EXCHANGE NEWSWIRE, 8 June 2011
DB1 will buy out Eurex’s co-owner SIX Group to gain full ownership of Eurex, and DB1 will pay EUR 295m ($432.7m) in cash and EUR 295m in shares of the combined DB1-NYX entity. The agreement will be completed as of Jan 1, 2012, and DB1 will receive all Eurex sales and profits rather than the 85% reflected in DB1’s consolidated accounts.
DB1-NYX merger: DB1 and NYX said they would pay shareholders a special dividend after the deal closes in order to gain support for the deal. DB1 shareholders, who would own 60% of the new entity, will receive EUR2 per share, and NYX shareholders, who will vote on the deal on July 7, would get EUR 0.94 ($1.37) per share.
CME Clearing Europe expanded its product offerings to include new diesel and biodiesel contracts. The firm will also add Credit Suisse as its latest clearing member firm, bringing the total number of clearing members to 16.
ICE CEO Jeffrey Sprecher commented that he was still interested in NYX’s Liffe derivatives market and that “things aren’t over yet”, and that despite the NDAQ-ICE proposal being rejected by NYX. “I’m glad we did it” and that a lot of people “have been supportive of our attempts to be disruptive”.
CETIP and Clearstream will launch their collateral management outsourcing offering in mid-July, which will be based on Clearstream’s collateral management infrastructure. The service will initially focus on collateralization of CETIP-managed OTC derivative exposures, before targeting assets eligible at Clearstream to fulfill collateral obligations out of a bigger collateral pool.
Baltex, the Baltic Exchange’s dry freight derivatives electronic venue, launched trading today and principals who have signed up to trade include AM Nomikos, Cargill, CTM, Morgan Stanley, M2M, Pacific Basin and Toepfer.
UK Finance Ministry’s deputy director for securities and markets, Hannah Gurga, spoke “against regulation that stifles competition, introduces barriers to entry or create and reinforce monopoly positions” at London’s “derivatives week” conference. Gurga also stated that “we will use evidence based analysis to persuade other member states and parliaments” not to legislate for monopolies.
US Treasury Secretary Tim Geithner warned that another global crisis would be eminent if Asia does not adopt US regulations on derivatives transactions, and that Asian “progress” on derivatives was essential to prevent regulatory arbitrage. In response, the Monetary Authority of Singapore (MAS) rejected the suggestion that it had weak regulations, and the Hong Kong Monetary Authority (HKMA) said that it its banking supervision was already stricter than international standards.
CFTC Commissioner Bart Chilton is expected to speak against the use of “allocation algorithms” at certain exchanges which allow HFT traders to “cut the queue and get ahead of other traders” and gain preferential access to deals. Chilton had also said that “there is every reason to believe that a cheetah’s algo program could determine the size of the order than would allow them to cut the queue”.
CFTC members will meet on June 14 to consider allowing the OTC derivatives market to function as usual until the termination of new rules, which is expected to miss the July 16 deadline.
Provided By: Equity Research Desk, www.erdesk.com
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