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A-Team Insight Blogs

ICE Outlines Plans for Global Markets and NYSE Technology Assets

Following on from last week’s completion of the acquisition of NYSE Euronext, IntercontinentalExchange has detailed plans to integrate the Liffe derivatives business, spin out the European Euronext cash markets, and split the commercial NYSE Technologies arm, retaining some elements and selling off others.

Highlights of plans – along with the acquisition of the Singapore Mercantile Exchange – detailed on an update call today include:

* The European Liffe derivatives business will be split by the end of the first quarter of 2014 from Euronext and integrated into ICE, alongside its existing futures markets. Liffe will then transition to use ICE technology.

* A new Euronext business – consisting of stock markets in London, Paris, Amsterdam, Brussels and Lisbon – to be created and likely spun out via an IPO, with ICE retaining a holding (though a sale remains a possibility if there is interest). This business would include the UTP matching engine technology used by Euronext and NYSE, and sold to other markets.

* ICE will retain – for now at least – the exchange’s data centres in Mahwah, NJ and Basildon, east of London. Following an analysis of operational costs it was determined that it was less expensive to keep them than move to third party data centre space. However, their asset value will be written down to reflect market price. Co-lo services will continue to be sold by ICE, though it’s unclear whether ICE has any plans to move its matching engines alongside those that came with NYSE.

* Also being retained is the global SFTI communications network. Meanwhile, sales of direct data feeds from the exchange will be integrated back into the NYSE unit of ICE from NYSE Technologies.

* Much of the business of NYSE Technologies will be sold. This includes the FIX Marketplace (aka NYFIX), Appia FIX engine, Data Fabric (aka Wombat), SuperFeed consolidated feed, Dart entitlements and Xilix Asian EMS technology.

So endeth the grand vision embarked on at the beginning of 2009, with a mission to facilitate “low latency trading and flow of transactions,” whether those be executed on NYSE’s own markets or those of its competitors. It was a vision driven by the reality of market fragmentation and which might have worked out, had its planned merger with Deutsche Borse not been blocked by regulators.

For ICE, the focus will be on the global derivatives markets, though the flagship NYSE trading and listings operations will be retained. Technology will also continue to feature in its operations, though in a pragmatic market support role for its own needs, hopes and dreams.

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