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22nd November 2011

Deutsche Borse / NYSE derivatives proposal

Deutsche Börse and NYSE Euronext have offered limited disposals of derivative operations in order to try and gain approval from the European Commission for their proposed merger.


The proposal is for NYSE Euronext to divest its pan-European single equity derivatives business, including Bclear, except the options businesses in its home markets. Deutsche Börse would divest its respective business in the NYSE Euronext home countries. This proposal does not therefore alter the main European competition concern of the new group owning both NYSE Liffe and Eurex, the two largest European derivatives exchanges. The two exchange groups comment "With respect to European interest rate and equity index derivatives, Deutsche Börse and NYSE Euronext propose to grant unprecedented third-party access to Eurex Clearing for derivatives product innovations taking advantage of the merged entity‘s clearing services. The clearing services would be provided on a fair, reasonable and non-discriminatory basis and include cross margining".


The two exchanges also argue that the competition arguments should be viewed on a global basis comparing the proposed grouping against the major US and Asian markets as opposed to purely an internal European view.


The revised proposal automatically adds 15 days on to the review timetable with a decision now expected on January 23rd 2012.