Deutsche Boerse Not Losing Sleep About ICE as Trading Rival
Traders Magazine Online News, January 22, 2013
The chief executive of Deutsche Boerse said he’s not worried by the prospect that IntercontinentalExchange will become an equities and derivatives powerhouse, if it succeeds in its plan to acquire the operator of the New York Stock Exchange.
The German exchange operator was blocked by European antitrust regulators from buying NYSE Euronext last year,
“It hasn’t caused us any sleepless nights,” Reto Francioni, chief executive officer of Deutsche Boerse, said in an e-mailed version of a speech he planned to make at the company’s annual New Year reception in Eschborn, Germany, Monday evening. “We anticipated a step such as the ICE -- it could have been another non-European stock exchange organization -- and prepared ourselves for it very early on.”
ICE, the 12-year-old energy and commodity futures bourse, agreed on Dec. 21 to acquire NYSE Euronext for cash and stock worth $8.2 billion. European Union regulators blocked Deutsche Boerse’s purchase of NYSE last year, citing concern over competition in derivatives and clearing and rejecting arguments the combined exchange would be a regional champion.
“Through that merger, Europe would have been able to increase its influence significantly on a positive and socially responsible design for world markets,” Francioni said. “I think that Europe wasted an essential opportunity.”
Separately, the New York Times on Sunday reported that ICE’s chief executive, Jeffrey C. Sprecher, ”has probably done more than anyone else to dismantle the trading floors of old.’’
When Enron collapsed in scandal at the outset of the last decade, business started to pour in to his electronic trading platform for electric power, the Continental Power Exchange.
In 2001, ICE acquired the International Petroleum Exchange in London. In a few years, ICE “shut down the historic trading pits at the London exchange in favor of computerized trading.”
In 2006, when Sprecher eyed the New York Board of Trade, he “was initially attentive to the concerns of the floor traders,’’ according to the report. But he moved most trading to computer screens. In October 2012, he ended its “open-outcry” floor trading.
Now, Sprecher says he’s committed to continuing floor trading at the New York Stock Exchange. But the Times noted:
“From the beginning of ICE, Mr. Sprecher was seen by the old-time traders as a tool of Wall Street banks that wanted to supplant local traders at the exchanges — a reputation he has never managed to shake fully.”
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