Thomas in Blockland
Thomas the crossing network wasn’t happy. For years he had enjoyed helping his friends buy and sell things amongst themselves. Sometimes he would even step in directly and agree to buy or sell something himself, especially if there was an awful lot of it. But now he had a tricky choice to make. The ruler of the land, The Regulator, had been convinced by the Exchanges that... Read More
Slicing up the merger mania cake
One of the great things about industrial logic is that it’s easy to slice it up in so many different ways. This appears to be exactly what is happening with the DB1 LSE merger and the rumoured counterbids from ICE and possibly others. Reuniting Liffe (now owned by ICE) with its original clearing house (LCH, now majority owned by LSE) would be powerful, especially when you throw... Read More
GMEX – going to eleven?
The announcement that new derivatives exchange GMEX has received investment from SocGen reopened the debate here as to the future of rates trading and who the likely winners are going to be. Reliable data is hard to come by on exactly what is happening to OTC volumes and where they are going. Such evidence as does exist seems to show a steady increase in SEF volumes, although this... Read More
FragPro all wrapped up for Christmas
Following on from my last blog on the subject, the guys at Fidessa Labs have now made the latest version of the Fragulator available. Despite its name FragPro is still free, and yet it contains a bunch of cool new features. These include the ability to view stocks or indices by order book or venue owner (e.g. LSE Group including Turquoise, or all Euronext venues), track dark pool... Read More
The gift that keeps on giving
Since Thomson Reuters announced the withdrawal of its market share reporter, the phones have been ringing red hot with enquiries asking if we could build a replacement using our existing free-to-view Frag website. This prompted a fierce debate here at Fidessa Towers as to whether we should commercialise this opportunity and, if so, what new features we would need to add and how... Read More
Clear danger ahead
As the regulators push us towards centralised clearing for OTC derivatives they may actually be making the world distinctly less safe. At face value it makes obvious sense; if one party defaults the CCP steps in. As always, though, the problem lies in the detail but this time not too far below the surface. The first problem concerns the efficient use of margin. As CCPs start to... Read More
The Future of Best Execution
I was chatting with a few work colleagues last Friday about best execution and derivatives. They confidently asserted that without real fungibility (i.e. the ability to trade the same instrument on different venues), price comparison is not possible and so any notion of best-ex was pretty meaningless. By coincidence, I was later looking at the wording in the best-ex policy of... Read More
A question of life and SEF
There has been a lot of debate around the role of SEFs in the global derivatives market. Some commentators are even claiming that the whole concept is dead and buried before the rules have even been finalised. But debating the viability or otherwise of SEFs is completely missing the point. The right question is how will standardised and custom derivatives contracts trade and clear... Read More
Clearly better?
An interesting few days in London last week at the annual derivatives bash, IDX. Naturally much of the debate and discussion was on the impending collision of the OTC and exchange-traded worlds that Dodd-Frank and EMIR are determined to orchestrate. Unlike equities, the worlds of OTC and exchange-traded derivatives have gone merrily down parallel, but separate, tracks. The regulators... Read More
The attraction of OTC clearing
Had an interesting week in the sunshine at the FIA annual conference at Boca Raton, Florida. Not surprisingly, the main topic was the move to bring the worlds of exchange traded and OTC derivatives together. This has been mandated by politicians/regulators on both sides of the Atlantic and will lead to the creation of a multitude of electronic platforms known as SEFs in the US and... Read More
MiFID II – 10 key takeaways that will give you indigestion
Just back from a two week trip around Asia and Australia that took in dark pool seminars in Hong Kong and Singapore and attendance at the FPL conference in Sydney. In my absence, it seems like the Eurocrats in Brussels have been busy as the official version of the widely leaked MiFID II proposals came out last Thursday. For a good roundup of the general themes look no further than... Read More
Now with added derivatives
Spent an interesting week in Boca Raton at the FIA’s annual conference which brings together the top executives from the global futures industry to debate what lies ahead. The event had extra spice this year as the recent wave of merger mania in the exchange space has placed a high premium on those venues that have – or that can create – a derivatives capability.... Read More
A Shot in the Dark
This week saw the announcement that six brokers are going to publish their dark pool volumes in a bid to improve transparency of non-lit trading in Europe. The report is published by Markit and is available here. Whilst the six firms involved should be applauded for taking these first steps towards greater transparency, the announcement still leaves a few questions unanswered. Firstly,... Read More
The Colour of Money
It was a record day yesterday here at Fidessa Towers as 1000s of people logged on to look at the stats on Turquoise now that the liquidity agreements with its institutional backers have expired. The drop off in volumes is significant but it is worth digging a little deeper into the true cause and impact. Firstly, as Eli Lederman (Turquoise’s CEO) points out “it was an... Read More
Think I’ll do my Xmas shopping at PLUS Markets this year
Yesterday, while looking at the PLUS Markets website I noticed that they are now advertising mobile phones and coffee makers. (Check it out at http://www.plusmarketsgroup.com/PLUS_myplus.shtml). When I wrote yesterday that the trading landscape was still to undergo fundamental change I didn’t think that alternative venues would be diversifying into the household goods market... Read More
