Stockholm and New York December 10, 2012 - NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) today announced the acquisition of 25 percent of the Dutch cash equity and equity derivatives trading venue TOM, The Order Machine. The agreement also includes an option for NASDAQ OMX to acquire an additional 25.1 percent of the remaining shares and secure a majority stake in TOM.
The transaction provides TOM global reach and scale and delivers on NASDAQ OMX’s strategy to expand its derivatives presence across the European market. The current owners will remain shareholders, and as co-owners BinckBanck will provide order flow and Optiver and IMC will provide liquidity in the Dutch market. The fourth co-owner ABN AMRO will also connect to TOM.
“This transaction creates a compelling combination of technology, market expertise, and geographic opportunity,” said Hans-Ole Jochumsen, Executive Vice President, Global Data Products and Transaction Services Nordics, NASDAQ OMX. “As the only derivatives MTF in Europe with a retail focus, TOM has secured significant market share in single stock options. We intend to leverage their first mover advantage and seize the opportunities created by the regulatory environment in Europe, by expanding investor access to products and markets that improve price discovery and lower trading costs.”
Through the development of the proprietary search engine ‘TOM Smart Execution’, prices in different markets are compared in milliseconds, ensuring that the client’s order is executed at the venue showing the best available price at that moment. Smart Execution has helped TOM secure a market share of approximately 15 percent for single stock options in the Netherlands. The Netherlands is one of the most developed options markets in Europe with a trading volume of 75 million contracts in 2011.
NASDAQ OMX will act as market operator for TOM, and will provide a Genium Inet based trading platform in London, according to an 8 year contract the two firms have signed. The partnership also builds on TOM’s current usage of NASDAQ OMX-powered market technology, specifically, Marketplace for Hire (M4H), which is a multi-market, multi-asset marketplace solution for trading.
“We believe TOM has significant geographic expansion opportunities and now will be able to leverage NASDAQ OMX’s global network and proven track record of market penetration,” said Willem Meijer, CEO of TOM. “Moreover, with their progressive technology and market expertise, we believe NASDAQ OMX and TOM can deliver on the investor demand for access to a variety of derivative products.”
Upon completion of this transaction, NASDAQ OMX will have one seat on the Supervisory Board. TOM will also hire one person from NASDAQ OMX to the Management Board. The acquisition is subject to regulatory approval.
The acquisition will not have a material effect on the results or the financial position of the NASDAQ OMX Group.
About NASDAQ OMX
The inventor and transformer of the electronic exchange, The NASDAQ OMX Group, Inc., fuels economies with revolutionary technologies for the entire lifecycle of a trade - from risk management to trade to surveillance to clearing. In the US and Europe, we own and operate 23 markets, 3 clearinghouses and 6 central securities depositories supporting equities, options, fixed income, derivatives, commodities, futures and structured products. Able to process more than 1 million messages per second at sub-80 microsecond speeds with 99.999% uptime, our technology drives more than 70 exchanges in 50 developed and emerging countries into the future, powering 1 in 10 of the world’s securities transactions. Our award-winning data products and worldwide indexes are the benchmarks in the financial industry. Home to 3,400 listed companies worth $5.1 trillion in market cap whose innovations shape our world, we give the ideas of tomorrow access to capital today. Welcome to where the world takes a big leap forward, daily. Welcome to the NASDAQ OMX Century. NASDAQ OMX Nordic and NASDAQ OMX Baltic are not legal entities but describe the common offering from NASDAQ OMX exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga, and Vilnius.
About TOM (The Order Machine)
TOM is an alternative trading venue in The Netherlands offering equity and option trading and aiming at maximum competition between markets. To be able to guarantee best execution of client orders, TOM developed a search engine (‘TOM Smart Execution’) which compares prices at lightning speed between markets. The client’s order is executed at the venue showing the best available price at that moment. TOM has acquired a substantial position in equity and option trading.
NASDAQ OMX media contact:
Martin Hedensiö +46 8 405 6254
Joseph Christinat + 1 646 441 5121
John Sweeney + 1 212 401 87 37
Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about NASDAQ OMX's products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ OMX's control. These factors include, but are not limited to factors detailed in NASDAQ OMX's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.