Exchange Sector Review - Week ending February 5, 2010
This week:
The sector was down -2%, underperforming global equities by 100bps, while Interdealer brokers were down -500bps. YTD the sector is underperforming global equities by 606bps.
TMX will cut trading fees by half for securities trading under $1 on TSX and TSX Venture Exchange effective March 1. TMX will charge 3 cents per 100 shares for removing liquidity and rebate 1 cent per 100 shares for adding liquidity to the order book. The reduction in fees will reduce revenue by $15 to $18 mn or 3% on an annual basis (see page 7).
NDAQ plans to launch its third stock-exchange platform, Nasdaq OMX PSX, by May 2010. The exchange will have price/size priority market structure, acquired in the acquisition of the Philadelphia Stock Exchange in 2007.
CME is seeking to buy Dow Jones’ index business, the WSJ reported. The two companies could have announced a deal last week, but they could not reach a final agreement on the price and terms. Dow Jones wants $700 mn for the index business, which makes $90 mn in annual revenues.
CBOE members would vote on April or May on an IPO proposal. CBOE is analyzing different dividend schemes to build member support for an IPO. It would also offer to buy back shares.
US Treasury Secretary Geithner testified yesterday before the Senate Budget Committee defending the 2010 budget which stipulates that “the income earned on a so-called "carried interest" be taxed as ordinary income and not at preferential capital gains rates” and includes “the President’s Financial Crisis Responsibility fee to be imposed on our largest financial firms” which “can and will be extended until every penny of taxpayer assistance from TARP has been repaid.”
The CFTC will use its expanded budget (28% higher in Obama’s proposal) to create the Planning Office and Office of Risk Management, which would allow the Commission to "to more effectively anticipate and react to emerging risks to markets and institutions."
Provided By: Equity Research Desk, www.erdesk.com