Global Securities Exchanges Landscape

October 9, 2007

Abstract

Paris, France 9 October, 2007

Global Securities Exchanges

The global capital market is undergoing a series of major structural changes, due largely to demutualization, consolidation, and competitive threats from alternative trading systems.

The exchange industry is evolving rapidly. Worldwide competitive pressure has motivated many exchanges to change their structural model of governance from member-owned and not-for-profit organizations to publicly traded companies. The 12 major exchanges are all demutualized organizations in terms of revenues, and only four of them are unlisted companies.

The exchange industry has consolidated at both the regional and global levels. This process has been accelerated over the past two years with the NYSE-Euronext merger, which created the largest stock exchange worldwide, in addition to the merger of CME and CBOT, which resulted in the world's largest derivatives exchange. According to a new report from Celent, , demutualization and consolidation will continue in the near future.

"Demutualized structures are more flexible and reactive to the fierce competition," said Perrine Fiorina, Celent analyst and author of the report. "Consolidation represents the means of achieving revenue and cost synergies towards expanding trading activities and diversifying revenue sources."

Other key findings of the report include:

  • The majority of exchanges diversify their revenue sources and not only provide listing, trading, and information services but also post-trading services and technologies. Furthermore, many exchanges offer both securities and derivatives trading.
  • The American NYSE and Nasdaq exchanges are still leaders in volume and value, but exchanges in the Asia-Pacific region have been the most dynamic and fastest growing markets over the past two years.
  • The global value of initial public offerings reached a record in 2006, with US$246 billion raised through 1,729 IPOs. The first half of 2007 has also been impressive.
  • Derivatives instruments have become more and more popular, with global derivative trading volume increasing by a compound annual growth rate of 22% between 2000 and 2006.

This report also provides an analysis of the major equities and derivatives exchanges' strategies towards facing competition with alternative trading systems (ATSs), brokers, and private equity firms.

A table of contents is available online. The 31-page report contains 22 figures and four tables.

Members of Celent's Securities & Investments research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary 03
Overview 04
Industry Trends 05
  Demutualization 05
  Business Environment Changes 07
  Consolidations 09
Major Equity Exchanges 12
  Exchanges' Revenue Structure 12
  Equities Trading Volume and Value 14
  Listing Services 18
  Other Services 20
Major Derivatives Markets 23
  Derivative Market Trends 24
  Major Derivative Products 26
  Derivative Exchanges' Revenues 29
Conclusions 31

 

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