FCA keeps narrow scope in currency-rigging settlement

Exchange Shorts

NDAQ reported 2Q14 adj. EPS of $0.70 (-3% q/q, +12% y/y) and diluted GAAP EPS of $0.59 (-1% q/q, +13% y/y), on revenues of $523m (-1% q/q, +16% y/y) an adj. OpEx of $308m (-2% q/q, +15% y/y) excluding M&A, extinguishment of debt and special legal expenses. NDAQ reduced OpEx guidance to $1.22b-$1.25b from $1.25b-$1.285b. NDAQ paid $100m of debt and returned to its long-term leverage target; and also repurchased $93m of stock. NDAQ declared a $0.15 dividend per share payable on September 26.

ASX reduced fees for interest rate derivatives and OTC clearing in Australia, in response to increased competition from global clearinghouses, Bloomberg reported. According to ASX, charges for customers using ASX Clear (Futures) will be determined by transaction volume, rewarding customers who trade more while removing a rebate based on growth of overall revenue.

Financial Conduct Authority (FCA) is preparing to reach a deal with banks, including Barclays, Citigroup, JPMorgan, and UBS, in the currency-rigging settlement. The regulator is seeking to keep the scope of the deal narrow in order to quicken the speed of the settlement, Bloomberg.

Japan regulator FSA proposed a high threshold for mandated e-trading of swaps, Risk.net reported.

MKTX Chairman and CEO Richard McVey stated that while swap execution facility volumes have improved, they are still disappointing, SNL reported. McVey was quoted saying that “aggregate CDS SEF volumes are lower than expected, and regulatory costs to operate SEFs are far greater than current SEF revenues.”

Nairobi Securities Exchange (NSE) priced shares in its IPO at 9.50 shillings ($0.11), and also stated that it aimed to launch a new derivatives market, as it opened up to non-brokers for the first time in 60 years, Reuters reported.

U.S. Federal Reserve will take the lead in the U.S. to find a replacement for interest rate benchmarks that have lost their luster, with the focus to be on derivatives, MLex reported.

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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