Exchange Partnerships to Continue

Terry Flanagan

Exchanges have been looking toward forming cross-border alliances and partnerships as a way to boost their reach.

Deutsche Borse recently announced the formation of a mutual development partnership with the Istanbul Stock Exchange. Under the agreement, the two exchange operators will work together in several business areas, including the development of new research and technology, assisting each other in marketing efforts, as well as introducing joint indices, in an effort to create a closer cooperation between Frankfurt and Istanbul.

“We are currently observing consolidation and interconnectivity trends in the global financial markets,” Jochen Biedermann, Head of International Affairs at Deutsche Borse, told Markets Media. “Cross-border relationships such as this one are of ever increasing importance in order to keep pace with competitors. Such cross-border relationships are the basis for innovation and one of the main drivers for building bridges between the national capital markets, facilitating the international flow of investments.”

Germany and Turkey have been closely related in economic and social terms in recent history, according to Deutsche Borse. The companies will look to develop joint marketing activities in order to raise the awareness of the Turkish capital market among German institutional and retail investors and vice versa. They will also consider the option of joint product development initiatives. Frankfurt Main Finance and other key players have indicated their interest to establish a strategic partnership with Istanbul as a financial center.

The Istanbul Stock Exchange is the only securities exchange in Turkey, providing the trading of equities, bonds and bills.

Deutsche Borse is currently awaiting regulatory approval for its merger with NYSE Euronext. The parties most recently submitted concessions addressing the concerns of regulators. A decision on the deal is expected by Jan. 23.

The alliance between Deutsche Borse and the Istanbul Stock Exchange is the latest partnership reached between cross-border trading venues for the purposes of sharing technology.

In September, Bolsa Electronica de Chile’s South American neighbor BM&F Bovespa came to an agreement with Nasdaq to use its Smarts Integrity market surveillance platform to provide added market monitoring capabilities. Aside from BM&F Bovespa, which is the largest stock exchange in Latin America, Bovespa Market Supervision, its Brazilian self-regulatory organization, will also share in using the trade monitoring technology.

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