ICE CEO Sprecher: This market can be simplified

Exchange Shorts

Chicago Mercantile Exchange adjusted initial margins for agricultural commodity futures, Reuters reported. The changes include a 14.3% reduction in corn futures initial margins for speculators to $2,025 per contract from $2,363; a raise in soybean futures initial margins for speculators by 20% to $4,050 per contract from $3,375, among others.

ICE CEO Jeffrey Sprecher emphasized that “this market can be simplified and that the pendulum has swung too far on complexity”, CNBC reported. Sprecher argued for the removal of maker-taker fees as they create incentives for intermediaries to put their own interest before those of their customers. He also stated that the large variety of order types causes the market to be excessively complicated, and that ICE would reduce the number of order types at NYSE.

London Metals Exchange announced that day-to-day fees for using LMEClear will be set at the same level as existing LCH.Clearnet tariffs, according to Metal Bulletin. The clearing fee for all exchange-traded derivatives will be $0.25 per lot, or £0.15, while option exercise and assignment fees will be $0.08, or £0.05, the exchange announced on Friday May 9. Cash settlement fees and delivery fees are also unchanged at $0.08 per lot and $0.35 per lot, respectively. Clearinghouse members will be required to pay new recurring annual charges covering their own membership and the registration of individual and pooled client accounts with LMEClear, which is scheduled to launch in September.

China’s State Council pledged to continue with capital market reforms in order to encourage more efficient capital allocation, increase foreign investment, as well as improve market transparency, Reuters reported. The State Council also stated that it would develop a system for direct bond issuance by local governments, streamline the approval process for IPOs, as well as remove some restrictions on the use of financial derivatives.

Euroclear Bank extended the collateral-management system it operates with BNP-Paribas, “the Collateral Highway”, to four new markets, including Germany, France, Belgium and the Netherlands, Bloomberg reported.

Singapore Exchange CEO Magnus Bocker said that the Singapore bourse will focus on China, and that “mergers and acquisitions might not be my primary target right now.”

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 mariano@erdesk.com. 

Equity Research Desk (www.erdesk.com) 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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