Well, a fast week
coming back from the bank holiday and lots of discussion on block chain.
Of the various types of
‘chain’ available, public / private / consortium, I feel my initial sentiment,
that the consortium model is most appropriate, appears to hold true.
I was also delighted to
learn the meaning behind the name of Mt Gox (which never made sense to me) Magic:
the Gathering Online Exchange i.e. Mt Gox!
As ever, there is just
too much news to distill. What’s happening in the operation and regulation of
our day to day markets (MiFID II) and where those markets might be going
(distributed ledger).
We now appear to have
fairly well organised structures / roles for tracking and commenting on market
structure changes (a role that was far less defined pre-MiFID).
It now strikes me that
as an industry, there is a lot going on in the distributed ledger space,
although as yet, our responses are not that co-ordinated.
For example, we have FCA
with Project Innovate, the Blackett Review, the Payments System Regulator setting
up a strategy forum, the EC setting up their Digital Commission and not to
mention the interest of HM Treasury and the BoE!
This is a lot of
engagement. Who has the bandwidth for all these issues?
On more practical
matters. Delighted to see CSDR coming out with uniform rates, fines
and implementations. A delight to see so many operational 'domestic market
practices' harmonized.
Meanwhile my swimming
continues. Lots of lengths, with the plan to swim the Solent crossing on the 21st Sept. The cause is for Motor Neurone
Disease.
An earlier scheduled
swim has been postponed due to bad weather / conditions. I’ll be mightily
disappointed if I book accommodation down there and don’t get the chance to
swim!
2 weeks until RWC 2015
kicks off.
Unbelievable…and an
exciting prospect.
Have a great week-end
all, whatever your leisure.
If we knew what it was we were doing, it would not be called research, would it?
- Albert Einstein
Blockchain
The Rise and Fall of a
Bitcoin Kingpin
How a bullied geek
forged an empire out of digital currency, and became a suspect in a
half-billion-dollar heistMt. Gox was originally
a site…made for people to exchange Magic cards (thus the name — Magic: the
Gathering Online Exchange, or Mt. Gox for short).
** Note: A Mt Gox
problem is a Mt Gox problem – NOT a Bitcoin problem. Bit like a Regulated
Market problem is not an equities problem.
Some
regulatory regimes are purposefully not tough on new sectors to allow them to
grow and self regulate to a degree. Ultimately there comes a point when
building something new you have to interact with the regulator. Having the
people with the experience to engage strategically with regulators, as well as
come up with creative / automated regulation solutions is the key gap in
fintech and banking.
Earthport launches the
first fully compliant gateway for real time payments
London, UK, August 18
2015 – Earthport, the largest open global bank payment network, today announced
the enhancement of its global gateway to enable real-time cross-border payments
via distributed ledger protocol. With a single, simple integration into Earthport,
its clients can have access to the fastest payments possible, whether through
the company’s Expedited Payments (Global ACH); Faster Payments (in the markets
where available), and now, Real Time Payments, via a partnership with Ripple
Labs.
FCA:
Project Innovate
The
Call for Input closes on 7th Sept.
Government
for Science report / Blackett Review
The
new Payment Systems Regulator (PSR), is currently in the process of setting up
a Payments Strategy Forum.
European
Commission: A Digital Single Market for Europe: Commission sets out 16
initiatives to make it happen
HM
Treasury
"4.7
The government recognises that the technology associated with digital
currencies offers considerable promise, making it possible for users to
transfer value (or other information) quickly, efficiently and securely,
providing a permanent record of what has taken place, and without the need for
a trusted third party to oversee the process. In response, the government is
launching a new research initiative which will bring together the Research Councils,
Alan Turing Institute and Digital Catapult with industry in order to address
the research opportunities and challenges for digital currency technology, and
will increase research funding in this area by £10 million to support this.
4.8
In addition, in February 2015, the Bank of England announced it will undertake
research on central bank-issued digital currencies as part of its new research
agenda. This work covers the potential costs and benefits of doing so as well
as the economic impact, technological requirements and necessary regulations
for a central bank-run system."
India
Interoperability
reaches India?
Sebi
to revise clearing corp norms; mulls interoperability
http://economictimes.indiatimes.com/articleshow/48655450.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://economictimes.indiatimes.com/articleshow/48655450.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Not today…
Committee on Clearing
Corporations
On interoperability /
viability of single Clearing Corporation, the committee recommended that at
this juncture, maintaining separate clearing corporations for each exchange
would be prudent.
Regulation
ESMA advises Commission on
implementation of CSD Regulation
ESMA has delivered the Technical Advice on the level of penalties for settlement fails, and the substantial importance of a CSD for the functioning of the securities markets and the protection of the investors in a host Member State.
ESMA has delivered the Technical Advice on the level of penalties for settlement fails, and the substantial importance of a CSD for the functioning of the securities markets and the protection of the investors in a host Member State.
|
Asset Type/liquidity
|
Daily flat penalty rate
|
|
Liquid shares
|
1.0bp
|
|
Illiquid shares and others financial
instruments (such as ETF, certificates, DR, etc.)
|
0.5bp
|
|
SME Growth Market shares and other
financial instruments
|
0.25bp
|
|
Corporate bonds
|
0.20bp
|
|
SME Growth Market bonds
|
0.15bp
|
|
Government and municipal bonds
|
0.10bp
|
|
Cash
|
Discount Rate per currency with a floor
of 0
|
(page 15)
DRAFT REPORT on
stocktaking and challenges of the EU Financial Services Regulation: impact and
the way forward towards a more efficient and effective EU framework for
Financial Regulation and a Capital Markets Union
or
CPMI-IOSCO: Harmonisation of key OTC derivatives data elements (other than UTI and UPI) – first batch
This consultative report is one part of the CPMI-IOSCO Harmonisation Group's response to the FSB mandate. It focuses on a first batch of key data elements (other than UTI and UPI) that are considered important for consistent and meaningful aggregation on a global basis.
This consultative report is one part of the CPMI-IOSCO Harmonisation Group's response to the FSB mandate. It focuses on a first batch of key data elements (other than UTI and UPI) that are considered important for consistent and meaningful aggregation on a global basis.
The report finds that implementation of OTC derivatives market reforms is well underway, with the foundational authority needed to give effect to the full range of these reforms in place in most FSB member jurisdictions.
A
group of 11 industry associations have called on regulatory bodies to address
the problems of poor data quality in derivatives reporting.
One
idea floated by the group would be to create a central 'data dictionary' that
defines and clarifies derivatives trade and reference data and workflow
requirements for each reporting field required by regulators globally.
The London Stock Exchange has inked a deal with Boat Services to build a MiFID II-compliant multi-asset reporting platform.
The real-time service will bring together the LSE's and Cinnober-owned Boat's existing MiFID-compliant trade reporting platforms and complement the T+1 MiFID and Emir transaction reporting service available via UnaVista.http://www.finextra.com/news/fullstory.aspx?newsitemid=27801&utm_medium=NewsFlash&utm_source=2015-9-3
The real-time service will bring together the LSE's and Cinnober-owned Boat's existing MiFID-compliant trade reporting platforms and complement the T+1 MiFID and Emir transaction reporting service available via UnaVista.http://www.finextra.com/news/fullstory.aspx?newsitemid=27801&utm_medium=NewsFlash&utm_source=2015-9-3
AIMA: Impact of Basel III on hedge funds and asset managers
AIMA announced a new survey that explores how Basel III bank capital rules impact money managers and their financing relationships.
AIMA announced a new survey that explores how Basel III bank capital rules impact money managers and their financing relationships.
*** Don’t get excited,
this is the survey…not the results.
Looking at FX in MiFID.
A. What is the scope?
Given
the implications of a currency contract being a MiFID financial instrument, it
is hardly surprising that there has been considerable debate surrounding the
issue of when an FX contract is a currency payment or FX spot contract on the
one hand, or an FX forward contract on the other: the former does not comprise
a MiFID financial instrument, while the latter does. It is broadly agreed that
a currency contract which settles within two trading days is a spot contract
while one which settles after seven trading days is an FX forward
contract. However, Member States have taken different approaches to the
classification of FX contracts the settlement date of which is between 3 and 7
trading days. Moreover, some Member States have transposed MiFID so as to
exclude certain categories of FX forward contracts from the definition of
financial instrument and those excluded categories themselves vary across the
Member States.
B. Does the inevitable
regulatory creep provide future commercial opportunities?
Financial
data outfit Markit has agreed to buy DealHub, a provider of trade processing
and trading services to the foreign exchange market. Financial terms were not
disclosed.
Results
Cinnober Interim
Results.
Hong Kong Exchange
Record results (full
set including LME).
