ICE Chief Takes Jab At Tie-Up Trend Among Rival Exchanges
February 11 2011 - 2:08PM
Dow Jones News
The head of IntercontinentalExchange Inc. (ICE) on Friday took a
gentle swipe at the latest wave of industry consolidation,
describing operators with large cash equities franchises as
"disruptors" trying to bulk up in the more profitable derivatives
business.
Jeff Sprecher, chairman and chief executive of the
commodity-focused exchange operator, also contrasted efforts by ICE
to provide more mobile trading opportunities with rivals' heavy
investment in "hard-wired" technology aimed at desk-bound market
participants.
Sprecher has been a key industry innovator and consolidator. The
development of ICE from energy products through commodities and
into the emerging over-the-counter space has seen the company in
the past linked as a potential partner to both Deutsche Boerse AG
(DBOEF, DB1.XE) and NYSE Euronext (NYX), which themselves are in
talks over a possible tie-up.
The latest transatlantic merger plans revealed this week have
focused attention on how exchanges that aren't involved might
react.
"They are trying to get scale in order to be able to muscle
their way in--or acquire their way into derivatives," said Sprecher
of recent moves by what he termed as "cash equities exchanges" to
consolidate. He was speaking at an industry conference in
Miami.
NYSE Euronext and Deutsche Boerse, through its Eurex arm,
dominate the market in listed derivatives based on financial
products in Europe, though they have only a modest presence
elsewhere. Also, efforts to expand in over-the counter, or OTC,
business have been patchy.
ICE is the clear market leader in OTC business on both sides of
the Atlantic, as well as a strong European energy franchise.
The company this week already has signaled that it has no plans
to take a role in the planned merger of the London Stock Exchange
Group PLC (LSE.LN) and Canada's TMX Group Inc. (TMXGF, X.T) through
a move on the Canadian exchange.
Sprecher has opted to take a back seat in this latest round of
consolidation, so far, though he gave the NYSE-Deutsche Boerse plan
another poke with comments on trading technology.
NYSE Euronext has touted the advantages of its two new data
centers in the U.S. and the U.K. offering faster and more efficient
trading options. Sprecher said ICE had "a huge strategic advantage"
through its investment in mobile trading technology, including the
recent acquisition of an iPhone application provider, that he said
helped it expand in emerging markets.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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