Consolidation fever is still rampant across all sectors of the industry. But none have seen more M&A activity recently than the exchanges and commercial transfer agents. Of course, with mergers usually come layoffs. One such case is BATS Europe, as they get ready to send half of its workforce at Chi-X Europe packing after the merger is completed.
Reports indicate that a chunk of Chi-X Europe's operations and tech staff will get pink slips, as the integration is sure to result in redundancies with BATS Europe's own people. Back in February, BATS Global Markets announced plans to acquire Chi-X Europe pending regulatory approval. Last week, BATS Global Markets filed to go public, and the expectation is that the cash infusion from the IPO will fuel additional acquisitions. Expect more industry shakeups.
Meanwhile, the global commercial transfer agent Computershare is making a play for the shareholder services portion of Bank of New York Mellon. The Melbourne-based shareholder services giant will most certainly find redundancies in their operations, so look to tech and operations once again to lose out. But the news at BNY Mellon could be a big win for the industry's other transfer agents. Look for personnel beef ups to come at American Stock Transfer, Registrar and Transfer, Wells Fargo Shareowner Services, Continental Stock Transfer & Trust, and Broadridge Financial Solutions, as clients of BNY Mellon Shareholder Services scramble to replace the service.
Commercial transfer agents work for investment firms and public companies, handling proxy distributions, investor notifications, and shareholder records. Only a small number of investment firms and publicly traded companies handle the function in-house. Certainly, the improved tech on this end could bring more of this work there, but it seems most aren't looking for the headache. Other investment and banking bigwigs besides BNY Mellon have outsourcing shareholder services arms, including Citi and J.P. Morgan.