EXCHANGE NEWSWIRE, 27 July 2011
Brazil’s government will impose a 1% IOF tax on the notional value of any FX derivatives sold or bought in Brazil by both local and foreign investors to contain the Real’s appreciation, according to a decree published in the Federal Register. Brazil’s National Monetary Council (CMN) will also work on changing regulations in the market, according to Wall Street Journal, and the measures could also include deposits and limits on derivatives positions. Wall Street Journal also mentioned that Brazil will charge a 6% tax and fine institutions that pay off early overseas loans with terms of two years or longer.
NDAQ reported 2Q11 adjusted EPS of $0.62 (+19% y/y) versus consensus of $0.60; on net revenues of $416m (+7% y/y) and adjusted expenses of $229m (+11% y/y). During 2Q11 its US cash market share was 22% and US derivatives market share was 29%. NDAQ CFO Shavel stated that NDAQ is in a position to reduce its outstanding debt, and NDAQ guided FY11 expenses to be $910m-$925m, excluding $40m in merger-related and other infrequent charges.
LSE told market participants that combining DB1 and NYX will “create a single provider of derivatives trading and clearing in Europe, eliminating competition for trading and innovation between them”. LSE also noted that “today, Eurex and Liffe compete head to head in European single stock options and OTC trade reporting and through new product and service development”, but “this will all be lost” with the merger.
NDAQ supported LSE’s comments that the DB1-NYX merger would eliminate competition, stating that “the creation of the merged entity would have a tremendous negative impact on competition in the European derivatives landscape, and if approved, would create a monopoly that would be able to dictate the market for years to come”. NDAQ expressed that the merger “would not serve the best interests of the users of the European derivatives markets”.
Instinet achieved a spread reduction of 8.2% and a price improvement of 0.68 basis points on best displayed prices in 2Q11, according to an analysis by Intelligent Financial Systems (IFS). Instinet estimates that based solely on its dark pool trades, its average price improvement may have been 5 to 6 basis points. IFS’ analysis also stated that Instinet’s achieved the best possible displayed price in 99.9998% of the time. Instinet also said that the majority of cases, the best price for a UK equity trade was provided by a venue other than the LSE.
CFTC appointed Tony Thompson as the regulator’s Executive Director, replacing Madge Bolinger Gazzola who retired after 35 years of service with CFTC. Thompson was most recently the Deputy Administrator of the Office of Management at the US Department of Agriculture’s Food Safety and Inspection Service (FSIS).
SEC voted unanimously to set up a large trader reporting system to collect data from traders such as hedge funds and banks, which transact two million shares or $20m a day, to better investigate stock market swings like the May 6 “Flash Crash” in 2010. The large traders will have to identify themselves with SEC and each will receive an identification number that will be provided to their broker-dealers, which have to maintain information and present it to SEC when requested.
Provided By: Equity Research Desk, www.erdesk.com
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