You can trade anywhere these days. So why not demand a bribe?
Fresh from their success sinking the CMDX, the CDS clearinghouse founded by the Chicago Mercantile Exchange and Citadel Investment Group, the Wall Street oligarchs are now insisting upon tribute from the New York Stock Exchange.
The Big Board is selling a "significant stake" in its U.S. futures exchange, NYSE Liffe U.S., hoping to drum up business after seeing its revenue and profit plummet in the third quarter. It's worked before: NYSE Euronext sold off a stake of its NYSE Amex Options platform last year, quickly boosting its market share. And while Citadel and the CME tried--and failed--to go it alone, the Intercontinental Exchange built a dominant CDS clearinghouse with the backing of nine banks.
Hell, even Citadel is getting in on the action, with its headless securities business joining Getco, Goldman Sachs, Morgan Stanley and UBS in getting its slice of NYSE Liffe U.S.
"History clearly shows that some of the most successful ventures have come out of a semi-mutualized approach with the dealers," Duncan Niederauer, the NYSE Euronext chief, said, explaining the pandering. Hard to imagine that an exchange's users would want to "extract value and liquidity from their order flow." It's like putting your call options on a Discover card.
Lower Sales Weigh on NYSE Euronext Results [WSJ]
Citadel, CME Shutter CDS Platform, Bring In New Partners [FINalternatives]
Citadel-Backed CDS Clearinghouse Gets Cold Shoulder [FINalternatives]