151 Exchange Invest Weekly Podcast July 9th, 2022

Transcript

This week in the parish of bourses and market structure:

MICA is born: the European Union have created crypto regulation

ICE CDS, their CCP is moving to the USA

…and Hong Kong Exchanges make a great Connect leap forward as the LSEG loses another senior staffer.

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 151.

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 from the past seven 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.

SEBI has been back in slamming and fining once again, the NSE ‘dark fibre’ case part of the “Holy Hoax” fiasco saw Chitra Ramkrishna, the NSE itself and 16 others found guilty in the plethora of cases pertaining to this ongoing fiasco.

Overall, we published a note this week on the “Holy Hoax” fines: they now total over $7 million. You can read that on LinkedIn Medium, and of course, days earlier, you could read it in the Exchange Invest newsletter!

Over in Hong Kong, they’ve had some excellent news. True, there might be issues in terms of the number of IPOs right now, but in the wake of a visit from Premier Xi, the great news is that the exchange is live working ETF Connect and… coming soon… perhaps the most exciting of them all they’re going to have Swap Connect joining the yield curves of China and Hong Kong.

Seismic news as well from ICE (Intercontinental Exchange): will cease CDS clearing in London in March 2023. They announced that ahead of the Independence Day weekend. It’s nothing like the false attributions of Paul Revere’s pithy shouts, “the English are coming” rather it’s more like “Take your CCP before Brussels makes another kamikaze move”.

Top marks on this to the consistently excellent Huw Jones of Reuters who scooped this story in March.

The European Union: that may have a degree of spurned spouse joy at pushing a line of CDS clearing ex-London, but in the end, Europe is the loser here and this ought to be a serious shot across the bows of all – including that stubborn and hyper-ambitious Commissioner McGuinness: the parish is a global market and Europe just isn’t the place people want to be forced to do business.

New markets this week, the Hindustan Power Exchange, they’ve got final Sebi approval to start operations while Kenya is in a partnership to set up its first carbon exchange. AirCarbon Exchange is going to be joining the Nairobi Financial Centre and the Nairobi Stock Exchange to create the first carbon offset exchange in the country. Excellent move for ACX on that one and also great news from the Nairobi Financial Centre.

Deals news this week, well Fonterra, NZX and EEX have confirmed their GDT (Global Dairy Trade) strategic partnership: excellent deals all around. Elsewhere Land Bank are leaving their acquisition bid for the bond trading platform PDEX in the Philippines up to the incoming President Ferdinand “BongBong” Marcos.

Crypto exchange FTX – they’ve been rescuing just about everything that’s going recently the latest is a $640 million deal that they’re going to be acquiring BlockFi. That led to an excellent headline and ZeroHedge: Does Sam Bankman-Fried Own Everything Now that was their recap of last week’s top crypto news. Has to be said – as I noted previously in Exchange Invest – with the various endeavours of Sam Bankman-Fried’s organisation, one is left to realise that $250 million spent here, $250 million spent there, $650 million spent hither and thither… Sooner or later you’re talking about real money.

Talking about real money, how do you understand the future of money? Don’t forget to pick up a copy of my book “Victory or Death?” – Blockchain, Cryptocurrency and the FinTech world. That’s published by DV advisors and it is distributed by Ingram worldwide. Don’t forget while you’re waiting for that copy to arrive, you can always pick up online the highlights from the most recent IPO-Vid and they’ve been some absolute crackers recently, including most recently Mark Schaedel: Defending The Data Economy. Coming up after the Independent Day break on July 12th at 1pm Eastern we’re going to have John Kim discussing “CBDC & The Future of Money” stay tuned. You can find those on LinkedIn, Facebook and YouTube live. Highlights are on YouTube.com search for IPO-Vid.

In crypto land, Coinbase are seeking licences across Europe as they look to ramp up growth in the wake of losing 18% of their payroll in swinging salary cuts recently. In addition to the headcount cuts, we’ve had some huge problems across the crypto sphere this wee, multiple different exchanges and market platforms are unable to allow people to withdraw their hard-earned digital currency.

Technology news this week, very interesting to see what’s happened with dYdX. They become the first major crypto derivatives exchange announcing that they will leave the Etherium ecosystem and launch their own blockchain. That’s an encouraging vindication I feel of my ‘it’s so last year’ thesis on version 1.0 blockchains. I hope vendors touting their all singing and all dancing but Ether-centric/reliant blockchain solutions will be taking note.

Regulation news this week, of course, dominated by MICA, the European Union reaching agreement on a strict crypto regulation requiring data collection that data deal has been struck to regulate cryptocurrencies and their infrastructure with firms operating in an EU state given 18 months after the start date at the end of 2023 to get their MICA licences without disruption to services.

Career Paths this week, confirmation from ICE of a slate of promotions. Most notably those we’ve covered previously. Stuart Williams heads up from heading the European offices to become ICE’s new global COO, Trabue Bland is ICE’s Global Futures Exchange Head, Chris Rhodes becomes ICE Futures Europe President and a new announcement, all the very best to Chris and equally a new announcement Jennifer Ilkiw is going to become ICE Futures U.S. President. You can of course catch Trabue Bland from IPO-Vid Episode 058 via all the usual platforms.

Big shock, the LSEG, the head of data has left after a year in the job that Andrea Remyn Stone. She’s stepped down from the role of Group Head, Data & Analytics, which was previously occupied by the Refinitiv CEO David Craig. It is a bit of wonder the idea that you have one single department that seems to be 65% of the revenue. The problem here could well have stemmed from the fact that it’s not 65% of the growth. In fact, it doesn’t seem to be any of the growth whatsoever and certainly, Andrea Remyn Stone, with her empire building did seem to have created some problems for herself, hardly demonstrating the most resolute activity in terms of cost containment, let alone cost reduction.

Meanwhile, the LSEG issued a note which kept insisting that everything was going terribly well, terribly well, terribly well, terribly well and again, and again and again, the more often the LSEG repeat this, the less credible it sadly seems. At the same time ladies and gentlemen, it’s very interesting to compare a tale of two defaults in this world. Argentina has run out of hard cash, Russia has run out of the Western financial system and meanwhile, China has taken note and created a new facility for the Bank for International Settlements. Watch this space, mega, macro-political developments are taking place in front of our very eyes.

And on that mysterious and magnificent note ladies and gentlemen, my name is Patrick L. Young, I wish you all a great week in blockchain, life and markets. The Exchange Invest weekly podcast will return for episode 152 next week.

LINKS

Sebi Slaps Heavy Penalties In NSE ‘Dark Fibre’ Case, Bourse Fined Rs 7 Cr
Business Standard

Chitra Ramkrishna, NSE, 16 Others Found Guilty In Dark Fibre Case; Fined
Times Now

ICE To Cease CDS Clearing In London In March 2023
Reuters

Hindustan Power Exchange Gets Final CERC Approval To Start Operations
Saur Energy International

Kenya In Partnership To Setup Its First Carbon Exchange
Capital Business

Fonterra, NZX And EEX Confirm GDT Strategic Partnership
Scoop NZ

Landbank Leaves Acquisition Of Bond Trading Platform Up To Bongbong Marcos
Inquirer Business

Crypto Exchange FTX US Rescues BlockFi With $640 Million Deal
Coinfomania

Coinbase Seeks Licenses In Europe As It Looks To Ramp Up Growth Outside The U.S.
CNBC

A Major Crypto Exchange Abandons Ethereum: Is The World’s Computer Falling Behind?
Nasdaq

EU Reaches Agreement On Strict Crypto Regulation Requiring Data Collection
South China Morning Post