Global Exchanges Set to Merge ... Again
It is five minutes before midnight on December 31, and the exchanges are starting to pair off.
The operators of the London Stock Exchange Group and Canada’s TMX Group are already hand-in-hand, ready to jump though regulatory hoops that will lead to a new exchange holding company. Not to be outdone, Deutsche Börse and NYSE Euronext have confirmed that they, too, are in advanced discussions to merge.
Of the parties involved, TMX and Deutsche Börse stand to walk away in the best positions. In the case of the LSE–TMX merger, the overall balance of gravity favors the Canadian markets, as they will become the global hubs of the new firm's derivatives, energy, and small-cap and mid-cap businesses—all major growth sectors for the next several years.
Meanwhile, the LSE Group will gain ownership of the Sola derivatives trading platform, which it uses for its EDX and IDEM markets, as well as a soon-to-be-announced platform, according to officials. It also finally gains a back door into the US cash and energy markets via dual listings on the US markets.
The unanswered question is what will become of TMX's Quantum trading platform. Considering that all the LSE Group cash markets currently use the Millennium Exchange platform, it's likely that the Toronto Stock Exchange (TSX) will see a migration to the platform in the near future.
If the Deutsche Börse–NYSE Euronext deal goes through, the new entity would have one of the strongest presences in the global futures and commodity space, with the tie-up of Eurex, NYSE Liffe and NYSE Liffe US. It certainly would not want to repeat Deutsche Börse’s experience when it launched the Eurex US futures exchange, only to sell it off in short order.
Within the US markets, the firm would play a dominant role in the listed options space, where it would control the International Securities Exchange (ISE), NYSE Arca Options and NYSE Amex Options.
In Europe, linking Deutsche Börse and historical Euronext clients, the holding company would be the prime exchange operator for the continental markets and the burgeoning economies of Central and Eastern Europe (CEE). Toss in the various client exchanges that are being served by NYSE Technologies in the emerging markets, and this will be an exchange powerhouse.
Conspicuously absent from this flurry of news is Nasdaq OMX, and questions will certainly arise about its next move. As far as mergers, the pickings are getting pretty slim as emerging markets exchanges have shown that they would rather band together than be acquired by the larger operators.
Could SGX–Nasdaq OMX be next? Both the SGX and its newly acquired Australian Securities Exchange (ASX) already use Nasdaq OMX platforms, so it wouldn't be too difficult to integrate the systems. However, considering the history of Nasdaq's acquisition of OMX, it remains to be seen how interested SGX CEO Magnus Böcker would be in dealing with his former employers.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Symphony boosts Cloud9 voice offerings with AI
The messaging and collaboration platform builds on Cloud9’s capabilities as it embraces the AI wave in what CEO Brad Levy calls “incremental” steps.
Can exchanges leverage new tech to claw back ETF share from RFQ platforms?
Systematic trading strategies and proliferating data are bringing efficiency to an otherwise-fragmented European ETF market.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
This Week: HKEx's new derivatives platform; GoldenSource; Quonian-SimCorp, and more
A summary of some of the latest financial technology news.
Chris Edmonds takes the reins at ICE Fixed Income and Data Services
Edmonds is now leading ICE’s fixed income and data business as the rush to provide better data and analytics in fixed income builds.
Systematic tools gain favor in fixed income
Automation is enabling systematic strategies in fixed income that were previously reserved for equities trading. The tech gap between the two may be closing, but differences remain.
Waters Wrap: Examining the changing EMS landscape
After LSEG’s decision to sunset Redi, Anthony examines what might lie ahead for the EMS space.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs