Xetra Trading System Ready for MiFID II

Xetra trading is ready to meet the requirements of MiFID II, the European Markets in Financial Instruments Directive, which goes into effect at the beginning of 2018. Deutsche Börse's underlying T7 trading system was updated to Release 6.0. MiFID II places new requirements on pre and post-trade transparency – algorithmic trades must be designated as such in the future. New requirements on market maker handling also stipulate that orders and quotes of designated sponsors have to be marked as such. Another new requirement is an identification code for trading participants that clearly marks transactions on the selected trading venue.

The International Stock Exchange Announces Managing Director of Regulatory Arm

The International Stock Exchange (TISE) has announced Mark Nicol as the new Managing Director of its regulatory arm, The International Stock Exchange Authority Limited (TISEA). Mr. Nicol joined TISEA on Monday [4 December] having previously worked at the UK’s Financial Conduct Authority (FCA) and the London Stock Exchange. Prior to his appointment as Managing Director of TISEA, Mr. Nicol held a number of senior leadership positions at the FCA. Previously he spent 12 years working for several exchange businesses in London, including the London Stock Exchange, EDX London and OM London Exchange.

Cboe Global Markets Licensed to Offer Futures Trading in Hong Kong

Cboe Global Markets, Inc. announced that Cboe Futures Exchange (CFE) recently received approval in Hong Kong to allow corporations that are licensed by the Hong Kong Securities and Futures Commission (under Part V of the Hong Kong Securities and Futures Ordinance) to become CFE Trading Privilege Holders (TPHs). With this designation, CFE has been authorized to provide automated trading services in Hong Kong. This means that in addition to CFE’s ability to conduct marketing activities in the region, CFE may now allow firms in Hong Kong to become CFE TPHs and to connect directly to the exchange.

Boerse Stuttgart Acquires Majority Holding in BX Swiss

Boerse Stuttgart GmbH will become the majority shareholder in BX Swiss AG. The equity stake will allow the two trading venues in Stuttgart and Zurich to lay the groundwork for a strategic partnership. The two companies will now be able to expand their existing technology cooperation: BX Swiss AG will adopt the Elasticia trading system in 2018, a system that proved itself at Boerse Stuttgart’s Scandinavian subsidiary NGM to be both efficient and reliable.

London to Tokyo FX Route Receives Upgrade

Network provider BSO has upgraded its London to Tokyo route to provide lower latency for FX trades. Tokyo has seen growing FX trading activity and had total turnover of $399 billion last year, according to the Bank of International Settlements. BSO said the new route will enable FX traders to increase the volume of trades they can execute through the network. It added that the route will also assist traders adapting to the continued electronification of FX trading, according to a story in The Trade.

Australian Stock Exchange to Use Blockchain for Equity Transactions

Bloomberg News reports that ASX Ltd. will start using blockchain -- the ledger software that makes bitcoin and other cryptocurrencies possible -- to process equity transactions. Digital Asset Holdings LLC, the startup run by former JPMorgan Chase & Co. banker Blythe Masters, will supply the technology. “We’re the first exchange to consider taking this step,” Peter Hiom, ASX Deputy Chief Executive Officer said. Cliff Richards, Head of Equity Post-Trade at ASX said moving to blockchain could also be beneficial for Australia’s securities regulator. “To the extent that it helps them get the reporting details that they need, and potentially move more to more proactive action, we believe that it puts them in a position to do those types of things,” he said. No date has been announced for replacing ASX’s Clearing House Electronic Sub-Register System, known as Chess. The new technology will let customers lower costs and introduce new services from the real-time post-trade data, Hiom said.

U.S. Tax Bill Delivers Shot in the Arm for European Shares

LONDON (Reuters) - European stocks rallied strongly on Monday after the U.S. Senate passed a tax package delivering significant fiscal stimulus, which investors had anticipated would give extra legs to the bull run in the equity markets.

The tax overhaul delivered some relief in early European trading after benchmarks hit multi-week lows on Friday.

Strong gains in the U.S. dollar helped Germany's dollar-exposed DAX .GDAXI shoot up from a two-month low, up 1.3 percent. The euro's strengthening has weighed on earnings expectations for stocks across the euro zone this quarter.

Bank stocks have seen as the biggest beneficiaries of tax cuts, jumping 1.1 percent on the day. HSBC (HSBA.L), BNP Paribas (BNPP.PA) and Santander (SAN.MC) were among the largest boosts to the index, up 1 to 1.7 percent.

“They are the main beneficiaries of rising interest rates, and tax cuts should boost demand and interest rate increases. Banks are anticipating that a little bit,” said Angelo Meda, head of equities at Banor SIM in Milan.

“With this tax deal it looks like markets are pushing ahead... and could pick up speed into the end of the year,” he added, saying the ingredients for a year-end rally of 3 to 4 percent were there.

Venezuela to Create a Cryptocurrency Amid Bolivar's Free Fall

(Bloomberg) Venezuela’s currency is in free fall. Cryptocurrencies such as bitcoin are going precisely in the other direction. And there, President Nicolas Maduro sees a way out of his country’s economic ills.

On his Sunday television show, Maduro announced the nation would create its own “petrocurrency,” backed by reserves in oil, gas, gold and diamonds. It will enable Venezuela “to advance in monetary sovereignty, carry out its financial transactions to overcome the financial blockade,” Maduro said.

“This will allow us to advance toward new forms of international financing for the country’s social and economic development,” he said.

The black-market rate for one dollar weakened to 103,000 bolivars on Friday compared with 10,000 at the end of July, according to dolartoday.com, a website that tracks the data. The International Monetary Fund sees Venezuela’s economy shrinking 12 percent this year and annual inflation rising beyond 2,300 percent in 2018.

Bitcoin rose on Friday after CME Group Inc. and Cboe Global Markets Inc. said they will offer futures contracts as soon as this month, capping a record-breaking week. The world’s largest digital currency surged about 30 percent last week, reaching a record high of $11,434 on Nov. 29.

Maduro’s government persists in laying the blame for the country’s economic woes at the feet of an opposition conspiracy to overthrow him and, more recently, U.S. sanctions that have limited its ability to restructure its debts. As the country finishes its fourth straight year of recession, some voices in the ruling socialist party are calling for a more market-friendly approach.

Jesus Faria, a self-proclaimed Marxist economist and a former trade minister who’s now a member of the constituent assembly, recently said about the current foreign-exchange policy that a “truly free exchange market has to be established, where supply and demand meet to fix the price.”

FastMatch Offers FX Tape Data to General Public

FastMatch, Inc., the FX spot market operator, which has operated as a Euronext company since August 2017, announced that individuals may now purchase FX Tape data from its website at a cost of €40 a month, using their credit cards. FX Tape is a new market data product that improves post-trade transparency in FX markets and allows market participants to monetize their trading data. FX Tape will also serve as a central reference point for spot FX transacted prices, helping individuals and companies to benchmark their FX rates. The FX Tape is open to all contributors under an open access model with a percentage of the net revenue generated by FX Tape shared with contributors, according to the volume contributed.

Israel Is Urged to Become a Global Hub for Digital-Currency Offerings

(Bloomberg) Israel should look at the explosion of cryptocurrencies as an opportunity to develop an international financial center for so-called initial coin offerings, the head of the country’s securities market regulator said.

What’s needed is sympathetic “and even daring” regulations to help foster digital sales, Shmuel Hauser, the head of the Israel Securities Authority, said today at a conference near Tel Aviv. Even so, the new market is so explosive that Israel must set controls, he said. “The quest for investments in bitcoin reminds me of the 19th century gold rush.”

Public interest in digital assets has exploded this year, spurred by technology innovation and diminished trust in governments and central banks after the financial crisis. As bitcoin soared above $11,000 from its 2016 close of $952, the largely unregulated trading has drawn increasing calls for rules to protect investors and safeguard governments from losing tax revenue.

Yet many countries remain divided on whether or when to develop cryptocurrency policy. In the Philippines, the central bank’s Governor Nestor Espenilla said it’s in talks with the nation’s Securities and Exchange Commission on ways to oversee ICOs, in which companies raise funds through the sale of digital tokens.

In the U.K., according to the Telegraph newspaper, ministers are launching a crackdown on virtual currencies amid growing concern that it’s being used to launder money and dodge tax. 

In Israel, there was some skepticism about Hauser’s ideas.

“The vision of Israel becoming an international hub is wishful thinking that stems from Israel’s technology abilities,” said Yaniv Pagot, chief investment strategist at the Ayalon Group, an institutional investor. “I don’t think there are enough people in Israel ready to give a kosher stamp for something like this yet.”

While blockchain is a legitimate technology that should be adopted to cut costs to investors, bitcoin is a means of digital payment that appears to have “gotten out of control,” said Hauser, who will be leaving the post early next year. His speech was sent to journalists by email.

Israel has yet to set a cohesive policy for cryptocurrencies. The Israel Tax Authority has deemed bitcoin a taxable financial asset, and the central bank has warned the public about risks associated with investing the commodity.