Two Down, One to Go

Back in April when Nasdaq OMX and the IntercontinentalExchange (ICE) announced their—ultimately unsuccessful—bid for NYSE Euronext, I wondered whether exchange operators had reached their maximum size.
Speaking about the failed TMX–LSE vote, Robert Young, CEO of Liquidnet Canada says there are really only two ways to raise shareholder value through an exchange merger: Either increase top-line revenue growth by introducing new markets, or reduce bottom line costs by eliminating duplicate costs.
The business case for the TMX–LSE merger definitely would have been the latter. Once an exchange operator has its finger in its own equities, futures and derivatives markets, it's difficult to introduce new products through a merger.
Now the LSE Group faces a challenge, as most large exchange operators have decided to remain standalone businesses or have found their dance partners, like NYSE Euronext and Deutsche Börse. Perhaps the LSE could establish a strong Asia-Pacific presence by merging with the Singapore Exchange (SGX).
In the meantime, the pool of potential merger partners is shrinking fast. Over the past few years, the smaller national exchanges have banded together to compete with their larger rivals. In Europe, the industry has seen Austria, the Czech Republic, Hungary and Slovenia form the Central and Eastern European Stock Exchange Group (Ceeseg). In South America, Chile, Columbia and Peru joined together for cross-listing issues. And even in Asia-Pacific, Malaysia, the Philippines, Singapore and Thailand are working out the kinks in sharing cross-border liquidity.
If the LSE Group is looking for a partner, it will have to act fast. There was a rumor floated a few months back that it could look to acquire Nasdaq OMX after its TMX Group acquisition. Maybe it's time to pick up that phone, Xavier.
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: https://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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
The TNS–Radianz deal hints at underlying issues in trader voice
Waters Wrap: As part of its cost-cutting program, BT shipped its Radianz unit to TNS, but the deal didn’t include its Trading & Command trader voice property. Anthony finds that interesting.
OEMS interest sputters
Combined order and execution management systems once offered great promise, but large buy-side firms increasingly want specialization, leaving OEMS vendors to chase smaller asset managers in a world of EMS consolidation.
FactSet adds MarketAxess CP+ data, LSEG files dismissal, BNY’s new AI lab, and more
The Waters Cooler: Synthetic data for LLM training, Dora confusion, GenAI’s ‘blind spots,’ and our 9/11 remembrance in this week’s news roundup.
DORA delay leaves EU banks fighting for their audit rights
The regulation requires firms to expand scrutiny of critical vendors that haven’t yet been identified.
Etrading wins UK bond tape, R3 debuts new lab, TNS buys Radianz, and more
The Waters Cooler: The Swiss release an LLM, overnight trading strays further from reach, and the private markets frenzy continues in this week’s news roundup.
Fintech powering LSEG’s AI Alerts dissolves
ModuleQ, a partner and investment of Refinitiv and then LSEG since 2018, was dissolved last week after it ran out of funding.
Halftime review: How top banks and asset managers are tackling projects beyond AI
Waters Wrap: Anthony highlights eight projects that aren’t centered around AI at some of the largest banks and asset managers.
Speakerbus goes bust, Broadridge buys Signal, banks mandate cyber training, and more
The Waters Cooler: The Federal Reserve is reserved on GenAI, FloQast partners with Deloitte Australia, UBS invests in Domino Data Lab, and more in this week’s roundup.