JLN Options: SEC Clears Way For NYSE, Deutsche Boerse To Merge

Jan 18, 2012

Lead Stories

SEC Clears Way For NYSE, Deutsche Boerse To Merge
The U.S. Securities and Exchange Commission on Wednesday approved the proposed merger of NYSE Euronext (NYX) and Deutsche Boerse AG (DB1.XE, DBOEF), while leaving room for the European Union to have final say on the deal. SEC officials approved a raft of rule filings by the NYSE Euronext-owned exchanges like the New York Stock Exchange and NYSE Amex, as well as the Deutsche Boerse-owned International Securities Exchange, relating to a change in ownership that would see the markets move under a new parent.

Europe Leans Toward Blocking NYSE-Deutsche Borse Merger
By JAMES KANTER, The New York Times
The European Union’s competition commissioner, Joaquín Almunia, won support on Tuesday from European government representatives on an advisory panel in his effort to block a merger between NYSE Euronext and Deutsche Börse, a move that is one of the last stages before a formal decision on the deal is made early next month…
The recommendation by the antitrust advisory panel, which is not binding, is the latest sign that the regulatory obstacles in the way of the deal may be insurmountable. The deal would put the vast majority of the European exchange-traded derivatives market, and a sizable proportion of the region’s stock trading, in the hands of one company.

EU’s Almunia Pledges to Spur Competition as DB-NYSE Veto Looms
By Aoife White and Nandini Sukumar, Bloomberg
Europe’s top antitrust regulator pledged to use “all available instruments” to spur competition in the region as he prepares to block the merger of Deutsche Boerse AG and NYSE Euronext…
EU regulators told the two companies that they plan to prohibit the deal to create the world’s largest exchange because it would monopolize derivatives trading in the region, according to two people familiar with the draft decision in December. NYSE and Deutsche Boerse appealed directly to European Commission President Jose Barroso last week to try and salvage their merger, arguing an EU ban would harm European exchanges and drive business to other parts of the world.

Bets Against Euro Lose Appeal As Market Calms
By Neil Shah, The Wall Street Journal
Some investors are curbing their negative bets against the euro and other risky currencies as market conditions improve, a sign that after months of tension they’re starting to think Europe’s problems won’t infect the global economy.
For months, hedge funds and other professional money managers have dumped euros and used options bets to wager against the currency because of mounting concerns about Europe’s debt crisis and the global economy. Government data released Friday showed traders had, as of Jan. 10, amassed the biggest negative position on the euro since at least 2007.

OptionsCity Software appoints Margaret Wiermanski as Chief Operating Officer
OptionsCity Press Release January 18, 2012
Chicago – OptionsCity Software, Inc, a provider of end-to-end electronic trading software, has named Margaret Wiermanski as the company’s Chief Operating Officer.
“Margaret is a key addition to our management team,” said Hazem Dawani, CEO of OptionsCity Software, Inc. “Her extensive experience in financial management, operations, and compliance functions will be an asset to the OptionsCity team as we continue our growth and focus on global expansion.”
“I am excited to be part of the OptionsCity team,” remarked Margaret Wiermanski.  “What they have accomplished in a short time is impressive and they have built a solid foundation for its future expansion. What impressed me the most is the genuine enthusiasm of everyone at OptionsCity and their commitment to product ingenuity and customer service.”


CBOE Holdings, Inc (CBOE) Shares Given a “Sell” Rating by Goldman Sachs (GS) Analysts
Posted by LUSA Staff on Jan 17th, 2012   
CBOE Holdings, Inc logoCBOE Holdings (NASDAQ: CBOE)‘s stock had its “sell” rating reiterated by Goldman Sachs (NYSE: GS) in a research note issued on Tuesday.
Separately, analysts at Jefferies Group (NYSE: JEF) cut their EPS estimates on shares of CBOE Holdings in a research note on Wednesday. They now have a “hold” rating on the stock. Analysts at Macquarie downgraded shares of CBOE Holdings from an “outperform” rating to a “neutral” rating in a research note to investors on Thursday, December 22nd. Also, analysts at Oppenheimer (NYSE: OPY) reiterated an “outperform” rating on shares of CBOE Holdings in a research note to investors on Tuesday, November 15th. They now have a $29.00 price target on the stock.

NASDAQ (NDAQ) Given “Conviction Buy” Rating by Goldman Sachs (GS) Analysts
Posted by LUSA Staff on Jan 17th, 2012
NASDAQ (NASDAQ: NDAQ)‘s stock had its “conviction buy” rating reaffirmed by research analysts at Goldman Sachs (NYSE: GS) in a report issued on Tuesday.
Separately, analysts at Zacks Investment Research reiterated a “neutral” rating on shares of NASDAQ in a research note to investors on Thursday, November 10th. They now have a $26.00 price target on the stock.

Options on Futures

PowerShares Plans Active Equity/VIX ETF
By Olivier Ludwig, IndexUniverse
Invesco PowerShares, basking in the success of its low-volatility SPLV, filed paperwork with the Securities and Exchange Commission to market an actively managed equities-based portfolio that seeks to lower investment risks by pairing stocks with instruments related to CBOE Volatility, or VIX, futures.  Apart from equities and VIX-related tools, such as listed VIX futures contracts, the PowerShares Equity Allocation Portfolio will also invest in swaps and notes as well as money market instruments, according to the filing, which was dated Jan. 13.


Exemption for forex swaps and forwards should hold, says GFMA’s Kemp
By Joel Clark, Risk.net
A proposed determination to exempt foreign exchange swaps and forwards from mandatory clearing and exchange trading requirements under the Dodd-Frank Act is very likely to be confirmed, despite a nine-month silence from the US Treasury since it published the text in April 2011, according to James Kemp, managing director of the global foreign exchange division of the Global Financial Markets Association (GFMA) in London…
The global foreign exchange division is working on a number of regulatory projects this year as it seeks to help its members – 22 of the largest forex banks – prepare for mandatory reporting for all forex derivatives, as well as central clearing and exchange trading for those products not exempt, including non-deliverable forwards (NDF) and options.

Could This be the Next Financial Disaster?
By Dave Forest,
I wrote last week about big changes coming to financial regulation in Europe.
Look for the sequel soon in the U.S. America is buckling down for a new era of financial rulemaking…
Another sore point in the wake of the financial crisis has been derivatives. Simply, financial instruments whose value derives from the value of a separate financial instrument. Derivatives range from the relatively simple (options) to the complex (credit default swaps).  Critics say that over the last several years financial industry players have been allowed to write derivatives too freely. The result being this area of finance ballooned. To the point that the estimated total value of derivates outstanding globally is a staggering $615 trillion.


BATS To Move Disaster Recovery Site to Savvis’ Chicago facility
Savvis will buildout and operate a secondary DR site for all three of BATS’s U.S. stock and options markets.
By Ivy Schmerken, Wall Street & Technology
January 18, 2012
Today, BATS Global Markets said it would move its secondary disaster recovery site to the Savvis Chicago CH4 data center facility for all three of its U.S. markets. BATS already has a relationship with Savvis in Weehawken, New Jersey where it hosts the matching engines for BATS’ two equity markets, BZX and BYX exchange as well as the BATS Options Market. BATS’ primary sites will continue to be in Weehawken, N.J., but it will migrate the secondary DR sites to Chicago. As part of the agreement, BAT has extended its existing services contract for hosting its matching engines at Savvis’ Weehawken facility.

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