TOM and Euronext claim victory
This Wednesday there was a decision in the Court of The Hague in the never-ending story of lawsuits of Euronext against TOM. It’s a long read, but if it’s your thing you can find the (Dutch) ruling here.
Very confusing. Both exchanges claimed victory. To me it seems like a draw. To cut a long story short, Euronext won a few points. But almost all of these points are matters from the past. Nothing will change.
Database violation
All option classes and strikes are considered a database. In the past TOM just copied every option strike in every class. This is seen as a violation of database ownership. TOM is not allowed to do this anymore. However, TOM made their own strike policy a year ago.
AEX options
They can’t use AEX brand for the index options, but this has already been changed in XNL. Also Binck had to adjust this ticker code in the communication with the investors. The index options based on the AEX index are explicitly allowed. This could have been a disaster for TOM if court would have decided otherwise. Again, nothing new here.
Marketing claims
Finally, TOM has been bragging about best execution and best prices with their smart order router (SOR) in options. These claims don’t hold, so TOM needs to be a bit more modest about their best execution. Best execution becomes best effort. Anyway, nobody believed the story market makers would quote tighter option markets on TOM.
Ticker codes unchanged
In other words, TOM doesn’t have to change anything at all. TOM was allowed keep on using the regular Euronext ticker symbols with an extra T. Options on Ahold have the code AHT on TOM, compared with AH on Euronext. That’s a relief for TOM, as it would be a waste of energy giving every option class a new ticker symbol.
What’s next?
What’s next? Euronext has won a few points, but most of it has been changed early 2014. But given this court decision, Euronext has the right to seek compensation. But this compensation is not going to happen. It’s a long road of endless litigation. Could take years, and Euronext needs to provide evidence they’ve lost money due the issue. That’s almost impossible.
HCH becomes ICE
Small other news. Trades at TOM are being cleared at Holland Clearing House. Used to be ABN AMRO, but ICE has bought a majority stake in the clearing. The name Holland Clearing House will be replaced by ICE. Although HCH doesn’t seem to know it yet.
DeGiro still not sued by Binck
DeGiro made a credible claim the SOR in TOM’s stock market routing wasn’t really working smoothly. High frequency traders (probably Virtu) could take advantage of the not-so-smart order router. Binck announced to sue DeGiro. Empty threats, because as predicted Binck is probably aware they would lose in court.
- Press release TOM in reaction to court decision here (pdf)
- Update : a nice overview of the claims and the timeline in a pdf from TOM (Dutch)
small side stap, I just read in de Telegraaf that HIQ invest market neutral fund did crash.
Any idea how this will influence the operations of de Giro?
define ‘crash’
a “recycled “article by telegraaf about the -14% in June, nothing new here
Article in the FT today on HiQ Market Neutral… elected as worst-performing hedge fund with assets falling to $45 mn.
http://www.ft.com/intl/cms/s/0/9025f97a-3203-11e5-8873-775ba7c2ea3d.html#axzz3h8B15c00
The worst-performing fund this year is the HiQ Invest Market Neutral fund, which is down 17.62 per cent to the end of May.
Amsterdam-based asset manager HiQ Invest did not respond to requests for comment. The fund’s assets nearly halved, to $45m, since January.
“It will be difficult for them to recover,” Mr Ince said.
DeGiro 555
Hahaha, sometimes some really funny comments come along here. That one just made my day.