EuroCTP is a project which arose in response to the European Commission’s previously published proposal for an equities tape and aims to tender as the CT provider in the EU’s future selection process.

In the initial announcement declaring the exchanges’ intention to collaborate on a CT back in February, EuroCTP asserted that “the participants are recognised specialists in supplying reliable and high-quality market data and are well-positioned to deliver a CT quickly, efficiently, and to the highest operational standards”.

A CT, across the various asset classes, has been the subject of much debate in the market for some time, with regulators currently welcoming feedback from participants on what shape the final framework should take, both in the EU and the UK.

Speaking to The TRADE, Natan Tiefenbrun, president of Cboe Europe (not a shareholder in EuroCTP), highlighted some key points of consideration: “Our focus remains on ensuring the legislation – still under negotiation – will mandate a consolidated tape that meets the needs of consumers, including essential information from intraday and closing auction phases, is priced to succeed, and fairly rewards all data contributors.”

He added: “Only a tape with these characteristics will lower barriers to participation and support competition and growth in European equity markets. We continue to see members of the exchange consortium pushing in the opposite direction.”

Read more: Battle lines are drawn over European consolidated tape project

In April, five major buy- and sell-side institutions (Barclays, BlackRock, Crédit Agricole CIB, Société Générale and UniCredit) announced their intention to jointly explore the establishment of a consolidated tape for equities and ETFs. In the same statement, the institutions confirmed that they supported the current proposals to include pre-trade data.

The EuroCTP JV is made up of participants across 26 of the EU’s member states and includes: BME, Deutsche Boerse Group, Euronext exchanges (Borsa Italiana, Amsterdam, Brussels, Dublin, Lison, Paris, Oslo Børs), Luxembourg Stock Exchange, and Nasdaq exchanges (Stockholm, Copenhagen, Helsinki, Iceland, Riga, Tallinn, and Vilnius), among others.

The shareholders of EuroCTP are operators of regulated markets and have confirmed their intention to ensure the long-term success of both market participants and retail investors, aiming to maintain and strengthen the European capital market ecosystem. 

The company is set to appoint a board of directors, as well as ensuring that a representative of all the participating exchanges are included in a supervisory board. Jorge Yzaguirre Scharfhausen has been elected chair of that supervisory board, with the chief executive of the business to be announced soon.

Speaking in an announcement, Yzaguirre Scharfhausen said: “The initiative that has led to the creation of EuroCTP is a true representation of European capital markets and shows a broader range of interests than any other consolidated tape proposal, its aim is to strengthen the EU Capital Market Union.

“We are proud to be the first European consolidated tape initiative for equities and ETFs to have established a company. We are now working on the best solution for the provision of a consolidated tape in the European Union.”

EuroCTP explained that the development of the new company has been in the works for more than a year with shareholders having already made ‘significant investments’ and confirming their commitment to fully financing both the development and implementation of the CT.

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Following SIX’s acquisition of BME for €2.8 billion in June 2020, the exchange confirmed in June the following year that it intended to migrate trading and trading services for equities, fixed income and equity-like instruments to the SIX platform, alongside market data dissemination for both Swiss and Spanish markets, to generate synergies following the deal.

The migration, which did not include derivatives trading and services, was originally expected to be completed between the fourth quarter of 2022 and the second quarter of this year. As part of the project, the Spanish market would continue to be hosted in Madrid and the Swiss market in Zurich.

Read more – SIX to consolidate Swiss and Spanish exchange trading platforms

Speaking to The TRADE in September last year, SIX chief executive officer Jos Dijsselhof said: “We want to benefit from integration of technology and corresponding investments, so we will migrate the Spanish trading platform onto the same system as we now use for the Swiss market. We’re going through the whole value chain to see what we can integrate.”

However, a spokesperson from SIX told The TRADE on Wednesday that following months of dedicated planning the consolidation project has been suspended and will be winding down in an “orderly fashion”.

“This very comprehensive preparatory work has now shown that the envisaged consolidation would be more complex than initially expected, especially in technological and legal matters,” a spokesperson from SIX told The TRADE. 

The exchange confirmed it will now be focusing on alternative routes to the consolidation synergies including potential renewal strategies on both bourses’ existing assets. 

“For them [members], there are no changes or consequences – we were only doing comprehensive preparatory work so far. Members will benefit as we will now focus on strategy and investment roadmaps to support the overall growth, excellence and efficiency targets,” a SIX spokesperson told The TRADE.

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Despite total operating income rising 8.9% to CHF 1,498.3 million for 2021, group net profit fell 83% to CHF 73.5 million while earnings before interest and tax (EBIT) also fell 71% to CHF 147.2 million.

The exchange attributed the “substantial decreases” to the opposing effects of “one off” events to do with Worldline share prices last year and in the year prior.

In 2020, SIX partially sold shares in Worldline, while the payment and transactional services company’s merger with payment services provider Ingenico also had a “highly positive effect on the 2020 net financial result” increasing both group net profit and EBIT at SIX.

However, this was followed by Worldline’s share profit being heavily impacted by the announcement of the sale of its Terminals, Solutions & Services (TSS) in 2021 and this subsequently contributed CHF 102.1 million to “the share of profit and loss of associates of SIX”.

“The year before SIX had sold part of the Worldline shares in 2020, which had had an extremely positive effect on the financial result (+274 million Swiss francs). This effect was now absent in 2021,” Daniel Schmucki, SIX Group chief financial officer, told The TRADE.

SIX added that without the effects of Worldline, the exchange would’ve seen its group net profit rise by over a third.

“Because of the high egg effects from the participation in the past two years, it makes sense to look at the adjusted profit,” added Schmucki.

The exchange has set out plans for 4% growth over the next two years, fuelled by cost reductions and by leveraging its synergies with the now wholly integrated BME – this year was the first time to Spanish business contributed for an entire year – alongside the three other acquisitions made by SIX in 2021.

“Given the rapidly evolving state of industry consolidation, M&A has remained key to strengthening the competitive position in core offerings as well as helping improve margins and acquiring additional capabilities and technologies,” the exchange said in its report.

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Trading and trading services for equities, fixed income and equity-like instruments will be migrated to the SIX platform, alongside market data dissemination for both Swiss and Spanish markets.

The migration, which will not include derivatives trading and services, is expected to be completed between the fourth quarter next year and the second quarter in 2023. The Spanish market will also continue to be hosted in Madrid and the Swiss market will be hosted in Zurirch.

“This is an important step in the integration of BME into SIX. Our Spanish and Swiss teams are working closely together on the best approach to this transition and are evaluating how to most effectively support activities and ensure member conversion,” said Thomas Zeeb, global head of exchanges at SIX and member of the executive board.

“This migration ensures that the market gets to benefit from an enhanced trading platform, extended capabilities, new functionalities as well as simplified and improved systems and technology.”

SIX completed its €2.8 billion acquisition of BME in June last year and confirmed it had started planning the integration of the Spanish market two months later. The exchange operator said the integration would be a priority and focus for the firm throughout this year.

The plan to consolidate the Spanish and Swiss exchange platforms are subject to regulatory approval. SIX will keep Spain’s National Securities Market Commission (CNMV) updated on the integration progress and a consultation with market participants will begin to refine the scope of the project.

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Spanish exchange operator Bolsas y Mercados Españoles (BME) has expanded its list of fixed income clearing members with the addition of Italian investment bank UniCredit.

UniCredit has reached an agreement with BME’s central counterparty (CCP), BME Clearing, to become a new operating member in the fixed income segment.

BME confirmed that with the addition of UniCredit, its CCP now has 25 clearing members including other major European banks such as Societe Generale, Credit Agricole, and Banco Santander. UniCredit marks BME Clearing’s third international counterparty from 15 April. 

“The agreement with UniCredit SpA is the result of close cooperation and we expect it will lead to higher volumes in this segment,” said José Manuel Ortiz, chief executive officer at BME Clearing. “Counterparties will be able to take advantage of the liquidity of an international bank of UniCredit’s stature.”

BME Clearing acts as a central counterparty for clearing of simultaneous or repo trades on Spanish, Italian, Portuguese, French, German, Austrian, and Dutch sovereign debt executed on exchanges, electronic platform or other means.

The Spanish stock exchange is being integrated with Swiss exchange operator SIX following its €2.8 billion acquisition which closed in June last year. 

SIX confirmed plans to drive forward with the integration of BME recently and is combining its securities business with BME’s across regions. The combined entity will include a separate trading markets unit and post-trading activities securities services unit. 

“The acquisition of the Spanish stock exchange operator BME, completed in 2020, will help us on all these points. SIX and BME are an outstanding match along the entire securities value chain. The merger will strengthen the competitiveness of both the Swiss and Spanish financial centres,” Jos Dijsselhof, CEO at SIX Group, said in the SIX annual report 2020.

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Launched through its innovation subsidiary BME Inntech, the big data platform aims to improve processes around best execution reporting and TCA for broker, broker-dealer, and fund manager clients to comply with MiFID II requirements.

Under Europe’s MiFID II rules, firms are required to monitor the quality of execution they receive for clients’ orders to ensure they get the best possible result. Broker and trading venue selection must also be justified based on quantitative data.

BME added the big data platform aims to reduce computing times for these processes and allow market participants to generate more customised reports on a specific order flow.

“Over the last few years, we have seen a decrease and standardisation of the commissions (explicit costs) generated from the intermediation of orders. In this context, the implicit execution cost resulting from order management takes on much greater importance,” said Berta Ares, general manager of BME Inntech.

“More and more investment managers rely on TCA reports to measure this implicit cost and use this information in their broker selection procedure.”

BME is currently being integrated with Swiss exchange operator SIX Group following its €2.8 billion acquisition of the Spanish exchange operator in June this year. SIX battled European exchange group Euronext to acquire BME following news that both were in talks for the deal.

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Upon announcing its first half 2020 results, SIX stated that the ongoing operational and strategic integration of the Spanish bourse will be a focus for the exchange throughout the rest of the year.

“The integration of BME and SIX, two leaders in their domestic financial markets, creates a more diversified group with a strong presence across Europe, making it the third largest European financial market infrastructure group, and the 10th largest globally by revenue,” SIX said.

As the deal closed in June, SIX acquired a 93.16% controlling stake in BME. Until 5 September, the remaining 6.84% shareholders of BME will have the opportunity to sell their shares to SIX for €32.98, the same price per share at which SIX bought the majority stake.

Shortly after SIX confirmed its intensions to acquire BME in November, pan-European exchange operator Euronext said it was also in talks to acquire BME. By March, Euronext stated it would not make a bid for BME, as SIX received various regulatory approvals for the takeover from authorities in Spain.

SIX confirmed through its 2019 report published earlier this year that it will continue to look for opportunities to acquire other market infrastructure providers, and that it has sufficient funding to do so.

“As a profit-oriented company, SIX aims not only at completing its task as a financial market infrastructure provider, but also at generating sustainable profit,” SIX Group said in the report. “To continue improving its own efficiency and fulfil its mandate in an increasingly competitive environment in the long run, SIX intends to grow both organically and through acquisitions.”

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SIX confirmed in a statement it had acquired 93.16% of equity share capital in BME for €2.6 billion at €32.98 per share. The accepted offer has been adjusted from the initial bid of €34 per share due to additional dividend payments linked to the deal.   

“SIX is committed to preserving and strengthening BME’s position in Spain,” said Jos Dijsselhof, CEO of SIX. “The combined group will create innovation hubs in Spain and attract new pools of capital to the Spanish market. We look forward to fulfilling the various commitments we have made to the Spanish authorities ahead of the integration process, which we aim to begin as soon as possible.”

As SIX confirmed its intensions to acquire BME in November, pan-European exchange operator Euronext also said it was in talks to acquire the Spanish bourse. In March, Euronext confirmed it would not make a bid for BME, as SIX received various regulatory approvals for the takeover from authorities in Spain.

Under changes to management, Javier Hernani Burzako, CEO of BME, will join the executive board at SIX. Burzako commented that the combined group will be able to better address the growing needs of the Spanish market and expand its global footprint.

“Together we have a stronger business model that will enable us to continuously improve our products and services offering as well as significantly grow our client reach,” he added. “BME will continue to respond to the needs of its clients and its market, as part of a stronger group that is eager to invest and innovate.”

SIX confirmed through its 2019 report published in March that it will continue to look for opportunities to acquire other market infrastructure providers, and that it has sufficient funding to do so.

The post SIX Group completes €2.8 billion BME acquisition as shareholders accept bid appeared first on The TRADE.

The pan-European exchange group confirmed in a statement that despite seeing significant potential synergies for the merger, a competing offer would not create value or generate adequate returns on invested capital for the exchange group’s investors.  

SIX Swiss Exchange is moving forward with its €2.8 billion bid for BME, after the institution gained approval from the Spanish Economy Ministry and Spain’s National Securities Market Commission (CNMV) last week.

Euronext confirmed shortly after SIX made its offer for BME in November last year that it was also in talks with to acquire the Spanish bourse, although never officially made an offer. It said at the time it was in discussions with the board of directors at BME, and would make further announcements on a counter-offer in due course.

“Euronext is convinced of the strong industrial benefits that a combination between BME and Euronext would bring to the Spanish capital markets and the wider European capital markets, in particular to build the backbone of the Capital Markets Union within the European Union,” Euronext said in its most recent statement.

Last year, Euronext found itself competing with Nasdaq to purchase Norwegian stock exchange Oslo Børs. Following various offers and counter bids from both sides, Nasdaq eventually withdrew its bid allowing Euronext to acquire the stock exchange for €625 million.

The post Euronext confirms it will not make bid for BME appeared first on The TRADE.

The CNMV’s approval of SIX Group’s takeover of BME follows approval from the Spanish Economy Ministry earlier this week. It is now up to shareholders of BME to approve the offer of €33.40 per share in cash.

Originally shares were priced at €34 a share, but this was adjusted to €33.40 to make the total equity value of BME €2.79 billion. SIX made an all-cash voluntary tender offer for 100% of the share capital of BME.

“We are pleased to have received authorisation from the CNMV today. We have presented an attractive offer to BME shareholders, with a price that reflects the value of the company and is all in cash. This represents an excellent opportunity for shareholders to tender their shares and cash in at an attractive price,” said Jos Dijsselhof, CEO of SIX.

The Swiss Stock Exchange has been seeking its acquisition of BME since late last year as part of its 2019 growth strategy. The institution remains adamant that it will preserve and strengthen BME’s position in Spain, with plans to maintain the brand, current business activities, and investing in new technologies. SIX Group added the transaction will make it the third largest European financial market infrastructure group.

“BME will benefit from SIX’s expertise across the entire value chain and will have the opportunity to become the leading EU-hub for the world’s largest asset pool. BME will also benefit from SIX’s strengths in financial information and distributed ledger technology, as well as its global reach,” Dijsselhof added.

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