SEC Works on NYSE-Euronext Tie-Up

NEW YORK—The top U.S. regulator for the securities industry last week reiterated his commitment to work with NYSE Group, which operates the New York Stock Exchange, and Euronext as they move toward a combined exchange.

The planned co-joining between the two exchanges is progressing steadily, with the U.S. Securities and Exchange Commission (SEC) releasing a document detailing the merger’s impact.

The U.S. is "committed to close cooperation and collaboration with our partners in other nations as securities markets and financial services expand globally," says SEC Chairman Christopher Cox. He met with members of his committee Tuesday, Sept. 26, in Lisbon to discuss the pending merger. Discussions there have "gone far in focusing our joint efforts to promote healthy and increasingly efficient capital markets for the benefit of investors," he says. The chairman’s Euronext regulator committee consists of representatives from the Netherlands, France, Belgium, Portugal and the U.K.

The meeting comes days after the SEC released a 750-page document about the merger. In that filing, both sides address concerns that U.S. regulators would be given too much power over the resulting entity. Should the deal go through, the NYSE Group and Euronext would have separate U.S. and European bodies to maintain independence.

Euronext will be handled by a Dutch foundation while the NYSE Group will create a Delaware trust to manage its regulatory affairs, according to the document.

The filings also shed light on how a NYSE-Euronext deal came to pass. The seeds of a NYSE-Euronext merger were planted in January 2006 when NYSE Group president John Thain met with Euronext CEO Jean François Théodore. Being able to produce an exchange with leading technological capabilities was among the selling points of an exchange merger, according to the filings.

NYSE and Euronext officials met again in February at a meeting of the World Federation of Exchanges in Milan, Italy. Euronext officials met with Deutsche Börse representatives in April before entering into an informal agreement with NYSE for a more in-depth discussion about the benefits of a merger. It took approximately two months for both parties to iron out details and make their announcement in June of this year.

NYSE Group and Euronext officials say they are embarking upon an aggressive integration of their transaction platforms, resulting in a cross-asset superstructure in three years (DWT, June 5).