greatest opportunity the financial crisis has presented -- to unify regulation." He also scrutinised European policymakers for their treatment of equities as opposed to bonds. Reuters (10 May.), Global Financial Strategy (11 May.)

LONDON STOCK EXCHANGE UPBEAT AS PROFITS RISE; FILES WITH CANADIAN PROVINCES FOR TMX MERGER
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39203

TMX SOLA PLATFORM GOES LIVE AT TURQUOISE
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39202

ALPHA ATS AIMS FOR Q4 LISTINGS LAUNCH
Canadian alternative trading system (ATS) operator Alpha Group expects to become an exchange by Q4 2011 and aims to challenge the listings dominance of the TMX Group, following its regulatory filing last month.
http://www.thetradenews.com/asset-classes/equities/6151

MAPLE CONSORTIUM LAUNCHES TMX BID
A consortium of Canadian banks and pension funds have made a C$3.6 billion offer for TMX Group in a bid to scupper the exchange operator's planned merger with London's LSE.
The Maple members are understood to be Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Caisse de Depot et Placement du Quebec, Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan, Alberta Investment Management and Fonds de Solidarite des Travailleurs du Quebec.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22555


Bonds.com, Inc. (Bonds.com) is a new model for the trading of fixed income instruments in small size. The management team is working to anticipate industry developments and is working to provide innovative approaches to the trading of fixed income securities. To date these approaches have resulted in a neutral electronic platform to access liquidity and live orders; the opportunity for price discovery and negotiation; and a reduction in the time, labor, and cost of execution across a range of asset classes all of which trade large volumes in small size.
http://www.bonds.com/



CLEARING

LCH.CLEARNET AND X-CLEAR GET FSA APPROVAL FOR INTEROPERABILITY
European clearing house interoperability has moved a step nearer after the UK's FSA approved new arrangements between LCH.Clearnet and Switzerland's X-Clear.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22548


DEUTSCHE BANK'S JONATHAN HITCHON ELECTED TO DTCC BOARD
http://www.finextra.com/news/announcement.aspx?pressreleaseid=39073

EUROPEAN OTC MARKET FAR SMALLER THAN CLAIMED - STUDY Around 16% of European share trading is over-the-counter (OTC), far less than claimed by stock exchanges, according to a study from the Association for Financial Markets in Europe (Afme).
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22489

IMPACT REPORT: THE COST OF OPERATIONAL FAILURE
Failure to settle trades on time are rare and on average amount to less than one percent of a firm’s trading volume. But each fix can cost as as much as $1,000 per transaction.
The challenges -- and what to do about them -- are in this analysis by Securities Technology Monitor in its latest Impact Report. The focus: operational risks.
http://www.securitiestechnologymonitor.com/reports/22_14/-27809-1.html
*** 35 pages



CORPORATES, CREDIT AND SEFS
Dodd-Frank will directly or indirectly affect nearly every segment of the capital markets. In the fixed income arena, OTC derivative regulation, such as clearing and execution requirements, will have a profound impact on counterparty risk management and trading. Its impact will extend to the cash credit markets and will serve as the catalyst for increasingly electronic and centralized trading. This will be most apparent in the corporate bond market, where we should see tighter spreads, increased volume, and deeper liquidity. Corporate trading will likely mirror that of CDSs and migrate to platforms that allow a more flexible execution protocol than exists in the current two-tiered market structure.
http://www.woodbineassociates.com/uploads/Woodbine_Opinion_-_Corporates_Credit_and_SEFs_-_March_30_2011.pdf


PARTICIPANTS

PENSON'S STOCK PLUMMETS AFTER DISCLOSURE OF ILLIQUID RECEIVABLES
The stock of Penson Worldwide tumbled after it disclosed it had $97.4 million of "nonaccruable receivables."
Of that amount, about $42.6 million is collateralized by bonds issued by Retama Development Corp and related interests. Retama Development Corp. owns the Retama Park racetrack in Selma, Texas near San Antonio.
Penson, the only publicly traded and non-bank owned clearing firm, cited the non-accruals under the category of risk factors in its quarterly filing with the Securities and Exchange Commission on May 9. Penson, whose stock trades on the NASDAQ Stock Market, closed at $3.12 a share, down 81 cents or 20.61 percent on Thursday
http://www.securitiestechnologymonitor.com/news/-27911-1.html?ET=securitiesindustry:e2503:171544a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=STM_BNA_08302010_051211

OTHER

DUMPING CHEQUES COULD "SPELL DISASTER" FOR UK CHARITIES Plans by Britain's banks to abolish cheques by 2018 could "spell disaster" for many of the country's charities, according to the Institute of Fundraising.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22527

...and then the days start getting longer.
WooHoo!

WINTER SOLSTICE (SOUTHERN HEMISPHERE) - EDUCATION NETWORK ...
24 Mar 2011 ... On the day of Winter Solstice, Earth's south pole is tilted away from the Sun. ... Start Date: 22 June 2011. End Date: 22 June 2011. Duration: 1day ... Coverage: Australia. Region: All Australian states. Language: en ...
http://www.edna.edu.au/edna/go/events/cache/offonce;jsessionid=51273830EB6EFB737E319FB9B5474684?nbpath=1981,601834&action=item&keywords=&from-display=&from=&until-display=&until=&location=All%20Australian%20states§or=&calendar=all

Eurovision (interactive)
http://www.spiegel.de/flash/flash-25968.html#ref=nlint