CFTC no-action letter: No enforcement taken against HKEx’s OTC derivatives clearinghouse

HKEx reported 1Q14 basic EPS of HKD1.02 (+1% y/y), on total revenue and other income of HKD 2,335m (+5% y/y), operating expense of HKD 734m (+10% y/y), and net profit attributable to shareholders of HKD 1,178m (+2% y/y).

European Securities and Markets Authority Chairman Steven Maijoor proposed an 8-9 month breathing space on derivatives clearing for certain derivatives transactions, Reuters reported. Derivatives entered into from March 18 until around November will not have to be cleared even if ESMA decides to include those types of contract in the future.

ESMA Chairman Steven Maijoor wrote to the European Commission to request the frontloading obligation for clearing under EMIR to be limited to derivatives cleared between the entry into force of the regulatory technical standards and the beginning of the clearing obligation, Global Capital reported.

ICE: Euronext will be listed on three of its markets in the Netherlands, Belgium and France following the IPO, with another possible listing on its Lisbon exchange, Reuters reported.

ICE reported 1Q14 adj. EPS of $2.60 (+30% q/q, +28% y/y), 9c below our estimate & 1c below the consensus estimate. GAAP EPS was $2.26 (+22% y/y), including a $60m transaction and integration costs. Net revenues were $932m (+52% q/q, +165% y/y) and adj. OpEx was $463m (+46% q/q, +252% y/y). ICE declared a $0.65 per share dividend. ICE expects 2Q14 other revenue of $120m-$130m. ICE achieved expenses synergies of over $220m on a run rate. ICE expects 2Q14 consolidated expenses of $485m-$495m. ICE segment 2Q14 expenses guidance is $390m-$400m, and $1.56b-$1.58b for FY14.

Singapore Exchange Limited hired former Citic Securities COO, Chiu, to head the exchange’s Hong Kong office as part of its China derivatives push, Bullfax reported.

European Energy Exchange will re-launch its coal market on 21 May 2014, in cooperation with four leading brokers, GFI Securities Limited, Spectron Energy Services Ltd., Tradition Dubai Limited and Tullett Prebon (Europe).

London Stock Exchange: Turquoise appointed former CEO Natan Tiefenbrun as non-executive board director, after he moved to Bank of America Merrill Lynch (BAML) in 2013. BAML is among the 12 investment banks that own stakes in Turquoise and is entitled to a seat on the Turquoise board. Tiefenbrun repaces Ashok Krishnan, global head of execution at BAML.

Barclays PLC aims to reduce 7,000 jobs at investment bank by 2016, Wall Street Journal reported. With this change, the unit is expected to represent no more than 30% of the group’s risk-adjusted assets, down from slightly over half. Barclays also aims to exit retail-banking businesses in Western Europe.

Commodity Futures Trading Commission issued a no-action letter stating that it will not take enforcement action against HKEx’s OTC derivatives clearinghouse OTC Clear, for its failure to register as a derivatives clearing organization. The no-action relief is effective until Dec. 31, 2014, Global Capital reported.

CFTC Commissioner Scott O’Malia stated that the agency needs to invest more in technology as “I do not believe that the systems are adequate to oversee today’s fast and complex derivatives markets,” Pensions & Investments reported. According to O’Malia, he was “tired of asking the commission” for a strategic technology proposal, “so I am instead going to seek input from the exchanges.”

About the Author

Bernardo Mariano brings to ERDesk his experience structuring private deals for the acquisition of mutual exchanges. Prior to joining ERDesk Bernardo worked as a Director for Instinet and later, CEO of Reuters' Bondex. He holds an MS in Economics from University of Illinois and an MIA in Finance from Columbia University. He can be reaced at be reached at 

Equity Research Desk ( provides fundamental analysis of global capital markets related entities to support the investment process of buy-side analysts at hedge funds and traditional money managers. The company focuses its coverage on securities exchanges, discount brokers, trading platforms, asset managers, financial-related technology companies and intellectual property assets in the US, Europe, Asia, and Latin America.

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