Well, on the one hand you have the forecast from Bob Greifeld, Nasdaq CEO -
The global stock exchange industry will see continued fragmentation in spite of attempts to consolidate it by big sector participants
On the other hand you have Duncan Niederauer, NYSE chief expecting only four to five global players in the exchange space in three to five years along with smaller players reports Anuj Gangahar in Tuesday’s FT.
In this interview with the FT Mr Greifeld’s welcomes competition, if only to quell the fears of a pricing monopoly by the big players. “I think we need to strike the right balance between fragmentation and centralisation,” he said, “more and more “exchange-like” institutions will emerge. Recent regulatory changes essentially allow electronic communications networks and other smaller players to compete,” he told the Financial Times.
In the US, the recently adopted Regulation National Market System (Reg NMS) requires orders to be executed at the best price available, no matter where that is published. This has proven beneficial for quicker, more nimble systems than traditional exchanges, providing more opportunity for smaller exchanges and dark pools to compete. However fears remain that exchanges with too much market share can form monopolies.
Nasdaq’s $625m transaction to buy Philadelphia exchange is expected to close this quarter and the complicated deal to with Stockholm-based OMX has just been given the green light from the Committee on Foreign Investment in the United States (CFIUS), giving Nasdaq a key foothold in the derivatives business. There have been several high-profile mergers between exchanges in recent years, with the New York Stock Exchange merging with Euronext to form the first transatlantic stock exchange, the Chicago Mercantile Exchange merging with the Chicago Board of Trade to form the CME Group says Anuj.
But it is surely in Mr Griefeld’s interest not to promote the idea that exchange monopolies are taking over…
