November 21, 2006
CBOT and CME Merger
The President of the Philadelphia Stock Exchange wrote an op-ed in today's Wall Street Journal that both the SEC and Dept. of Justice should read. It deals with the antitrust problems of the CME and BOT merger, the country's two largest exchanges for financial futures. His primary concern is that the futures markets have higher barriers to entry than to the equity markets (both in the trading operations and in the clearing operations) and that the market power of the new market will allow it to engage in monopolistic pricing.
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Not trivial points, by any means. But does anyone doubt that the transaction will close without DOJ opposition?
The issue that gives me some pause relates to innovation: the fact that these exchanges have historically tried to outdo each other on the availability of techie advances. Will that interest continue because of non-U.S. entities or potential entrants?
I think so.
Posted by: Sutton Keany | Dec 13, 2006 1:14:46 PM