EXCHANGE NEWSWIRE, 13 April 2011
DB1-NYX deal documents were filed with the German financial regulator BaFin, which will start looking at DB1’s takeover of NYX over a period which could last 15 working days. The deal also requires approval from other European and US regulators, and while analysts expect competition hurdles due to the overlap in European futures and cash equity and US equity markets, they expect approval to be given ultimately.
NYX shareholders expressed skepticism of the NDAQ-ICE offer in a Reuters interview, and said that even though it was higher bid, “it’s uncertain what’s going to occur there”, and that “you’re getting cash, and you’re also getting two pieces of paper with lots of debt”. Shareholders were urged by ISS Proxy Advisory Services to support a proposal to let shareholders with more than 10% holdings to call special meetings to vote on the deals with either DB1 or NDAQ and ICE.
BATS named Mark Hemsley, who has been CEO of BATS Europe since 2008, as CEO of the proposed BATS Chi-X trading platform when the deal is finalized. The deal is currently under regulatory review, and is expected to be closed in 2Q 2011. Current Chi-X Europe CEO Alasdair Haynes will leave the company once the acquisition is completed.
TMX said in a group statement that rival Alpha Group’s new IntraSpread trading facility, which will start trading before the summer after it received regulatory approval last week, does not provide “fair and full access to all market participants, visible price discovery and meaningful price improvements for internalized orders”. These concerns were dismissed by Alpha CEO Jos Schmitt.
JSE plans to offer co-location services “to offer low-latency trading and reduce connectivity risk”. The Equity Market trading engine will be relocated from London to Johannesburg by 1H 2012, and this will allow co-location services which will be supported by MillenniumIT’s trading software. JSE COO Leanne Parsons expects trading volumes and liquidity to increase, as it attracts “a new segment of clients, boosting levels of algorithmic trading activity”.
LME selected Equinix to provide it with proximity services, and the exchange opened its first access node located in Equinix’s London International Business Exchange (IBX) data centre. LME members will now be able to directly connect to LMEselect, which results in a large reduction in connectivity costs.
Knight Capital plans to launch its “Knight Match” European dark pool, which will matches orders from retail, institutional and algorithmic trades. A launch date was not stated.
FSA stated that it does not intend to support the European Commission’s proposal of “looking through lines of code” before signing off HFT algorithms, because it creates a potential “moral hazard” should something go wrong. ESMA is currently holding “small meetings” with trading venues to come up with the best solution to regulate algorithmic trading.
CFTC and SEC will receive a budget increase from the US Congress, which imposes $38b in cuts on many federal agencies but adds $74m to SEC and $34m to CFTC, allowing both US regulators better monitor and supervise the financial markets.
CFTC and SEC will jointly hold a two-day public meeting starting May 2 to “discuss the schedule” for implementing the final derivatives market regulatory rule. The “roundtable will provide the public with the opportunity to comment on whether to phase implementation of the new requirements” and is meant to “supplement the comments received to date”.
CFTC voted 4-1 in favor of rules that would exempt companies such as manufacturers from requirements to set aside margin to reduce execution risk when dealing with non-bank dealers or major swap participants. CFTC’s proposal will be released for public comment before final approval.
Provided By: Equity Research Desk, www.erdesk.com
To view our exchange reports and articles on your PDA or mobile device, click here.
-----
About FMX: FMX Connect is an information, data, and analytics portal for Commodities. The portal provides an all-in-one package including essential market data, independent third party research, industry news, and commodity trading tools. FMX Connect provides efficient, effective, and thorough data that bridges all aspects of commodities onto one screen. The Result; A user friendly application for hedge fund traders, OTC brokers, individual investors, and industry participants.
-----
Note: The information presented, while from sources generally believed to be reliable, is not guaranteed and may not be complete. FMX | Connect makes no representations or warranties regarding the correctness of any opinions or information. Past results are not necessarily indicative of future results. Nothing in this report should be construed as a representation to buy or sell shares, futures or options, which contain considerable risks. For internal client distribution only. Any reproduction, re-transmission, or distribution of this report without permission is prohibited. Media correspondents or reporters may not quote any one page or section in its entirety and must attribute all quotes, ideas or concepts herein. Copyright FMX | Connect, ©2009-2010. All rights reserved.