New for Traders: Week ending December 21

This week, ICE acquires NYSE, Getco takes over Knight and NASDAQ launches new market surveillance for commodities

Financials

  • IntercontinentalExchange  (ICE) announced a definitive agreement to acquire NYSE Euronext in a transaction valued at $33.12 per NYSE Euronext share (roughly $8.2 billion). The exchanges also entered into a deal under which ICE Clear Europe will clear NYSE Liffe’s derivatives markets.
  • Getco plans to acquire Knight Capital Group Inc. for $3.75 per Knight share, one-third of it in stock ($1.4 billion total). Knight has been independent for 17 years, but suffered losses of more than $450 million after a trading error in August.
  • Morgan Stanley will make a strategic equity investment in Eris, a futures exchange offering interest rate swap futures. The financial terms of the arrangement, which is expected to close early next year, were not disclosed.
  • The Depository Trust & Clearing Corp. launched a data center in Singapore, part of a larger effort to establish a trade repository for over-the-counter derivatives.

Commodities

  • CME Clearing Europe introduced two near over-the-counter (OTC) iron ore contracts for clearing: Iron Ore 62% CFR China Average Price Options and Iron Ore 62% CFR China Calendar Swaps.
  • The European Energy Exchange plans to launch three new futures contracts for trading of hydroelectric power from the Scandinavian and Alpine regions, along with wind power from northern Europe.
  • The Tokyo Commodity Exchange Inc. (TOCOM) and Nikkei Inc. launched new indexes based on their co-branded indexes. The Nikkei-TOCOM Leverage Index, which is available on a daily basis on TOCOM’s website, is designed to realize a high-risk/high-return investment strategy based on the expectation of a bullish market.
  • On Dec. 10, ICE Futures Europe reopened the daily futures market for the carbon credit Phase II EU Allowances and Certified Emission Reductions, and launch a new daily futures contract for Phase III EU Allowances.

Managed Funds

  • The Hedge Fund Association announced that it has created a High Net Worth Advisory Board that will develop global educational programs and  networking events for high net worth investors.

Options

  • The Miami Options Exchange (MIAX) launched on Dec. 7 after receiving regulatory approval from the Securities and Exchange Commission. It is the 11th U.S. equity derivatives market.
  • The International Securities Exchange (ISE) will launch trading in Mini Options on March 18, 2013. ISE is the first exchange to confirm a launch date for the options, which will represent a deliverable of 10 shares of an underlying security. Mini Options will initially be listed on APPL, AMZN, GLD, GOOG and SPY.

Forex

  • Thomson Reuters enhanced its FX matching platform designed to boost capacity, scalability and performance. New features include a graphical user interface and click to trade capability.
  • Intercontinental Exchange (ICE) will launch two new cash-settled forex futures contacts for the Indian rupee (INR)/U.S. dollar and Brazil real/U.S. dollar beginning Jan. 28, 2013. ICE is the first U.S. exchange to launch an INR futures contract.

Technology

  • NASDAQ launched SMARTS Broker market surveillance for commodities trading on the London Metal Exchange, including the go-live of two global broker-dealer customers, one of which is brokerage Newedge.
  • SuperDerivatives, a provider of derivatives data and analytics, introduced DGX, its real-time cash and derivatives market data platform. DGX is designed to deliver cash and derivatives market data—including coverage of 800,000 bonds; 50,000 stocks, indexes and ETFS; and 4,000 CDS curves—to the user’s desktop, iPad and/or mobile device.
  • NASDAQ will now include U.S. consumer demand data on the NASDAQ OMX Event-Driven Analytics service. The index, which will be delivered to the service five minutes before it is sent to other end-users, predicts trends in American consumer spending.
  • SGX and Eurex will offer market access through their data center linkage beginning in January.

Regulation

  • The Office of Fair Trading (OFT) approved LSE’s planned acquisition of LCH.Clearnet, saying that following a thorough investigation, it “concluded that the deal did not raise competition concerns.”
  • The Commodity Futures Trading Commission (CFTC) unanimously approved a determination requiring swap dealers to guarantee trades involving six classes of credit default and interest rate at registered clearinghouses.
  • CME Group Inc. dropped a lawsuit challenging CFTC trade-data reporting rules after the agency withdrew certain requirements governing the routing of trade price and volume information.
  • The CFTC approved CME’s application to establish its CME Repository Service, a swap data repository. The exchange will waive reporting fees for the service through Sept. 30, 2013, including back-loaded trades.
  • CME Group Inc. and the National Futures Association chose AlphaMetrix360 as their electronic data aggregation services provider. The new partnership is designed to create a system to collect bank balances for depositories holding customer-segregated, secured amount and sequestered funds for futures commission merchants.
  • The U.S. Treasury Department exempted forex swaps and forwards from Dodd-Frank regulations that will apply to other derivatives. The agency explained the decision by saying that “unlike other derivatives, FX swaps and forwards already trade in a highly-transparent, liquid and efficient market.”

 

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