Tag Archives: LSE


Options Mart CBOE Rumored to Merge with BATS Exchange

Following a decade of new exchange launches, which led to a series of aggressive fee competition to attract order flow and elevated the ‘pay-for-order-flow’ game, the more current trend towards consolidation, fueled by an industry-wide race to zero fees and commissions is sparking rumors that the CBOE and BATS are planning to marry..This on the heels of the still uncompleted deal between Deutsche Boerse and London Stock Exchange (LSE), a transaction that according to one MarketsMuse “has been put on hold pending further impact analysis” of this late summer’s BREXIT vote.”

(Traders Magazine)-CBOE Holdings’ reported talks to acquire Bats Global Markets would be the latest in a long line of exchange tie-ups, with one common denominator: the drive to have more trades execute under the same roof.

“Exchanges are a scale game,” said Brad Bailey, research director at Celent’s securities and investments practice. “Running exchanges in a regulatory, market-structure-complex world is tough. There is tremendous operational leverage available to bigger, more complex exchanges.”

Yesterday, Bloomberg News reported merger talks between CBOE and Bats, citing people familiar with the situation. A deal could be announced within weeks, thought it still may not happen, according to the report.

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CBOE’s eponymous options exchange is the largest of 14 in the U.S., with market share of 26.5% this month, according to OCC data. Chicago-based CBOE has a virtual stranglehold in the index-options business via its dominant CBOE Volatility Index (VIX) product.

Bats, which purchased rival exchange operator Direct Edge in 2014 and itself went public earlier this year, runs the BZX and EDGX options exchanges, which have a combined market share of about 12%. Bats also operates four of the 13 U.S. equity exchanges, with a combined market share of about 20%.

Equity and options exchange operator Nasdaq bought options bourse International Securities Exchange earlier this year. In the equities space, IntercontinentalExchange bought New York Stock Exchange in 2013. In Europe, Deutsche Boerse and London Stock Exchange are planning to merge. And there have been a host of exchange mergers over the past half-decade that have been discussed or proposed but ultimately didn’t happen.

“Think about the size and scale across asset classes of most exchanges,” Bailey told Markets Media. “ICE gobbled up NYSE, DB/LSE are attempting a marriage despite the complexities that Brexit has added to that equation.”

MarketsMuse editors are gearing up to profile ‘What’s Next?’ Anti-Trust Fever Sweeps Regulators as Exchanges Consolidate to Revert To Predatory Pricing Model..” To read the entire story CBOE Rumored to Merge with BATS Exchange from Traders Mag, click here

Plato’s Exec Retreat-A Blow to European Dark Pool Project?

(Bloomberg) via (TradersMagazine) MarketsMuse Fintech team notes that Deutsche Bank AG’s Stephen McGoldrick, who was leading a consortium of banks and asset managers in developing a new European dark pool for stocks, has decided to leave the project.

McGoldrick will return to his role as director of market structure at Deutsche Bank, according to a spokeswoman. Plato Partnership, the not-for-profit dark pool specializing in block trades, is being developed by eight banks and seven fund managers. The consortium has said it will redirect the profit it makes to academic research intended to improve Europe’s financial markets.

Stephen McGoldrick
Stephen McGoldrick

“Stephen has done an exceptional job supporting Plato Partnership through the early stages of its development,” said Joanna Crawford, spokeswoman for Plato. “The Steering Committee would like to thank him for all his hard work.”

Turquoise, a market majority-owned by London Stock Exchange Group Plc, was selected in July to build the venue. The LSE subsidiary counts Deutsche Bank and Goldman Sachs Group Inc. among its minority shareholders, and they are also among the banks backing Plato.

Dan Mathews, a senior vice-president at Citigroup Inc., and James Hayward, who works in strategic investments at Goldman, were among Plato’s original architects, along with McGoldrick, the spokeswoman said. Mathews and Hayward will remain with the project.

LSE Scores Listing of China’s First ETF

MarketMuse blog update profiles the London Stock Exchange’s (LSE) Wednesday announcement that it had welcomed their first China ETF, Commerzbank CCBI RQFII Money Market UCITS ETF. This is an exciting new step as China hopes to have more offshore trading in the very near future. This ETF offers the abiltiy for those in the LSE to invest in China’s inter-bank market. This MarketMuse update is courtesy of BloombergBusiness’s Will Hadfield. An excerpt of the article, “The Yuan Comes to Europe as LSE Hosts ETF Tracking Chinese Money” is below.

A Chinese bank has launched the first money-market fund denominated in yuan that’s based in Europe, a milestone in the currency’s emergence as a major force in world markets.

China Construction Bank Corp.’s new exchange-traded fund, which is listed on the London Stock Exchange and available to investors throughout the European Union, is the first product to give Western investors access to securities in China’s interbank bond market. The fund, called the Commerzbank CCBI RQFII Money Market UCITS ETF, started trading Wednesday.

The ETF could be the first of many Chinese-currency funds to launch in developed markets as the country’s banks seek to attract investors with higher returns than they could get from dollar-, euro- or pound-denominated accounts.

To read the rest of the article from BloombergBusiness, click here