UPDATE: CME And BM&FBovespa To Develop New Trading Platform
February 12 2010 - 10:40AM
Dow Jones News
CME Group Inc. (CME) said Friday that it would enhance its pact
with Brazil's BM&FBovespa SA (BVMF3.BR) with a new joint
trading platform that they may market to other financial
exchanges.
The move pushes the Chicago exchange group and its partner into
the highly competitive technology sector, alongside rivals such as
NYSE Euronext (NYX) and Nasdaq OMX Group Inc. (NDAQ).
BM&FBovespa will also boost its stake in CME to 5% from
1.8%, in line with the cross-holding already held by the Chicago
exchange operator, which announced a parallel share-buyback
plan.
The Brazilian exchange said it will press ahead with a separate
deal for Nasdaq OMX to provide it with a new order routing
system.
CME and BM&F plan to develop a new trading system working
across a range of asset classes, including cash equities and
derivatives.
The Chicago exchange has eschewed a move into equities to focus
on its core derivatives business, while BM&F offers securities
and futures.
CME Chief Executive Craig Donohue said the agreement "will allow
us to provide a range of services across a broad spectrum of
products and asset classes."
He said: "BM&F is going to be implementing its system for
both the cash and derivatives segments. We'll continue to use CME
Globex platform but will look to use any enhancements beneficial to
our customers and incorporate them into our platform."
As part of the agreement, BM&FBovespa will buy shares of CME
at $275.12 each, a 3.5% discount to Thursday's closing price. The
purchase represents a total investment of about $620 million and
brings BM&FBovespa's total stake in CME to approximately $1
billion.
CME said it plans to buy back up to 2.35 million shares of its
stock, offsetting the dilution from shares issued to
BM&FBovespa, which will receive a seat on CME's board.
The new high-speed platform is expected to launch in early 2011,
when it will replace BM&FBovespa's existing trading
systems.
- Jacob Bunge, Dow Jones Newswires; (312) 750 4117;
jacob.bunge@dowjones.com
CME (NASDAQ:CME)
Historical Stock Chart
From Jun 2024 to Jul 2024
CME (NASDAQ:CME)
Historical Stock Chart
From Jul 2023 to Jul 2024