086 Exchange Invest Weekly Podcast March 20th, 2021

TRANSCRIPT

        This Week in the parish of bourses and market structure, Exchange Invest surpasses 2000 issues and enters its third millennium. 

        This week it was 2001 an Exchange Odyssey. 

        Meanwhile, NYCE noted obvious market flaws, the CME made a creed occur for investor freedom, and the parish mourned the passing of serial CME Chairman Jack Sandner. 

        My name is Patrick L. Young.

        Welcome to the bourse business weekly digest. It's the Exchange Invest Weekly Podcast Episode 86. 

        Good day ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the weekend market structure. All the analysis of the week's many events and happenings can be found in Exchange Invest daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox. More details about the exchange of information at ExchangeInvest.com.

         Indeed the Exchange Invest marked a tiny milestone this week. Thank you for all the well-wishes we received as we burst through 2000 published issues. 

        Parish was the word I deployed to discuss our not quite a sector market infrastructure world as it became investable. And now we're in a new millennium 2001, an Exchange Odyssey began our third millennium of issues and was also the headline of an article on LinkedIn and Medium.

         Thank you to each and every one of you who have been subscribing and supporting over the years, what remains the only venture seeking to applaud and indeed appraise without fear or favor, the parish of exchanges throughout the world during the past eight years. 

        If you're not a subscriber while listening to this podcast, then drop by ExchangeInvest.com and sign up for a free 30-day trial, so you too can appreciate the Exchange Invest insight advantage, the exchange of information.

         With lockdowns still involved the world over and the European Union closing in on the sort of lockdown last seen during the Black Death, as it can't decide whether to vaccinate or not, delegates flocked online for V-Boca,  the FIA a is first virtual tribute to the Art Deco resort, which has seen better days in Florida, but every year seems to manage evermore inflationary prices. 

        Retail trading was one intriguing topic for the exchange leaders with Jeff Sprecher noting:

   “The regulatory structure of the US equity markets, in my mind, is flawed”

Meanwhile, CME’s Terry Duffy added: 

        “The public says we don't want to be protected from ourselves, so you have to give them what they want. I think that people want to be in charge of their own destiny”

         It's not the fact that Jeff Sprecher noted the US equity market is flawed, which intrigues me. Rather, it's the fact that this obvious statement still attracts headlines. Then again, I suppose things would be different if there were some more effective resolution by SEC to their past failures. Instead, we can probably expect more regulations to further cloudify Reg NMS’ Centrally planned Soviet System. 

        PLY: “So Jeff Sprecher stated the blindingly obvious and the media took note. Terry Duffy's remark is interesting, albeit cynics may swiftly retort that after the Cushing crisis, perhaps it suits the Chicago Mercantile Exchange to have a de minimis laissez-faire approach to retail investors well being.”

        PLY: “Approaching Terry Duffy's comments from a more charitable angle: the ongoing control freakery of the regulatory blob in trying to preclude the risk-taking of a retail mob is coming close to a denouemen, the best solution remains better education (see also this week's live stream IPO-Vid with Neil Cramond on YouTube.com, search for IPO-Vid).”

       PLY: “Education remains the best solution, not prevention from trading, which has been regulatory default mode that will merely drive investors outside of regulated markets, solving nothing and creating copious future problems.”

       PLY: “A curious Boca was always likely given its virtual status. It was remarkable to listen to the opening keynote by the de facto ‘EU Commissioner for protectionism in finance'' Mairead McGuines making blind assertions untroubled by fact. The attacks on two private clearinghouses were quite uncalled for and a vicious slander by such an official. So the solution therefore it would seem under Mrs. McGuines New World Order or at least new European order, is to have all that clearing in one German private company. How does that serve us better?”

        FIA’s Walt Lukken appeared remarkably craven in terms of kowtowing to the EU’s ongoing and so far rebuffed power grab for European clearing, which indeed continues to walk a coach and horses through the international legal system. 

        PLY: “I found that discussion disappointing, politeness and respect is one thing, seeming to give the EU’s agenda a wide berth when it is a trade war opener of the first degree, strikes me as worrisome.”
       
        Commissioner McGuinness repeated she is a “realist” - a tricky position given the current threadbare state of Euro-competence but as she noted on clearing: “I think changes are coming -we're not clear on the extent of that.” 

       PLY: "In other words, she may be talking the usual hyperbole, but ultimately recognizes that perhaps those two private companies in London will ultimately get the recognition they deserve permanently come the 2022 extension deadline."

       PLY: "Whereas Walt Lucan disappointingly appeared to be packing his clearing member's bags to send everybody straight to Paris or Frankfurt. The clear inferences that the FIA remains stubbornly locked on the wrong side of history, what a pity. Trade organizations are rightly being held in increasing contempt across London for their failure to foresee the future and particularly now to readjust to the Brexit new reality. Given its substantial presence in London, one can only wonder just how the FIA is so misaligned with the future when generally its political nice was historically solid in the past."

       PLY: "Of course, we assembled for the Virtual Boca against the background of the sad news of the death from a stroke of serial CME Chairman Jack Sandner."

       PLY: "The passing of Sandner marks the end of an era in the Chicago trading tale. His notorious disagreements with that other serial chairman of the early financial futures era, Leo Melamed is the stuff of legend. Ultimately, Jack Sandner oversaw many remarkable innovations at CME during his time as Chairman (let alone his extensive board time as well) and that hugely helped power the Chicago Exchange platforms forward.”

Big product news of the week Euroclear has successfully managed to unravel part of the ties of the Irish Stock Exchange with the London markets. Euroclear has shifted $119 billion of Irish stocks from the UK to the EU, out of crest and into the Euroclear system in Brussels. 

        Elsewhere, the Philippine Stock Exchange they've tightened the regulations on the backdoor listing and also announced some very interesting possibilities with the concept of dual share class listing. 

        In China, we're getting closer to a South-bound bond connect between the China foreign exchange trade system and the Hong Kong Exchanges organization.

        It was a busy week for results in the parish, all the deals were on 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:

        Which were encouraging numbers from Warsaw Stock Exchange, and their more recently listed counterparts in Tel Aviv. The latter showed a 17% increase in revenues resulting from higher trading and clearing revenue allied with strong cost controls which helped the bottom line. 

        In deals, Flutter the multifaceted betting business parent of the Betfair Exchange is considering a spin-out of its Fanduel subsidiary to boost its value. 

        Meanwhile, Canada's Peltoon Capital bought the proxy advisor Glass Lewis. Glass Louis's major competitor institutional shareholder services was of course acquired by Deutsche Bursa recently for $1.8 billion. Conflicts of interest continue to dog the perception of the DB1 purchase. 

        Meanwhile, the Cyprus bourse which has already partnered with the Athens Stock Exchange is potentially seeking a larger partner still ahead of its privatization. 

        Thus, of course, we have the Standard issue danger of Cyprus being subsumed and lost as the old exchange Island mentality issue of “someday my prince will come” syndrome looms large. Privatization is good, but Cyprus has more optionality retaining pure independence.

         Finally, in deals this week, MSCI the Index Provider and data company launched a private offering of $500 million of senior unsecured notes due 2030, redeeming an outstanding issue to and 2026 taking advantage of the low-interest-rate environment. 

        In new markets this week, we're looking forward to the end of March.

        I am delighted and excited to see FEX Global launching with CME as a clearing partner. FEX Global has been in a sort of ‘plain sight stealth mode’ for some time, and it will start trading on March the 26th, just five days ahead of another exciting new venture IFAD (ICE futures Abu Dhabi) the home of Murban futures.

         Based in Sydney's CBD FEX will be offering centrally cleared futures and options for the environmental energy and commodity product classes. 

        Meanwhile, Charles Li, the former Hong Kong Exchanges CEO has a new platform aiming to rev up funding for SMEs from the Special Administrative Region. 

        PLY: “What a great idea.”

        If you want more insights, don't forget that apart from our free Saturday newsletter and aside from our subscriber newsletter products Monday to Friday, there's our IPO-Vid LiveStream on Tuesdays at 1800, London time.

        Indeed London was in the headlines this week as it ranked number two amongst financial centers, once again in the latest Z/Yen Financial Centres survey.

        With London ranked number two and the European financial centres despite alleged encroachment on London's post Brexit markets have led ranking almost nowhere. There's obviously great food for thought in the Z/Yen index. 

         You can address your thoughts, questions, and comments about the Global Financial Centers index to its creator Sheriff Professor Michael Mainelli in the next IPO-Vid LiveStream coming on Tuesday. 

        If you've missed any of our streams in the past series, then drop into YouTube.com search for IPO-Vid for all the back issues. 
       
        In crypto land this week, Kraken Exchange is considering a stock market debut next year. 

        And while the Bank of Japan, as amongst many lay downers cryptocurrency plans, saw some interesting repricing of the Coinbase IPO. While valuations have been indicated as high as $90 billion in private market transactions recently, it appears that the IPO value is looking to settle closer initially at least to a 65 to $70 billion range as this podcast was being recorded. 

        In product news, the Shanghai Bourse is Studying Overseas Warehousing for its Bonded Copper Contract.

         Euronext has as I mentioned before confirmed the migration of Irish securities following Brexit from CREST to Euroclear Bank. 

        Good news from down under the New Zealand Exchange, they announced their strong uptake for the first New Zealand emissions options scheme in association with EEX.

         Technology this week, an interesting new platform has been announced powered by NASDAQ Purestream rather aims to turn conventional order thinking on its head. 

        PLY: “Will PureStream be the next big thing or could it be another Arizona Stock Exchange. It's a fascinating rethinking of the traditional block model.” 

        There was lots of green this week, in regulation.

        The USA is moving to set up more climate-centric reporting on the topic, while IOSCO Chairman Ashley Alder was absolutely correct in his recently repeated desire, as Reuters reports:

        “To stop companies from “greenwashing” - or painting a flattering picture of their compliance with sustainability goals - standard-setters want to replace the current patchwork of disclosures with a global approach.” 

        PLY: “The requirement is a relatively less prescriptive approach but nonetheless one which delivers some decent fundamental standards -as the current ‘pour a hundred tonnes of concrete, add solar panels and declare credentials of a wonderful Gaia level’ is in my humble opinion, a touch misleading.”

        Elsewhere Binance is apparently under investigation by the US CFTC. That news slipped out after Binance made a big announcement, hiring former Senate veteran Max Baucus to advise AKA lobby -  in Washington DC on Binance’s behalf.

         Baucus suspects that Binance might apply for US regulation while he's diceless accurate in what he believes and says the evidence, is that, Binance has a serial repetitive pattern to saying it will get regulated in particular jurisdictions and they're not doing so, even going so far on occasion as to deny any such discussion ever took place. 

        The Binance plausible deniability factor is high here as well. Baucus is an advisor, he has not CZ, apparently, Singapore-based Chinese founder of this highly decentralized Empire.

        Meanwhile, elsewhere in crypto news, orange jumpsuits are awaited at Bitmex:

        Bitmex Co-Founder Ben Delo has surrendered in the USA, he was released on $20 Million in bail, and we heard that the other Co-Founder of Bitmex Arthur Hayes has offered to surrender to US authorities in the near future in Hawaii.

        Rather more upbeat people news this week in Exchange Invest Edition 2001, we celebrated the vision and drive of Anat Guetta who has chaired the as really securities authority with gusto helping the Tel Aviv Stock Exchange better reflect the advancement of the “Startup Nation”.

        And that's ladies and gentlemen, with an exciting backdrop, the Global IPO Market Eyes record first quarter, even as sparks are faltering.

        We heard that this week, The Great Gatsby has raised millions to take on Robin Hood. 

        PLY: "That leads me to think I mean, Charles Schwab is so-called because “Chuck” Schwab reckoned rightly I suspect that folks trust Charles much more than a chuck with their investment funds. Nowadays, folks seem eager to give their money to the Great Gatsby or Robin Hood. I mean, at least the Sheriff of Nottingham had a castle and thus some sturdy real estate to protect his segregated assets."

          And on that mysterious and magnificent note ladies and gentlemen.

        My name is Patrick L. Young. 

        Thank you for listening to this 86th EI Weekly Podcast.

         Have a great week in the markets.

LINKS: 

Exchange Leaders Say GameStop Saga Highlights Regulatory Challenges
Reuters
Statement By CME Group Chairman And Chief Executive Officer Terry Duffy On Jack Sandner
PRNewswire
Jack Sandner, Longtime Chicago Mercantile Exchange Chairman, Dies At 79 After Suffering A Stroke
Chicago Tribune
Jack Sandner, Former Chicago Mercantile Exchange Chairman, Dies
Pensions & Investments
In Memoriam: John F. “Jack” Sandner, Notre Dame Trustee
ND Newswire
Euroclear Shifts $119 Billion Of Irish Stocks From UK To EU
BNN
PSE Tightens Regulation On Backdoor Listing, Announces Plan To Collect P5M In Listing Fee
ManilaStandard.net 
PSE Tightens Regulation On Backdoor Listing, Announces Plan To Collect P5M In Listing Fee
ManilaStandard.net
China 'Getting Close' To Southbound Bond Connect
Reuters
The Tel-Aviv Stock Exchange Reports The Results Of The Financial Statements For The Q4 And For 2020
PRNewswire
MSCI Launches Private Offering Of $500 Million Senior Unsecured Notes Due 2030; To Redeem 4.750% Notes Due 2026
Business Wire
MSCI Prices $500 Million 3.625% Senior Unsecured Notes Due 2030
Business Wire
Sports Betting Company Flutter Considers Spinning Out Fanduel To Boost Value
CNBC
Canada's Peloton Capital Takes Over Proxy Advisor Glass Lewis
Reuters
Cyprus Stock Exchange Privatisation Moves Forward; Partner Sought
Cyprus Mail
Launch Of FEX Global Australian Futures Exchange, March 26, 2021
FEX
Former Hong Kong Bourse Chief Li Plans New Microfinance Platform In 2021
Reuters
Asian Cities Challenge London For World's No. 2 Financial Center Title
Fox 40
Kraken Considering A Stock Market Debut Next Year
Nasdaq
Bank Of Japan Lays Down Cryptocurrency Plan
City A.M
Shanghai Bourse Studies Overseas Warehousing For Bonded Copper Contract
Nasdaq
Migration Of CSD Services For Irish Securities From CREST To Euroclear Bank
EuroNext 
EEX And NZX Report Strong Uptake At First NZ Emissions Trading Scheme Auction
HedgeWeek
Nasdaq To Host Stock Trading Venue For Purestream Trading Technologies
Reuters
PureStream’s Founders On The Recently Launched Purestream ATS
Nasdaq
Nasdaq To Deliver Execution Platform To Pure Stream
FinExtra
Get Used To Enterprise Value In Climate Reporting, Says Global Regulator
Reuters
Binance Under Investigation By Commodity Futures Trading Commission Over Derivatives Activity: Report
Yahoo Finance
Binance Probed by CFTC Over Whether US Residents Traded
Bloomberg
Changpeng Zhao Fires Back Amid Report of CFTC Probing Binance
The Daily Hodl
Crypto Giant Binance Weighs Registering With CFTC , Baucus Says
Bloomberg
The Tel Aviv Stock Exchange Is Getting The Startup Nation Upgrade
Forbes
BitMEX Do-Founder Ben Delo Surrenders In US, Released On $20M Bail
CoinGeek
BitMEX Co-Founder Arthur Hayes Offers To Surrender To US Authorities In Hawaii…
Nasdaq
Global IPO Market Eyes Record First Quarter Even As SPACs Falter
Bloomberg
The Great Gatsby Raises Millions To Take On Robinhood
TechCrunch