Veteran futures trading firm INTL FCStone today performed a sudden U-turn following its previous corporate announcement in May this year to go public on its wish to acquire a controlling interest in Singaporean commodity futures venue Cleartrade Exchange (CLTX).
The change of direction is represented by INTL FCStone’s announcement today that it has no intention in the short term, to acquire any interest at all in CLTX.
SEF On The Horizon, CLTX Off The Agenda
Scott Branch, President of INTL FCStone today issued a statement confirming the firm’s intention not to proceed with the acquisition: “”Since INTL FCStone’s announcement in May 2013 regarding our intention to acquire a controlling interest in Cleartrade Exchange, an extensive due diligence and joint strategy process has been undertaken. Despite the success of this process in terms of verifying CLTX’s operational and business infrastructure, it is with regret that INTL FCStone has determined it is unable to take any stake in the organization at this time” he stated.
Mr. Branch went on to explain that “ this change in strategy is due to the recent publication of further Dodd-Frank rules and the increased complexity and current uncertainty that we see these placing on a business of this type operating in the U.S.,” said Scott Branch, President of INTL FCStone Inc.
What to Look for in a Liquidity ProviderGo to article >>
Richard Baker, Chief Executive Officer of Cleartrade Exchange stated: “Uncertainty associated with recent changes in U.S. regulatory requirements for Exempt Commercial Markets, which CLTX intends to address through its application to be registered in the U.S. with the CFTC as a Foreign Board of Trade (and through interim registration as a Swap Execution Facility), is the only reason INTL FCStone concluded it could not invest in CLTX at this time.”
Mr. Branch further commented: “We continue to be impressed with CLTX as an organization and hope to build a deeper relationship with the exchange going forward as a member and liquidity provider. During our diligence process, some interesting and mutually beneficial business opportunities were identified, and we plan to work with Cleartrade Exchange to leverage our combined expertise in developing these.”
“Naturally we are disappointed with this outcome,” stated Mr. Baker.
“At CLTX, we were delighted with the prospect of INTL FCStone becoming an investor and eventual majority owner in our business. This result is not what either party intended. Getting to know INTL FCStone’s broad business has, however, been a significant and positive process for the exchange.”
Hopeful that negotiations will restart at a later time, Mr. Baker concluded: “I look forward to welcoming them as a member and continuing our close relationship in the future.”
Cleartrade Exchange will not be returning to the market for new investment in the short term and confirms that it will remain wholly owned by its original investor.