Singapore Voices Competition Concerns over LSE's Bid to Buy Refinitiv
- A key concern was how the merged entity will continue to supply Refinitiv’s WM/Reuters FX benchmarks at fair prices.
Singapore’s Competition and Consumer Commission (CCCS) today revealed concerns over the London Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges. A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges. Read this Term’s proposed acquisition of financial data provider Refinitiv. The antitrust watchdog was concerned that a combined company could offer its customers preferential services for critical data and would examine a possible concentration of derivatives trading.
The CCCS also warned about an overlap in the supply of fixed income index and licensing services to customers in Singapore. It had worries about possible anti-competitive effects of the LSE’s $27 billion bid that covers multiple exchanges, trading venues, clearing houses and vast quantities of vital trading data.
A completed deal, says CCCS, would require both LSEG and Refinitiv to provide further details about six categories of products that generate revenue from customers in Singapore. As the combined entity would be one of the world’s largest managers of financial markets, the watchdog needs to be aware how the combined entity will be running (i) trading services; (ii) clearing services; (iii) index licensing; (iv) financial information products; (v) regulatory reporting services; and (vi) IT services/software.
“CCCS is unable to determine at this stage whether competitors are able to deploy effective and timely counter-strategies to mitigate the risk of foreclosure by the merged entity of access to the WM/R FX benchmarks. There is also insufficient information available for CCCS to determine if the competition concerns could be addressed through any existing regulations overseas on the global supply of the WM/R FX benchmarks,” the regulators said.
European Union has similar fears
The CCCS also cited concerns raised by third parties who were worried about the merged entity’s market power in trading and clearing of over-the-counter derivatives used by local and global investors to hedge risks. It said another key concern was how the merged entity will continue to supply Refinitiv’s WM/Reuters foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term benchmarks at fair, reasonable and non-discriminatory terms to rival providers in the market.
“In view of the concerns raised, CCCS will need to consider in more detail the effect of the Transaction in a Phase 2 review,” the watchdog concluded.
Both UK and US regulators cleared the all-stock deal, which was revealed in August 2019. The Committee on Foreign Investment in the United States (CFIUS) said the takeover doesn’t raise any national security concerns. The City watchdog also gave the purchase offer’s circular its backing in November, and LSEG’s shareholders also have overwhelmingly voted in favor of the institution’s planned buyout that will put them in competition with giants like Bloomberg.
European Union regulators, however, cited the complexity and the massive amount of data involved in the deal, which would result in a “very large combined market share” in the electronic trading of European government bonds. And as Refinitiv and LSE have been leading venues, close rivals in this space, it suggests that it will be difficult for a new trading venue to attract clients in sufficient numbers and become a real alternative to their combined business.
Singapore’s Competition and Consumer Commission (CCCS) today revealed concerns over the London Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges. A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges. Read this Term’s proposed acquisition of financial data provider Refinitiv. The antitrust watchdog was concerned that a combined company could offer its customers preferential services for critical data and would examine a possible concentration of derivatives trading.
The CCCS also warned about an overlap in the supply of fixed income index and licensing services to customers in Singapore. It had worries about possible anti-competitive effects of the LSE’s $27 billion bid that covers multiple exchanges, trading venues, clearing houses and vast quantities of vital trading data.
A completed deal, says CCCS, would require both LSEG and Refinitiv to provide further details about six categories of products that generate revenue from customers in Singapore. As the combined entity would be one of the world’s largest managers of financial markets, the watchdog needs to be aware how the combined entity will be running (i) trading services; (ii) clearing services; (iii) index licensing; (iv) financial information products; (v) regulatory reporting services; and (vi) IT services/software.
“CCCS is unable to determine at this stage whether competitors are able to deploy effective and timely counter-strategies to mitigate the risk of foreclosure by the merged entity of access to the WM/R FX benchmarks. There is also insufficient information available for CCCS to determine if the competition concerns could be addressed through any existing regulations overseas on the global supply of the WM/R FX benchmarks,” the regulators said.
European Union has similar fears
The CCCS also cited concerns raised by third parties who were worried about the merged entity’s market power in trading and clearing of over-the-counter derivatives used by local and global investors to hedge risks. It said another key concern was how the merged entity will continue to supply Refinitiv’s WM/Reuters foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term benchmarks at fair, reasonable and non-discriminatory terms to rival providers in the market.
“In view of the concerns raised, CCCS will need to consider in more detail the effect of the Transaction in a Phase 2 review,” the watchdog concluded.
Both UK and US regulators cleared the all-stock deal, which was revealed in August 2019. The Committee on Foreign Investment in the United States (CFIUS) said the takeover doesn’t raise any national security concerns. The City watchdog also gave the purchase offer’s circular its backing in November, and LSEG’s shareholders also have overwhelmingly voted in favor of the institution’s planned buyout that will put them in competition with giants like Bloomberg.
European Union regulators, however, cited the complexity and the massive amount of data involved in the deal, which would result in a “very large combined market share” in the electronic trading of European government bonds. And as Refinitiv and LSE have been leading venues, close rivals in this space, it suggests that it will be difficult for a new trading venue to attract clients in sufficient numbers and become a real alternative to their combined business.