Day: 29 March 2018

CME and NEX: Building the Supermarket

If there’s one thing that has become abundantly clear over the past few years, it is that many OTC platforms have decided that they need to scale their businesses up and out in order to be successful in today’s FX market.

This was made abundantly clear in a press call today when Terry Duffy and Michael Spencer, respectively the CEOs of CME Group and NEX Group, talked about the logic behind their $5.4 billion tie-up.

“Effectively, what we’re building is a bigger supermarket,” said Spencer. “Why do people shop in supermarkets? Because it’s convenient to buy everything in one place.”

CME Group Set to Acquire NEX

CME Group is set to acquire NEX in a transaction valued at £10 per share, consisting of 500 pence in cash and 0.0444 CME Group shares.

The proposed transaction has been approved unanimously by the board of directors of both companies and is expected to close, pending approvals by regulators and NEX shareholders, in the second half of 2018.

“At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, this acquisition will allow us to create significant value and efficiencies for our clients globally,” says CME Group chairman and CEO, Terry Duffy. “As one organisation, we will be able to employ the complementary strengths of each company to serve a wider client base while diversifying our combined businesses across futures, cash and OTC products and post-trade services.”

And Another Thing…

This won’t take long as it’s a long weekend for most in the markets, including me! Just to reminder subscribers that we will have the latest in our monthly Insight calls next Wednesday – I thought we’d give you an extra day to get things back in order – and there is plenty to talk about.
I’ve already had a couple of messages about the events of the past month, possible bids for NEX, unfair dismissal claims being won and the Cartel traders making their first appearance in court, so we can discuss all of that if we have time, plus there is something I want to get into regarding the FX market structure.
So, it will be great to have you join us – this is only open to subscribers – and I look forward to a nice long weekend preparing some ammunition for Wednesday!

Sada-Paz Exits BAML?

Market sources tell Profit & Loss that Mauricio Sada-Paz, EMEA head of e-FICC and global head of e-FX sales at Bank of America Merrill Lynch, has left the bank.
The sources say that he is joining Barclays in London as global head of e-FICC distribution.
Sada-Paz joined Bank of America in 2010 from Goldman Sachs, where he spent 10 years, in the FX business, culminating in him running the Iberian sales business.