Dark pools boost trade sizes to rise above EU caps

The operators of European dark pools are stepping up efforts to encourage larger institutional orders because forthcoming European Union caps on dark pool volumes will not apply to large trades.

Turquoise, the equity market majority-owned by the London Stock Exchange, on Monday started a new service to facilitate block trades. It is designed for institutional investors and allows Turquoise members to issue a “block indication”, announcing interest in buying a large order of a given stock. If a matching block indication is found, the two parties are asked to complete the trade.

James Baugh, head of sales at Turquoise, said seven companies had committed to using the service at launch, including JP Morgan, Instinet, Barclays and Societe Generale.

Cross-border wrangles spark talks on new EC body

Calls are growing among market practitioners for a single body within regulators such as the European Commission, focused solely on solving ongoing issues related to the cross-border impact of securities regulation.

The effect of new regulation to the $600 trillion over-the-counter derivatives markets, in particular rules that mandate the clearing of standardised swaps, are those causing most disruption to firms that operate across different jurisdictions.

A lack of agreement, or mutual recognition, between the European Commission and the US Commodity Futures Trading Commission on their post-crisis regulatory regimes has threatened to subject firms with transatlantic businesses to overlapping and contradictory regulations.

Hedge funds target fall in UK house prices

Hedge funds are building short positions against the UK residential property sector, targeting firms such as Zoopla, Rightmove, Barratts and Foxtons, as signs of a slowdown in the property market begin to build.

Their move come as a number of surveys have suggested that property prices, particularly in the crucial London market, are starting to cool.

Tom Walker, co-head of global property securities at UK fund manager Schroders, said: “It is clear that volumes are decreasing, and prices have fallen, albeit a percent of two. What [the hedge funds] are calculating is that the trend continues and it isn’t just a one off or a seasonal slowdown.”

Analyst duo ditch Espirito Santo for HSBC

Two Panmure Gordon analysts who were due to join Espirito Santo's Investment Bank last month have made a last-minute move to HSBC, according to four people familiar with the matter.

Graham Jones and Damian McNeela were hired by Espirito Santo's Investment Bank in July, as part of a bid to strengthen Espirito's coverage of the European consumer sector. They were due to start the new roles last month.
However, they have now agreed to join HSBC instead, according to four people familiar with the matter. Jones is already a former HSBC alumni, having been the bank's head of European food produce before he joined Panmure Gordon in 2004.

Banks slow to embrace 'digital revolution'

Open source systems, peer-to-peer lending, cloud computing, big data and crypto-currencies are some of the technologies bank fintech funds will consider investing in, as the largest financial firms seek to play technological catch up.

Speaking at a session at the Sibos conference in Boston, six senior executives from global banks engaged with fintech startups said they will be backing companies that can improve their existing technology. The representatives have roughly $600 million to invest in startups.

Manuel Silva Martinez, vice president at BBVA Ventures, a $100 million fund launched by Spanish bank BBVA last year, said: “The way entrepreneurs are seeing the future of the industry is very powerful and probably more powerful than how we see the future of the industry.”

Q&A with RDIF's Kirill Dmitriev

The Russian Direct Investment Fund, the sovereign wealth fund established in 2011 to make equity investments in the Russian Federation, announced this week that it had teamed up with Abu-Dhabi’s department of finance to create a joint venture to invest in Russian infrastructure.

 The $5 billion contribution from the Abu Dhabi department of finance is the largest investment from the Middle East ever made into Russia, according to Kirill Dmitriev, chief executive of the RDIF, who spoke to Private Equity News, sister publication of Financial News, about the joint venture.

Five questions five years on from Lehman

Financial News has this week been asking high-profile names from the world of finance – including Larry Fink, Michael Tory and Ed Bonham Carter – about their memories of the US bank's collapse in September 2008.

The fall of Lehman Brothers in mid-September 2008 was the spark that inflamed the financial sector and the banking industry, paving the way for a full-blown crisis.