News in brief: Eurex names Stuart Heath head of UK representative office

Finra files proposals to clarify circuit breaker rules
The Financial Industry Regulatory Authority (Finra) and the US national securities exchanges are today filing proposals to clarify the process for breaking erroneous trades. The proposed rules seek to clarify when and at what prices trades would be broken.
The rules are a response to the market disruption on May 6 and are complementary to the Securities and Exchange Commission’s approval of a set of stock by stock circuit breakers.
The proposals are that trades would be broken when prices diverge from the “reference price”, which is normally the last sale before price disruption begins. On May 6, only trades that were more than 60% away from the reference price were broken, and the process was not transparent to market participants.
Mary Schapiro, the SEC’s chairman, said in a statement that: “Establishing clear and transparent standards for breaking trades helps provide certainty in advance as to which trades will be broken, and allows market participants to better manage their risk.”

Toronto Exchange completes co-location facility
The Toronto Exchange has finished building its co-location facility. Clients will be able to install their trading applications in the TMX data centre from June 30 and will be able to access the trading engines and market data feeds of the Toronto Stock Exchange, TSX Venture Exchange and the Montreal Exchange.
It is designed to accommodate up to 200 co-location spaces.
The introduction of the co-location facility was first announced in the autumn of 2009.
Eric Sinclair, the president of TMX Datalinx and group head of data, said in a statement that: “Co-located clients can directly access a broad range of TMX Group equity and derivative data feeds including the TMX Equity Information Processor. We also offer a range of low-latency routing and connectivity options into other domestic and international markets to facilitate cross-market trading strategies.”

Nomura becomes index futures market maker on Tokyo Stock Exchange
Nomura Securities today became an index futures trading supporter for dividend index futures at the Tokyo Stock Exchange. It will offer bid and ask quotations to increase liquidity in the market.

ISE to publish dividend trade data on its website
The International Securities Exchange will publish dividend trade data on its website.
Some dividend trade strategies are transacted by market makers who try to capture corporate dividend payments when customers leave call options which are deep in-the-money unexercised on the day before a stock’s ex-dividend date.
“As a securities exchange and a self-regulatory organisation, it is incumbent upon us to identify potential risks in the US market system,” said Gary Katz, president and chief executive of ISE. “In addition to the systemic risk created by dividend trades, they also disadvantage retail investors and undermine the hallmark of transparency in the listed options market.”

Eurex names Stuart Heath head of UK representative office
Eurex has named Stuart Heath as head of its London office, replacing Hartmut Klein from June 1. Heath, who was an executive director Eurex’s product development team, will be responsible for forging strong relationships with Eurex clients in the UK. Klein is heading into consultancy work, the bourse said.
“Since the establishment of our office in London, Hartmut Klein has been an integral part of our UK operations and significantly developed the business for our customers and Deutsche Börse and Eurex, thus I would like to thank him for his achievements and wish Hartmut all the best for his professional and personal future”, said Michael Peters, member of the Eurex executive board, in a statement.
“I am confident that Stuart will build upon this success and continue to extend our business in one of our core markets. I am looking forward to working with him to realize our international growth strategy.”
Heath, formerly of investment banks RBS and Daiwa, has spent the last three years working on the introduction of new asset classes such as dividend derivatives and property index derivatives.
A total of 100 of Eurex’s 410 members are UK-based.