185 Exchange Invest Weekly Podcast March 18th, 2023
This week in the parish of bourses and market structure:
$7.2 Million For Eris
The FTC Still Says No To ICE Black Knight
Sesame Street does financial meltdown – and this week’s letter for bust banks is “S”.
My name is Patrick L. Young
Welcome to the bourse business weekly digest
It’s the Exchange Invest Weekly Podcast Episode 185
Good day ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the week in market structure. All the analysis of the many events and happenings from the past 7 days can be found in Exchange Invest’s daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox.
More details at ExchangeInvest.com.
Eris Innovations, the exchange product developer has bagged a $7.2 million funding package from entities already trading their yield curve products.
The FTC says no but seems to have ignored this week’s divestiture as a 4 man panel with 3 Democrats raises a lot of questions in the political arena alone from this most ideologically fixated of US presidencies. ICE-Black Knight feels sufficiently wronged that they seek to fight on…
Meanwhile, in Bitcarnage this week, you can catch all the coverage of the end of crypto version 1.0 as it approaches its denouement in the Exchange Invest newsletter daily.
The “New New” Bank Run Ends The Old Fashioned Way. The Bitcarnage corporate body count of last week was predominantly centered around banks.
And indeed, it sounded like Sesame Street does bank collapses with all 3 of them:
‘S’ Silvergate Bank – the crypto bank
Silicon Valley Bank – which was more of a startup thing
Signature Bank which also closed last week, which was kind of more of a crypto thing as well
As I mentioned, apart from feeling like Sesame Street does bank collapses, all three:
Had a lot of deposits (n the case of crypto companies/startups).
Had customer bases it was difficult to lend to (crypto companies/startups).
During the QE low rate frenzy, they bought bonds and stuff which wasn’t negative yield…unfortunately, when interest rates rose, this drove ugly capital losses.
Thus, while there may be other banks which have bond losses to eat, it’s unlikely they’ve done so on such a widespread basis that it will provoke their demise.
Anyway, this was only a warm up for the story of the week as SEC Chair Gary Gensler Op-Ed: Getting Crypto Firms To Do Their Work Within The Bounds Of The Law.
First of all, that’s a very interesting piece to write, it wasn’t in the Wall Street Journal, it wasn’t even in the New York line. It was in The Hil (the magazine for Washington DC) and indeed, I quote Gazza G noted:
“Crypto intermediaries should structure their businesses to comply with our laws governing securities exchanges, broker-dealers, and clearing houses; they could put into place rulebooks that protect against fraud and manipulation. Crypto security issuers should file registration statements and make the required disclosures. These are the same rules that everyone else in the securities markets has played by for decades.
I find the talking point that there’s a lack of clarity in the securities laws unpersuasive. Some crypto companies might message that the laws are unclear, rather than admitting that their platforms don’t have sufficient investor protection.”
In essence, I think it’s fair to say that Gazza G has walked up to the crypto industry and cried blood, blood, blood.
Elsewhere in what one might call it legacy parish of exchanges, Elliot’s case against the LME will be heard in London during the week of June 19th. That’s very interesting silence so far from the LME on this but the court case is going to be scheduled for the same week as FIA’s London conference.
Meanwhile, massive expansion in Hong Kong, overseas firms in Stock Connect that’s a major game changer. And in fact, therefore, that’s kicking off at the start of the week and is – even by the standards of the Stock Connect initiative, which he has long supported despite what was initial local media skepticism, a terrific expansion of the Stock Connect program with international companies that are primarily listed on Hong Kong’s market now available to be included in Stock Connect southbound trading. A huge opportunity for mainland investors to diversify in the breadth of the Hong Kong market and indeed for Hong Kong exchange listings to access the vast pool of Chinese capital…
It’s one of those “just a touch seismic things” that presumably helped explain the swagger in the step of Hong Kong exchanges CEO Nicolas Aguzin as he was playing an active role at the Boca Raton conference over the course of the past week.. what an excellent initiative.
More indeed on Stock Connect developments because there was also an expansion in the number of days you can trade. Hongkong Exchanges and the Chinese mainland have managed to smoothed out a lot of the settlement arrangements. Thus when a holiday arises, essentially Stock Connect will be open when both markets are open, as opposed to the previous status quo which had a tendency to suspend Stock Connect trading one/two days prior to a holiday in either marketplace. That’s certainly something that’s going to be benefiting the Stock Connect program into the future.
Results this week, the most exciting sets of results we had were perhaps Bolsas y Mercados Argentinos, their Q4 results were spectacular revenues +83.5% no less. At the same time solid results from SIX slight falling off in terms of the operating income -0.3% but the overall group net profit came in at CHF 185 million. Resilient exchange of the weak Moscow Exchange (MOEX), their Q4 earnings were somewhat rebinding, net profits +29.2% #DespiteMadVlad. While currently isolated from the rest of the parish due to understandable sanctions provoked by Russia’s dumb invasion of Ukraine, the MOEX continues to demonstrate indomitable flexibility and a desire to survive and thrive.
New markets this week, two interesting pointers to bear in mind North Macedonia will be launching its power exchange in May, and in Egypt, the FRA has made legal amendments to establish the futures exchange of Egypt.
In deals this week, it was a busy week for us on the parish all the deals were in Exchange Invest Daily, the newsletter no person can afford to be without in capital markets and market structure. For the sake of this podcast, let’s look at some edited highlights. There was one really, really major story this week, Black Knight came in, and they sold a unit to address the FTC concerns on the ICE deal but that wasn’t enough for the FTC, provoking some relatively frustrated comments from the Intercontinental Exchange:
“Although ICE strongly believes that acquiring Black Knight is entirely pro-competitive, ICE and Black Knight previously announced an agreement to sell Black Knight’s Empower loan origination system (LOS) business including its Exchange, LendingSpace, and AIVA solutions, to a subsidiary of Constellation Software Inc. (TSX:CSU) in connection with efforts to secure clearance of ICE’s proposed acquisition of Black Knight under the Hart-Scott Rodino-Act. The FTC’s attempt to block the combination, despite this divestiture remedy, is without merit and serves only to delay improving the experience and outcomes for all participants in the mortgage industry.”
The joys of the blob, the FTC had signaled it would move on Thursday and so it did last week – albeit without it appears having paid any attention to the considerable divestiture made earlier in the week by the merging parties. Such as the wondrous way the blob greets tax dollars with a self-righteous contempt for the folks whose hard-earned is being spent.
Over at Blackstone-Thomson Reuters Refinitiv LSEG, Blackstone-Thomson Reuters they’re launching a sale of a $2 billion LSEG stake.
Eris Innovations have announced a strategic investment round to capitalize on new margin treatment in their business.
Each of the investors in the $7.2 million dollar strategic investment round is affiliated with companies that trade Eris SOFR, including DV Trading, DRW, Virtu Financial, ARB Trading Group, and Arclight Securities. As part of that deal, Jared Vegosen, the co-founder of DV Trading, has joined the Eris Innovations board of directors.
If you’re looking for some reading, of course at this point in time in the cycle to end understand the future of markets, technology, finance et al., “Victory or Death?” Blockchain, Cryptocurrency and the FinTech World is my most recent book, 20 plus years on from the Capital Market Revolution. “Victory or Death?” is published by DV Books and is distributed by Ingram worldwide.
While you’re waiting for your copy of “Victory or Death?” to arrive, check out our livestream Tuesday at 6pm London, 1pm New York time – it’s the IPO video live show. Catch the back episodes on LinkedIn and YouTube via “IPO-Vid”.
Our most recent show, we had a phenomenal episode with Jennifer Ilkiw – ICE: Cresting The Derivatives Wave with the head of ICE Futures US.
Coming up next week, we’ve got a little bit of numismatism from Colin Formosa who’s a leading figure in the Malta Numismatic Society. He’s going to be talking about Maltese money and more the world over in the history of exciting coinage.
Product news this week, NCDEX is going to be relaunching groundnut features in the near future.
ICE is going to be hosting carbon credit auctions for UpEnergy.
Britain’s gonna launch yet another review into attracting more stock market listings.
Perhaps the most interesting issue of the week was the scandal around Perth Mint, which is now facing a London bullion body review (LBMA) over their ‘doping’ of gold.
What a weird, wonderful story. Yes, they were still doping four nines quality gold bars, but it seems somehow that they added a little bit of other content, including silver in order to manage to save $150,000 a year perhaps up to 620,000 Australian dollars a year, which is only an infinitesimally tiny fraction of their annual sales. Difficult to understand quite why it was worth the whole effort.
In technology news this week, Bloomberg has entered into an agreement to acquire Broadway who is a low-latency execution management offering optimized for interest rate trading.
SEBI has unveiled its framework for adopting cloud services by stock exchanges.
In regulation news this week, SEBI has sought to step up, sway over the boards of bosses and clearing corporations around the dubious construct it has to be said from the seemingly perma-micromanaging Indian regulator.
ESMA is seeking yet more tools to tackle clearing crises.
Chinese financial regulators are facing deep pay cuts after an organizational revamp.
That leaves us only to consider ladies and gentlemen that just over a decade ago last week, the Falkland Islands concluded a historic referendum (10th -11th of March 2013). This followed contentious arguments from Argentina (which had been re-emerging in recent years, as the Argentine economy continues to disappoint). The turnout in the Falklands referendum was a substantial 92% of the electorate and the result not remotely open to question (except it seems subsequently by the perma-malcontents of Buenos Aires and the surrounding nation).
The response was a brutal rebuttal of Argentine calls for negotiations on the islands’ sovereignty with 99.8% of all votes cast supporting the Falklands remaining a British territory. A total of three votes were recorded against continuing British oversight.
And on that mysterious and magnificent note, ladies and gentlemen, my name is Patrick L. Young creator of marketplaces the world over, and publisher of the Exchange Invest Daily Newsletter, wishing you a great week in blockchain, life, and markets.
Elliott’s Case Against LME To Be Heard In London During Week Of June 19
HK Exchanges: Overseas Firms In Stock Connect Is Major Game Changer
Bolsas y Mercados Argentinos SA Q4 2022 Results
SIX Reports Solid Results For 2022 Despite Challenging Market Conditions
Macedonia To Launch Power Exchange In May
Egypt’s FRA Makes Legal Amendments To Establish ‘Futures Exchange’: Chairperson
Black Knight Sells Unit To Address FTC Concerns On ICE Deal
Blackstone-Thomson Reuters Launch Sale Of $2b LSEG Stake
Eris Innovations Announces Strategic Investment Round To Capitalize On New Margin Treatment
NCDEX To Relaunch Groundnut Futures Trade Soon
The Financial Express
ICE To Host Carbon Credit Auctions For UpEnergy
Britain To Launch Review Into Attracting More Stock Market Listings
Perth Mint Faces London Bullion Body Review Over Gold ‘Doping’ Charges
Bloomberg Enters Agreement To Acquire Broadway
SEBI Unveils Framework For Adopting Cloud Services By Stock Exchange
The Indian Express
SEBI Seeks To Step Up Sway Over Boards Of Bourses, Clearing Corporations
The Hindu Business Line
ESMA Still Wants More Tools To Tackle Clearing Crises
China’s Financial Regulators Face Deep Pay Cuts After Revamp