Profile | Hans-Ole Jochumsen
response has been to launch NLX (the derivatives venue trading interest rate contracts) and make other investments so we that can be on the frontline when things start moving. This is why last year we bought a 25% stake in the Dutch trading venue, The Order Machine (TOM), a three year old platform that trades Dutch, Belgian and French stocks and associated derivatives. It currently accounts for around 20% of Dutch options contracts, a significant market share in one of Europe’s most active options markets. The initial focus will be on developing the Dutch market but our goal is to build a pan-European equity derivatives business. We think there are good signs for the future and we have a five year option to buy up to 50.1% to give us majority control. The rationale is the same as for our other businesses in that we want to be able to use our scale as an advantage and offer cost-effective solutions to clients. For example, both NLX and TOM will use the same data centre in London.
At what stage are you with NLX? We plan to launch it this year. It will offer a range of both short-term interest rate (STIRs) and long-term interest rate (LTIRs) euro- and sterling-based listed derivative products. It will also provide competitive execution and clearing fees and significant margin efficiencies using NASDAQ OMX Genium Inet technology and a partnership with
LCH.Clearnet.
What are your plans in the power market? We are looking to expand in the German power market, which is the largest in Europe. We have increased our offering to include monthly, quarterly and yearly contracts as well as German options. This will supplement the clearing services we already offer for the Nordic power market. We see further opportunities in both markets as well as the UK.
What was the reason behind the acquisition of Thomson Reuters’ investor and public relations units? We just got regulatory approval and the integration planning is at full speed. Adding the Thomson Reuters portfolio to our offering will help diversify
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the corporate solutions business by adding $150m in revenues and around 7,000 customers. The group offers online information, multimedia and tools for investor relations and public relations professionals.
What do you think about the merger between EuroCCP and EMCF? With this transaction we’re creating a cash CCP that will offer our Nordic clients substantial collateral efficiencies, in addition to new innovative clearing services. We’re also making sure that our clients can clear almost their entire Nordic equity flow within the same liquidity pool. Over 90% of the Nordic flow can be cleared through the new CCP. As a shareholder in the largest cash CCP in Europe, we will have even better possibilities to influence the clearing industry to develop in a direction that we think will benefit our Nordic client base.
Do you envision taking part of any consolidation in light of the possible merger between ICE and NYSE Euronext? We would of course have to evaluate the Euronext business case if the deal would mean that it becomes available. That however doesn’t necessarily mean we would bid on it. It’s difficult to gauge now as it is likely to be a lengthy process.
What do you think are the main challenges facing the industry? I think the decrease in the initial public offerings market is a big problem and is connected to the Eurozone crisis. The other great challenge is the capital requirements that banks are facing. They are reducing their loans and as a result, small and entrepreneurial companies which are viewed as risky are not getting the necessary funding to develop their business. There needs to be out-of-the-box thinking in how to improve the situation. One concept that’s being discussed is to harmonise the corporate bond market across Europe. Each country currently has its own set of rules. Another is the impending Green Paper from the European Commission which addresses the long-term financing of the European economy. ■
Best Execution | Spring 2013
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