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NASDAQ OMX Group and IntercontinentalExchange Announce Exchange Offer for NYSE Euronext
Reaffirms Seriousness of Their Offer and Continued Willingness to Enter Into Discussion
May 2, 2011--NASDAQ OMX and IntercontinentalExchange (ICE) today announced that each of their respective Boards of Directors have approved their intent to commence an exchange offer to acquire all of the outstanding shares of NYSE Euronext common stock in a cash and stock transaction valued at approximately $11 billion. Under the terms of the offer, each share of NYSE Euronext would be exchanged for $14.24 in cash, 0.4069 shares of NASDAQ OMX common stock and 0.1436 shares of ICE common stock.
If NASDAQ OMX and ICE are successful in acquiring shares pursuant to the offer, they would consummate a second step merger as soon as possible thereafter to acquire the remaining NYSE Euronext shares for the same consideration per share.
ICE Chairman and CEO Jeffrey C. Sprecher said: "The Board of NYSE Euronext has twice rejected our superior proposal without meeting with us, despite the fact that their existing merger agreement with the Deutsche Boerse allows them to talk with us. While we are hopeful that the Board will decide to consider this transaction, we are taking our proposal to NYSE Euronext stockholders upon the commencement of this exchange offer to provide the opportunity to consider our proposal directly."
NASDAQ OMX CEO Bob Greifeld said: "The NYSE Euronext Board has continually challenged the seriousness of our proposal and refused to engage us in discussion despite the positive feedback we have received from their stockholders. The commencement of this exchange offer should convince the NYSE Euronext Board of the seriousness of our intentions. We continue to welcome the opportunity to enter into meaningful discussion with the NYSE Euronext Board in order to achieve a transaction that is in the best interests of their stockholders."
This exchange offer follows an initial public proposal made by NASDAQ OMX and ICE to the NYSE Euronext Board on April 1, 2011 to discuss a possible combination of the companies and the delivery of a draft merger agreement on April 19, 2011 in which NASDAQ OMX and ICE provided significant detail and assurances on their proposal, which contains no financing conditions. On both occasions, NASDAQ OMX and ICE's proposals were summarily rejected by NYSE Euronext's Board without any attempt for engagement or discussion. The complete terms and conditions of NASDAQ OMX's and ICE's exchange offer will be set forth in an offer to exchange/prospectus expected to be filed with the U.S. Securities and Exchange Commission during May.
NASDAQ OMX and ICE remain hopeful that NYSE Euronext will ultimately recognize the value of working with them in a direct and constructive fashion to complete this strategic transaction in a way that is tax-efficient, minimizes regulatory hurdles, and produces the greatest value for shareholders of NYSE Euronext.
Additional Details
All details and other supporting information related to this proposal are available on http://www.nasdaq.com/deal and http://ir.theice.com
Basel III and Our Banks: Overhaul, or Overdraft?
We look at how the tough, new Basel III rules may impact the largest U.S. banks.
May 2, 2011--Basel III is an international accord whose objective is to standardize some banking safety requirements in a worldwide economy. The failure of Lehman Brothers, Northern Rock, and persistent troubles in Greece, Spain, Italy, Ireland and Portugal underscore how shock waves from one nation's problems can reverberate worldwide. Basel III may not be a panacea:
It will not necessarily prevent a subsequent global financial crisis, in our opinion, nor will it completely insulate financial institutions from the unsettling effects of one. However, what Basel III will do is require banks to better prepare themselves for the unknown, including requiring them to bolster their balance sheets by holding additional capital.
OCC Reports Overall Cleared Volume Declined In April As Futures And Securities Lending Volume Continued To Rise
May 2, 2011-- OCC announced that overall cleared volume reached 338,562,433 contracts in April, representing a 7 percent decrease from the April 2010 volume of 363,275,500 contracts. This volume decline was primarily in options contracts as futures and securities lending volumes continued to rise in April. OCC's year-to-date total volume is up 16 percent with 1,498,862,398 contracts.
Options: Exchange-listed options trading volume reached 335,425,947 contracts in April, a 7 percent decrease from April 2010. Average daily options trading volume in April was 16,771,298 contracts, 2 percent lower than April 2010 which had 1 more trading day. Year-to-date options trading volume is up 16 percent with 1,485,309,264 contracts.
Futures: Futures cleared by OCC reached 3,136,486 contracts in April, up 24 percent from 2010. Equity futures came in at 331,209 contracts this month and show a year-to-date average of 14,081 daily contracts. Index and other futures reached 2,804,859 contracts, up 43 percent from 2010. OCC is averaging 165,282 futures contracts per day in 2011, up 54 percent from 2010.
Dealers see delay for swaps reforms
May 1, 2011--Derivatives dealers and investors have told US regulators it could take up to two-and-a-half years to implement rules being devised for the newly policed swaps markets, casting doubts over the G20’s target for derivatives reforms to be operational by the end of 2012.
The issues around how quickly reforms can be implemented will be in the spotlight this week as US market regulators hold two days of public meetings in Washington to thrash out the issues.
read more
Drop in dollar boosts exchange merger
May 1, 2011--NYSE Euronext has found some unexpected support for its proposed merger with Deutsche Börse – the sharp drop in the US dollar is propping up the value of the stock-based deal, which is under assault from a counterbid by Nasdaq and IntercontinentalExchange.
Since NYSE and the German exchange unveiled their plan in February, the euro has gained almost 10 per cent against the US currency, boosting NYSE’s implied value under the merger and roughly halving the premium in the Nasdaq-led counterbid.
NYSE, Deutsche Börse: Danke, Eurobureaucrats
European Commission inquiry may boost NYSE-Deutsche Börse merger; stock pickers can audition for Ira Sohn Investment Conference.
May 1, 2011--The New York Stock Exchange's proposed sale to Deutsche Börse may have just gotten a big lift from pencil pushers on the other side of the pond.
Late last week,the European Commission unveiled two antitrust investigations into credit default swaps, a market dominated by the world's largest banks.
The first EC inquiry focuses on those players, including J.P. Morgan Chase, Bank of America and Goldman Sachs. But it's the second investigation that could have consequences for the NYSE-Deutsche merger and the hostile joint bid by Nasdaq and Atlanta-based Intercontinental Exchange to trump it.
The EC is looking into ICE Clear Europe, which also happens to be the leading clearinghouse for credit default swaps. The company doesn't disclose how much revenue it generates from processing swaps trades in Europe (its global revenue from the activity doubled last year, to $60 million), but whatever money it makes over there is in some jeopardy.
Lessons for Monetary Policy: What Should the Consensus Be? -IMF Working Paper
April 29, 2011--Summary: This paper outlines important lessons for monetary policy. In particular, the role of inflation targeting, which was much acclaimed prior to the financial crisis and since then has not lost much of its endorsement, is critically reviewed. Ignoring the relation between monetary policy and asset prices, as is the case in this monetary policy approach, can lead to financial instability.
In contrast, giving, inter alia, monetary factors a role in central banks’ policy decisions, as is done in the ECB’s encompassing approach, helps prevent these potentially harmful side effects and thus allows for fostering financial stability. Finally, this paper makes a case against increasing the central banks’ inflation target.
view IMF Working paper-Lessons for Monetary Policy: What Should the Consensus Be?
TMX Group and London Stock Exchange Group Joint Statement on Canadian Regulatory Filing Process
April 29, 2011--TMX Group and London Stock Exchange Group (LSEG) have initiated the application process with Canadian federal and provincial authorities regarding their proposed merger.
Application for review under the Investment Canada Act was made today. LSEG has committed to publicly disclosing undertakings made at the conclusion of the review process. As part of the application process, TMX Group and LSEG have held discussions with provincial securities regulatory authorities. Communications regarding these applications, which will be made in the coming weeks, and their publication will be made by the various provincial securities regulators according to their individual processes. All applications will be based on the terms of the merger agreement made public on February 9, 2011.
The Ontario Select Committee has taken considerable time to review the merits of the merger and to prepare a detailed report containing a number of recommendations. This report, as well as other feedback received during the regulatory review process, will receive full consideration during the course of the approval process with the various authorities.
TMX Group and London Stock Exchange Group remain committed to ongoing dialogue with all stakeholders in the weeks ahead and look forward to working constructively with Canadian federal and provincial authorities to achieve the approvals required for the merger.
Progress of the FSB's initiative to promote international cooperation and information exchange.
April 29, 2011--Progress report
The Financial Stability Board in March 2010 commenced an initiative to encourage the adherence of all countries and jurisdictions to regulatory and supervisory standards on
international cooperation and information exchange, including by identifying non-cooperative
jurisdictions and assisting them to improve their adherence.1 This initiative is making good
progress. All but a few of the jurisdictions contacted by the FSB either already demonstrate
sufficiently strong adherence to the relevant standards or are implementing reforms to strengthen their adherence.
The initiative was commenced in response to a call by the G20 Leaders at their April 2009 Summit in London for the FSB to develop a toolbox of measures to promote adherence to prudential standards and cooperation with jurisdictions. It complements similar initiatives by the Global Forum on Transparency and Exchange of Information for Tax Purposes to promote adherence to international standards in the tax area, and by the Financial Action Task Force for standards concerning anti-money laundering and combating the financing of terrorism.
Objective of the initiative
The focus of the FSB’s initiative is on adherence to internationally agreed information exchange and cooperation standards in the areas of banking supervision, insurance supervision and securities regulation. Cooperation and information exchange amongst financial supervisors and regulators are essential for effective oversight in an integrated financial system. Financial markets are global in scope and, therefore, weaknesses in international cooperation and information exchange can undermine the efforts of regulatory and supervisory authorities to ensure that laws and regulations are followed and that the global operations of the financial institutions for which they have responsibility are adequately supervised. 1
‘Blow-up’ warning over Ucits rules
April 26, 2011--FT reports, some industry figures believe a blow-up of a Ucits III-compliant “hedge fund-lite” vehicle will take place in the next two years because managers are pushing the boundaries of existing regulation.
. Regulators are not able to keep pace with how managers are executing their strategies, they say.