Apr 8, 2023 9 min read Exchange Invest Weekly Podcast

188 Exchange Invest Weekly Podcast April 8th, 2023

Alasdair Haynes of Aquis is going from strength to strength despite London’s soggy equity market. The BMLL lake has become a global data ocean.

Transcript:

This week in the parish of bourses and market structure:

LIBOR Lives!

Alasdair Haynes of Aquis is going from strength to strength despite London’s soggy equity market

The LME published their Nickel review and more

The BMLL lake has become a global data ocean

In Bitcarnage: It’s a case of BBC – Beaxy Breaks Coinbase but all we really want to know is who is the Binance mole?

My name is Patrick L. Young

Welcome to the bourse business weekly digest

It’s the Exchange Invest Weekly Podcast Episode 188

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.

Over in Bitcarnage this week: The SEC charged crypto trading platform Beaxy and its executives for operating an unregistered exchange broker and clearing agency.

You’ve never heard of Beaxy. I have never heard of Beaxy. However, we now have the playbook template of precisely how the SEC intends to take down Coinbase.

There was a notable remark in the accompanying documentation from SEC Chairman Gary Gensler: “Our securities laws for decades have served to protect investors, make capital formation easier and cheaper, and improve our markets. This case serves as yet another reminder to crypto intermediaries that their business models must comply and adapt to the law, not the other way around.”

Now there is a biggie: While maintaining a remarkable shapeshifting approach over the generations, the SEC is deploying all its tools from the Howey Test to the epic LBRY precedent of last year (which as I noted at the time in Exchange Invest and on this podcast would return in seismic fashion…). Incidentally GG just opened a chasm to Rostin Behnam at the CFTC who’s convinced he needs new regulations. GG saying he will just use what’s already in the toolbox.

In another Bitcarnage news, we reckon the Binance mole is former Binance.US CEO Catherine Coley, but to understand “why?”…Well you need a subscription to Exchange Invest or here’s the exciting news, if legacy exchanges aren’t your thing, but you want to keep abreast of crypto, then you can subscribe to our Substock “Bitcarnage”.

In the world of legacy exchanges this week, the LME Group announced its action plan to strengthen its markets. LME is somewhat linking/tethering into QME (Hong Kong Exchanges mainland Chinese commodity spot subsidiary exchange). It’s an interesting approach as LME tries to find ways forward for Nickel in a world where battery demand drives secondary market qualities below the LME’s primary quality existing products.

There’s a lot to unpack in this report, and LME are clearly trying hard to address many issues arising from the Nickel nightmare and the subsequent Oliver Wyman report.

Down under, “The ASIC Moves Should End the ASX Chairman’s Tenure”, says the Australian Financial Review (AFR).

The drumbeats are rising in Sydney as calls grow for the head of the ASX chairman in the wake of the CHESS replacement fiasco. Exchanges need to be held to account to a high standard.

It was a busy week in result this week. All the details were in Exchange Invest. Let’s pick a couple of highlights.

Aquis Exchange net revenue +24%, underlying profit 41% higher and reaching a very healthy £4.7 million. Terrific results for Aquis with a very meaningful bottom line profit being generated at last. Well done to Alasdair Haynes and the team.

Over in the Channel Islands, TISE have reported record-equaling turnover for 2022. Their profits -13.2% on the year. A downtick after a stellar 2021 for the Channel Islands-based exchange.

Meanwhile, in Caracas in Venezuela, the Bolsa de Valores de Caracas, they doubled to 200,000 Bolivars, the capital of the exchange.

Meanwhile, in new markets, from the new new things to a very old thing indeed being reborn, Qatar, they’re going to be introducing options and futures in their new derivatives exchange, according to the regulator.

Japan’s historical futures market has been reborn as a precious metals exchange. The Osaka Dojima Exchange which closed in 1939, after an illustrious history dating back several centuries, has returned not trading rice, but trading all forms of precious metals.

Albania have launched the electricity exchange ALPEX.

Gemini are preparing an overseas derivatives exchange to offer ‘perpetual futures’. That, therefore, means that Coinbase and the Winkelvii are looking to launch exchanges overseas / in Europe to escape the US regulatory climate. I’m rather unconvinced they appreciate that the world is now crypto-cynical unless or until we see a crypto Version 2.0.

If you’re trying to understand how we get to crypto Version 2.0 then you need my most recent book “Victory or Death?” Blockchain, Cryptocurrency and the FinTech World. That comes 20 years on from the “Capital Market Revolution”. “Victory or Death?” is published by DV Books and distributed by Ingram worldwide.

While you’re waiting for your copy of “Victory or Death?” to arrive, check out our livestream Tuesday 6pm London, 1 o’clock New York time – the IPO video live show. Catch the back episodes on LinkedIn and YouTube via IPO-Vid.

Coming this week, we’ve got a repeat of very interesting discussion about cloud based exchanges with the good folks of Exberry. Most recently, we had IPO-Vid 101 which was absolutely magnificent with the CNBC star Bob Pisani live from the New York Stock Exchange Shut Up and Keep Talking! All about his book and his illustrious career, including a generation at the heart of the capital of capital markets, the New York Stock Exchange.

Coming on April 18th, we’re going to have Jim Oliff, former Vice Chairman of the Chicago Mercantile Exchange. He’s going to be discussing “Markets In Electronic Transition”. Don’t miss it.

In the meantime, don’t forget to catch up on all of our back episodes. You can find them on YouTube via IPO-Vid.

In crypto land this week: The Stuttgart Stock Exchange has managed to secure a BaFin licence for crypto custody for their crypto unit.

In product news: NASDAQ is introducing a regular auction model to support less liquid shares on the NASDAQ First North Growth Market.

That’s something PLY has been advocating for SME stocks for years now. It’s good to see NASDAQ moving forward with their auction plan where the Channel Islands TISE has an auction-only secondary market platform.

Libor lives, the UK regulator the FCA requiring ICE benchmark administration to keep publishing a synthetic US dollar LIBOR. It’s another one for the “why did we bother?” category LIBOR replacement is one of the great wastes of time forced upon markets by an eager whataboutery cabal of politicians and regulators, neither of whom took the time to think anything through.

Technology news this week: Tradeweb has completed the final technology milestones of integrating the NASDAQ US Fixed Income electronic trading platform.

CBOE Australia has completed the technology migration and launched its first new Australian offering. Great to see Vic Djokovic heading out the door soon on this high note and more significantly, well done Mike Aikins and the modest team of tech boffins in Cboe APAC/ Oz who have made this smooth transition.

Aquis has launched the world’s first regulated market grade 24×7 exchange market infrastructure.

Swiss central bank is launching a probe into a malfunction at the Zurich exchange operator SIX.

Congratulations in technology finally to BMLL. They have expanded their data coverage to APAC. The first time under Level 3 data I am reliably informed is available on a global basis by my pointy headed friends kayaking across their 15 petabyte and more lake of data at BMLL.

Regulation news this week: We had a budget bus stop. The SEC is seeking $2.4 billion in total (that’s a 13.4% increase).

The CFTC seeking 12.6%. There’s a tiny percentage difference in the increase requests, but perhaps the most interesting element is the way the SEC has concluded they can go regulate crypto and crypto needs to put up or shut up while complying. At the same time Chairman Behnam of the CFTC has demonstrated what I think alas, is his ongoing gift for misreading the room, is asking for more rules, and more rules just as Congress is hoping the world can ignore that Congress ever listen to a word of this crypto stuff.

Career path this week: DTCC announced several key leadership appointments: Susan Cosgrove has become President, Clearing and Security services, Timothy Keady has become Chief Client Officer, and Renee LaRoche-Morris is CFO.

CME Group has appointed Tim McCourt as Global Head of Financial & OTC Products.

Peter Reitz is bifurcating his role at EEX. He is bringing in a new CEO for the clearing house ECC, the former EEX Strategy Officer Tobias Paulun. All the very best to both men in the future.

Meanwhile, finally this week in career paths, the Caracas Stock Exchange has appointed a new board of director Gustavo Pulido Medina has been elected as President, Marco Gasperini as Vice President, and Andrés Octavio as Secretary while Horacio Velutini has joined the Board as an Independent Director. All are going to be serving a two-year term.

It’s slightly longer than a two-year term, I think it’s a four-year term in Chicago’s mayoral race, things are heating up as we head towards the final round runoff between the two leading candidates. That’s led to a great deal of concern.

“In desperation, taxation” could be the motto for many running for mayor in Chicago. Thus we have candidates Vallas (Illinois is a one party state – there were 50 shades of Democrat in the mayoral race) originally. Candidate Vallas used to run the schools (that’s definition of a role in Chicago, which involves appreciating adversity through the perversity of operation).

Candidate Vallas is up against some truly wild leftie of the lunatic fringe school of thought. Indeed, he also happens to be the man backed by the unions of teachers. Thus, it’s time for a financial transaction tax, says this loony left dude Brandon Johnson, that’s the man supported by the Chicago teachers union.

Now there’s a school of thought here that if these people are so economically illiterate then educate…well actually, let’s just not go down the line of discussing education sticking to markets Chicago et al.

A leftist concern has emerged that the folks with the money in Chicago (AKA very often traders) are against this financial transaction tax. My moles on the ground in Chicago so you can spot the upscale areas of the city these days as they have all sprouted “Vallas for Mayor” placards as soon as the dismal incumbent Lori Lightfoot was booted out of round one. Left wing in commentary is inferring that Mr. Vallas to the right of Attila the Hun.

For the rest of us. It’s hard to see why anybody is going to stay in Chicago if your company is called, say “Merc” or “exchange”…Not everybody yet lives in Florida, but things could change.

Essentially this vote boils down to, ‘do you prefer a chance at – maybe – slightly pruning/reining in the outrageous spendthrift engine of government in the municipality? Or would you prefer a future running the gauntlet through a wasteland of empty buildings in the (perhaps forlorn) hope the Billy Goat Tavern can still play its trade?’.

For those struggling with the concept of transaction taxes, just remember the old doctor’s start again just remember the old doctor’s maxim “A dollar FTT per trade keeps the market away”.

And on that mysterious and magnificent note, ladies and gentlemen, my name is Patrick L. Young creator of marketplaces, publisher of Exchange Invest and publisher of the new Substock “Bitcarnage”.

I wish you all a great week in blockchain, life, and markets. Happy Easter!

LINKS:

SEC Charges Crypto Trading Platform Beaxy And Its Executives For Operating An Unregistered Exchange, Broker, And Clearing Agency
SEC

LME Group Announces Action Plan To Strengthen Its Markets
LME

ASIC Move Should End ASX Chairman’s Tenure
AFR

Aquis Exchange PLC – Full Year Results Highlights
Aquis

TISE Reports Record-Equalling Turnover For 2022
TISE

Bolsa de Valores de Caracas C.A. Ordinary Shareholder Meeting
Bolsa de Valores de Caracas

Qatar To Introduce Options, Futures In New Derivatives Exchange – Regulator
Reuters

Japan’s Historical Futures Market Reborn As Precious Metals Exchange
Nikkei Asia

Albania Launched Electricity Exchange ALPEX
Serbia Energy

Gemini Preps Overseas Derivatives Exchange To Offer ‘Perpetual Futures’
The Information