TSE and NYSE Euronext explore mutual access
NYSE Euronext, which recently agreed to merge with fellow exchange operator Deutsche Börse, has signed a letter of intent with Japan's Tokyo Stock Exchange (TSE) to give members access to each other's markets through a network linkage.
Customers of the TSE will be able to use Arrownet, the TSE's trading and information network, to access NYSE Euronext markets, while customers of the transatlantic exchange operator who use its Secure Financial Transaction Infrastructure (SFTI), will be able to connect to the TSE. The multi-functional network would provide market data and will allow users to translate order formats avoiding the cost of development work that would otherwise be needed.
Both parties will explore the potential of jointly expanding the network linkage to Asia, to allow investors to trade cross-borders and globally.
The two exchanges have existing connections across their derivatives markets. Japanese government bond futures were launched on the Liffe derivatives market in 1987, prior to its acquisition by Euronext in 2002. NYSE Liffe recently listed futures on the TSE's TOPIX index under licence and a clearing link is in place for the daily transfer of open positions from NYSE Liffe to the TSE. In Q4 2011, the TSE's futures market will migrate onto the Tdex+ platform, based on NYSE Euronext technology, that already supports the TSE options market.
“Our collective goal is to leverage our technology and expertise to create a global trading community with direct access to the world's foremost markets,” said Duncan Niederauer, CEO of NYSE Euronext.
Atsushi Saito, president and CEO of the TSE, added that the agreement would give the investors of Europe and the US more opportunities for investment in Asia, while Asian markets would have exposure to capital outside of the region, and expressed hope that the TSE could become a “bridge between continents”.