ICE CEO: A Dow Jones-S&P Index Deal Would Raise Competition Issues
11 Outubro 2011 - 5:16PM
Dow Jones News
A potential deal to combine the Dow Jones and Standard &
Poor's stock index businesses could pose antitrust questions for
the derivatives industry, according to the chief executive of
IntercontinentalExchange Inc. (ICE).
"It raises interesting competition issues," said Jeff Sprecher,
CEO of ICE, which has competed for rights to list contracts on key
indexes.
Deal talks between S&P parent McGraw-Hill Cos. (MHP) and CME
Group Inc. (CME), majority owner of the Dow Jones indexes, were
reported in late September and seen giving CME a 25% stake in a
combined index business managed by McGraw-Hill. Both firms have
declined to comment the matter.
Such a deal is seen granting CME long-lasting control over use
of the two best-known benchmarks for U.S. stocks for the purpose of
trading futures and options. Contracts linked to the value of the
S&P 500 make up the most heavily traded stock-index derivatives
traded by both CME and the neighboring Chicago Board Options
Exchange.
Exclusive licenses to trade index-based products are closely
guarded by exchanges and have been the subject of intense
negotiations in the past. Sprecher's ICE in 2007 successfully
wrested from CME the license to trade futures on the Russell 2000
index of small-cap stocks, a closely watched contest that
ultimately saw trading in the market shift from CME to ICE in
September 2008.
Last year, the U.S. futures market run by NYSE Euronext (NYX)
obtained a license to trade contracts linked to MSCI Inc. (MSCI)
indexes, which previously had traded at CME.
In the options market, the International Securities Exchange has
for years been waging a legal battle to loosen CBOE Holdings Inc.'s
(CBOE) grip on S&P 500 options contracts, for which the CBOE
holds an exclusive license.
Talks between CME and McGraw-Hill were reported to be ongoing
and no deal was certain to happen. Sprecher noted in an interview
Tuesday that the issue has arisen as European competition
authorities have taken a closer look at the tie-ups between
exchanges and stock indexes.
European exchanges such as the London Stock Exchange Group plc
(LSE.LN) have pushed for a more open system of licensing stock
indexes with some of the region's most widely followed benchmarks
owned by rivals like NYSE Euronext and Deutsche Boerse AG (DB1.XE),
which are progressing with a merger sealed in February. The issue
is among several being examined by the European Union antitrust
officials now weighing the deal.
-By Jacob Bunge, Dow Jones Newswires; 312 750 4117;
jacob.bunge@dowjones.com
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