152 Exchange Invest Weekly Podcast July 16th, 2022

Transcript

This week in the parish of bourses and market structure:

Hong Kong Exchanges planning a carbon market while EEX is endeavouring to add more data transparency to hydrogen.

Miami Exchanges wins patent WhiteWash

Zagreb increases its Macedonian stake

…and in the daily newsletter of the bourse business, it’s time for Buck Rogers, we’re in the 25th century of our daily newsletter.

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 152.

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 and happenings of 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.

Leading our stories this week, the EEX (European Energy Exchange) they’re developing Hydrogen market transparency alongside TYCHO solutions.

Meanwhile, the Chinese tycoon known as ‘Big Shot’ in local commodity circles in the Chinese market, whose bet broke the nickel market and according to the South China Morning Post last week, that bet while doing a great deal of damage to the nickel market itself, and indeed the reputation at least in the short term of the London metals exchange. Well, he’s managed to walk away a billionaire despite taking a $1 billion loss.

Miami Exchange’s they are celebrating Miami International holdings won their patent case against Nasdaq; all asserted patents invalidated and patent claims permanently dismissed with prejudice. That’s a big win for MIAX particularly as it eyes an IPO. One wonders where their preferred listing venue is?

Over in India, well, the plot gets thicker and thicker. In the same week that we produced a very interesting article you can catch it on medium and LinkedIn all about the leading fines that have been applied to the major actors in the ongoing “Holy Hoax” fiasco. It turns out there is more, more investigations nowadays. The CBI that’s (the Indian fraud squad) they are probing suspected phone tapping of stock exchange employees that went back over some 8 years. Former Mumbai Police Commissioner Sanjay Pandey is also embroiled in the latest spiral of the NSE descent into a place where even most political organisations look more credible. In the mainstream co-location case, the CBI (Bureau of Investigation of India) they have opposed Anand Subramanian’s bail. Meanwhile, the CBI is also going to be questioning former CEO Chitra Ramkrishna in that phone tapping case.

Over in Sri Lanka, the SEC there they’re calling for RFPs for the building of a CCP (Central Counterparty Clearing System). Cooperation in the Middle East, Bahrain bourse and Abu Dhabi Securities Exchange (ADX) have launched Tabadul. The Tabadul Exchange hub will be providing all manner of information and related services in order to try and link investors between Bahrain and Abu Dhabi.

Brexit news this week, obviously overshadowed by the electoral hustings for the UK Prime Minister Boris Johnson standing down there and as Alasdair Haynes, the CEO of Aquis Exchange notes this week: “My concern is the Financial Services and Markets Bill will not be passed before the summer recess of Parliament”.

There is clearly a concern as the UK really needed an outbreak of government and right now we see a situation where many including the looney remain fringes think they can undo Brexit…that’s leading to fear uncertainty and doubt once again, which is way more dangerous than whatever the Financial Services and Markets Bill can involve.

It was a busy week for new markets in the exchange parish. All the information was in Exchange Invest daily, the watercooler of the bourse business, 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.

Exciting news from Hong Kong, the Hong Kong Exchanges are looking to launch the Hong Kong International Carbon Market Council and that council is going to therefore lead to a carbon marketplace. Presumably from Hong Kong (the SAR) extending into the Greater Bay Area. Exciting partners there, their global carbon market will include HSBC, ANZ and Tencent.

Over in India, great news, a third power exchange has launched the Hindustan Power Exchange backed by the Bombay Stock Exchange, BSE and PTC commenced operations during the course of the week.

Meanwhile, it was a busy week for deals in the parish, of course all the deals were in Exchange Invest daily, the newsletter no person can afford to be without in capital markets and market structure. Edited highlights this week, well EToro their attempt to drop themselves into a SPAC has fallen through. Online investment platform EToro and blank cheque company FinTech Acquisition Corp V have pulled the plug on their planned $10.4 billion Spac deal.

Elsewhere Finalis, a technology platform for dealmakers announced a sizable seed funding round, a fairly spectacular $10.7 million for the US-based technology platform. Zagreb Stock Exchange hot on the heels of news that they were allowed to increase their stake in the Macedonian Stock Exchange, they have acquired additional shares and they now hold 21.99% thus becoming the largest shareholder in the Macedonian Stock Exchange. Finally, this week in deals news, over in Argentina Matba Rofex, they’ve acquired the Argentine FinTech, Lumina Americas.

If you’re looking for some more insights into just what’s going to be happening in the future of the world of FinTech, then pick up a copy of my latest book “Victory or Death? – Blockchain, Cryptocurrency and the FinTech World, 20 years on from the excitement of the original FinTech best seller “Capital Market Revolution!”. It’s time to look at some of these loose strands which have been hanging around and need a spotter perspective. Whether you are an exchange parishioner, a financial professional, a FinTech professional, or anybody just trying to stay abreast of where technology is now driving investments and finance. “Victory or Death?”- Blockchain, Cryptocurrency and the FinTech World is published by DV Books and is distributed by Ingram worldwide.

Meanwhile, while you’re waiting for your copy of “Victory or Death?” to arrive, check out our Livestream, that’s Tuesday at 6pm London, 1pm New York time the IPO video live show. Catch the back episodes on LinkedIn and YouTube via IPO-Vid. Our last show included the brilliant John Kim discussing “CBDC & The Future of Money” from his position as Chief Strategy Officer and co-founder of Movmint, a specialist provider of CBDC, know how and software. Next week, we’re looking forward to the excitement of discussing the Financial Cold War with author and former vice president of Hong Kong Exchanges James Fok.

In crypto land, the crypto exchange Bitstamp, well, they had a fabulous Volte face during the course of this week. One day they said they were going to be charging inactive accounts, a fees starting August 1st, within 24 hours that had been turned over they cancelled plans to charge inactivity fees. If nothing else, this tells us ladies and gentlemen of the desperation of crypto exchanges to cover their costs as income dwindles during the ongoing deep freeze of crypto winter.

Talking of crypto winter, I’m not sure I’m entirely confident when I hear things like well, there was a headline this week in Yahoo Finance Insider Reveals Huobi Global’s Operations Are Stable, In Spite Of Market Rumors, not really sure that’s going to necessarily help deliver greater confidence although I must admit I have no idea what is the financial state of Huobi Global and I’m certainly not about to cast aspersions on their balance sheet. Meanwhile, a lot more news from Reuters, also reported in Coindesk, Cointelegraph and across the crypto media. Binance failed to deliver on money laundering prevention promises and indeed according to the Reuters articles Binance allegedly continued to serve Iranian customers despite a ban and sanctions.

Product news this week, the Warsaw Stock Exchange want to tokenize a physical art. Those are going to be fungible tokens, not NFTS. Meta meanwhile, they’ve given up on their great currency expansion they’re going to be shutting down the Novi Wallet, which reminds us all the dotcom bubble peak was where Microsoft (remember them?) They still have well some legacy installations across the world of IT. They were rumored Microsoft at the peak of dotcom bubble to be looking at banking. Now it appears Facebook have been entirely withdrawn from their plan to engage with the future of money.

Elsewhere LCH EquityClear SA in Paris they’ve gone live with their new value at risk margin mobile for cash equities.

Technology news this week, a hacker one hacker claims to have stolen a billion records of Chinese citizens from the police. That’s quite a spectacular number when you think about it, there are only about 5 billion people online so in one fell swoop apparently, somewhere in the region of 20% of every person who’s on the interweb on the entire planet has their records in the hands of one group of nefarious hackers?

Over at SIX, the Swiss Digital Exchange, they’ve announced a collaboration with Fireblocks to provide institutional grade infrastructure services for regulated intermediaries and institutional investors. Meanwhile Archax they’re partnering with METACO to expand their institutional digital asset custody offering on IBM Cloud. A lot of people have been worried in the European Union about the settlement discipline regime recently that’s why Clearstream have launched its data solutions to deploy some very swift and clever AI to predict settlement failures and foster settlement efficiency. What an excellent idea. Finally this week in deals, ING the bank they’ve spun out their pick toward digital assets technology to GMEX Group.

Regulation news this week, ESMA they’ve been updating on their third- country CCP applications for recognition after some delays, the EU is back looking at equivalents for CCPs and Argentina, Colombia, Russia, Taiwan, Thailand and Turkey for different reasons need to reapply (albeit, in a note in Moscow, whatever you do, it won’t matter because the Ukraine invasion Trump’s sound clearing practice)

However, Chile, China, Indonesia, Israel and Malaysia are all on their way to equivalence – which of course raises the obvious protectionist hypocrisy of how e.g China, without a freely tradable currency is equivalent forever whereas the UK, the home of the world’s largest most cosmopolitan financial centre in the City of London isn’t the last chance three-year deal. The European Union degrades its credibility with such a juvenile act – and probably doesn’t help encourage investor confidence in the EU currency, which has again reached parity with the US Dollar as I record this podcast.

Career paths news this week, very interesting news coming out of Hong Kong and that’s Ashley Alder who only relatively recently announced a new term as the boss of the SFC (Security and Futures Commission) of Hong Kong, their financial regulator. He is going to be moving to the UK to become the chairman of the UK regulator, the FCA while he maintains as chairmanship of IOSCO (International Securities Regulatory body) that’s quite a surprise to hear him moving so soon and it’s going to be a very, very interesting period of tenure as he tries to reorganize and get the FCA, which has been somewhat discredited late back into a more ship ship fashion.

Speaking of ship ship fashion, the AFR had an excellent shall declare at column this week from Tony Boyd . They were discussing the unusually high executive churn at the Australian market monopolist. Helen Lofthouse is going to be taking over from Dominic Stevens on August 1st as the first female CEO of the ASX and already she’s now seeking to fill three key positions: CFO, group executive of listings and group executive of markets. Okay, fair enough, the group executive of markets position is the one currently occupied by Helen Lofthouse herself and therefore she is being promoted to CEO but at the same time, when we look back on what is now the closing curtain of the Dominic Stevens era of morphing the ASX into a self-described technology company that involves a quite extreme executive turnover and as the AFR puts it, “a significant loss of corporate memory” the fact that the incoming CEO Lofthouse’s one big policy admitted to so far seems to be attaching herself to the sinking CHESS ship as it drains 50-100 million Australian dollars per annum in Capex…makes it hard to feel optimistic about the Australian stock monopoly.

Have we reached the point where ASIC needs to shift gears and embrace the competitors as India did when the Bombay Stock Exchange was stuck in its long rallentando 25 years ago?

Back out there in “Big World” I found a fascinating statistic the other day. According to Chainanalysis, some $3.2 billion in cryptocurrency was stolen from exchanges and DeFi apps during 2021, that amounts to 100 times the total of all US bank robberies, according to the FBI, of course, with the recent crypto bubble bursting – ceteris paribus – the good news is we’re on target to have only 40 times as much crypto theft as US bank robbery proceeds during the course of 2022.

And on that mysterious and magnificent note ladies and gentleman, my name is Patrick L. Young, creator, builder and advisor to and all the exchanges the world over and publisher of Exchange Invest the daily bourse business newsletter.

I wish you all a great week in blockchain, life and markets.

LINKS

EEX To Develop Hydrogen Market Transparency Together With TYCHO Solutions
EEX

Chinese Tycoon Whose Bet Broke The Nickel Market Walks Away A Billionaire
South China Morning Post

Miami International Holdings Wins Patent Case Against Nasdaq; All Asserted Patents Invalidated And Patent Claims Permanently Dismissed With Prejudice
PR Newswire

CBI Probes Suspected Phone Tapping Of Stock Exchange Employees
The Wire

NSE Phones Tapped For 8 Yrs By PVT Firm: Official
Hindustan Times

NSE Co-Location Case: CBI Opposes Anand Subramanian’s Bail
Big News Network

CBI To Question Chitra Ramkrishna In Phone Tapping Case
Daijiworld

SEC of Sri Lanka Calls For RFPs For CCP
Sunday Times

Bahrain Bourse And Abu Dhabi Securities Exchange (ADX) Launches Tabadul Exchange Hub
WriteCaliber

Boris Chaos Casts Doubt On Post-Brexit Finance Rules: ‘There Is Concern Now’
Financial News London