UPDATE: ICE Chief Takes Jab At Tie-Up Trend Among Rival Exchanges

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.

Four years ago, Sprecher unsuccessfully sought to scuttle the Chicago Mercantile Exchange's takeover of the Chicago Board of Trade with his own hostile bid.

Sprecher has opted to take a back seat in the 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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