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Clearly MiFID is Having its Desired Effect

December 4, 2008

Analysis of:London Stock Exchange loses trade to rivals | business.timesonline.co.uk

(1.)  Markets in Financial Instruments Directive (MiFID), was the result of pan-European legislation passed in 2004, which consolidated and made consistent the rules that govern the reporting of over-the-counter (OTC) trading in company shares in Europe. (2.)  MiFID took effect on November 5, 2007. (3.)  Already we see that European Exchanges have begun to lose out in the estimated $3 Billion annual spend for European market data and other trading fees, while buy-side customers and sell-side traders are becoming the eventual winners due to increased competiveness in share prices and transparency, all at a reduced cost.

Brokerage Firms Will Continue to Invest Responsibly in IT

May 8, 2008

Analysis of:Brokers to cut technology spending by 7% | www.financialnews-us.com

Brokerage firms invest in technology when they see a clear return on their investment. Those returns are typically realized in two ways, competitive advantage or lower cost. Return on investment must clearly exceed the firm’s cost of capital and pay-back is generally limited to a 24 month time frame. As a result, technology projects are green lighted, delayed short term or delayed indefinitely based on these highly quantitative criteria.

Alpha-Beta – Why should we pay more?

January 14, 2008

Analysis of:And God created alpha | www.economist.com

Beta is your gift from broad markets like the S&P 500 index. Alpha is an unknown combination of luck and investment management skill for which you pay. There is no such thing as cheap Alpha.

Boards of Directors Need to Meld Creative Business Solutions with Legal Advice

December 31, 2007

Analysis of:Goldman Sachs to invest in First Marblehead | www.reuters.com

Boards of directors need to do a better job of evaluating legal advice with respect to the needs of the business. Slavish adhearance to doom sayer lagal advise without consideration of creative business alternatives and solutions is not good business practice.

The Boss as Buyer can Spell Disaster

November 13, 2007

Analysis of:A Bitter Rift When a Boss Is the Buyer | www.nytimes.com

1. The boss as buyer always presents a sticky case for boards of directors. 2. It can breed animosity among people who were previously friends. 3. Without airtight corporate governance, losers will generally outnumber winners, while potentially damaging the company leadership.

MiFID Makes Customers the Real Winners

November 5, 2007

Analysis of:Citigroup, Goldman Take on Exchanges on EU Mifid Law | www.bloomberg.com

1. Markets in Financial Instruments Directive (MiFID) is the result of pan-European legislation passed in 2004, which aims to consolidate and make consistent the rules that govern the reporting of over-the-counter (OTC) trading in company shares in Europe. 2. Brokerage customers and especially buy-side institutions seek transparency and cost effective liquidity in a confidential environment. 3. Already the European Exchanges have begun to lose out in the estimated $3 Billion annual spend for European market data and other trading fees, while buy-side customers and sell-side traders will become eventual winners due to increased competiveness in share prices and transparency, all at a reduced cost.

Private Market Liquidity is good for Sponsors as well as Holders

September 18, 2007

Analysis of:Three Firms Join Private System to Trade Stocks | online.wsj.com

Opus-5 is not a new concept, but a potentially lucrative one for its partners. A number of so called Alternative Trading Networks (ATNs) have been set up in the past to address the need for more liquidity in other capital markets. Although Goldman Sachs and Bear Stearns have set up similar networks to meet the need for private equity liquidity, the NYPPEX has been meeting this need since 1998.

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