Exchange Mergers Will Pressure In-House Tech, But Integration Specialists Will Be Hot
Hard to believe that the world's various exchanges - thanks to a ton of merger activity - have been whittled down to a select few. And the mergers aren't over. NYSE Euronext shareholders are balking at the acquisition by Deutsche Börse AG, and they're now mounting a number of shareholder lawsuits over the share swap terms. Despite the pending action, industry insiders say the acquisition will most likely happen.
Meanwhile, talks are on to sell Chi-X Europe to the BATS Global Markets. And, the London Stock Exchange Group and TMX Group have announced "an all-share merger of equals."
Surprisingly, this time consolidation isn't necessarily a usual dirty word. The trader crowd's already been thinned out by the move upstairs. Trading, risk management and clearing may actually pick up given the increased opportunities with a global customer base.
Who should be scared? This is the one time when in-house tech spots could be on the line, as the merged exchanges look to streamline operations. Of course, tech folks in the middle and back office will find it easier than the trading crowd to find new spots.
It's likely, too, there could be more shakeups in the middle and back office, given predictions for more exchange merger activity ahead. Outside tech vendors, at least for the short-term, are likely to benefit as the combined firms look to integrate trading platforms and other operations.