iStock_000005765286XSmallEXCHANGE NEWSWIRE, 8 September 2011

DB1-NYX merger: NDAQ warned that the proposed deal would seriously limit potential new competitors from competing to a “significant degree in respect of products currently already offered by Eurex or Liffe because of the stickiness in liquidity in derivatives market”. NDAQ also stated that while Eurex and Liffe offered complementary products, the combined expertise and position of both markets would create a substantial barrier to entry.

Bombay Stock Exchange (BSE) launched a market making scheme to generate more investor interest in derivatives, which has the Sensex index as the underlying. The Liquidity Enhancement Incentive Programs (LEIPS) will reward derivatives members for creating a “healthy” order book aimed to create “lasting, self-sustaining liquidity in BSE’s derivatives segment”.

AMTD CEO Fred Tomczyk said that the online broker was not interested in acquiring the assets of E*Trade, as “we’re really not interested in the assets”, according to the Wall Street Journal. Tomczyk also stated that “I would see TD only paying a reasonable price, not an optimistic price because there are some issues in that asset”.

TABB Group established a study forecasting that HFT firms will use the new trading platforms created by incoming European regulation to increase European options trading. Another study by TABB found that European investors account for 10% of US options trading, and demand will grow as hedging demands increase.

UK government did a study which found that there is “no direct evidence” that HFT increased market volatility or impacted “market efficiency”. However it was found that HFT could create temporary drops in liquidity.

CFTC may propose the implementation of swaps clearing and trading rules, according to Bloomberg. CFTC is also expected to consider a second proposal governing documentation and margining rules for swap market trades.

European Commission will impose a non-negotiable regulation on member states to ensure competition, in addition to its planned revisions for MiFID II. The draft regulation currently includes rules regarding pre- and post-trade transparency and related data-reporting standards, new powers for the European Securities and Markets Authority (ESMA) to coordinate national regulatory actions and OTC derivatives reform.

 

Provided By: Equity Research Desk, www.erdesk.com

 

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