NYSE’s New Boss Says 221-Year-Old Market Must Act Like Startup

November 13, 2013 Leave a comment

NYSE’s New Boss Says 221-Year-Old Market Must Act Like Startup

IntercontinentalExchange Inc. (ICE) completed its purchase of NYSE Euronext at the close of today’s trading session, and its chief executive officer said the deal will usher in a swift shift to a more aggressive culture at the 221-year-old owner of the New York Stock Exchange. Jeffrey Sprecher, the CEO of Atlanta-based ICE, wants the combined entity to act more like a startup than a venerable institution with roots in the 18th century. His new employees should take more risks, adopting an approach that made ICE one of the world’s biggest exchange operators just 13 years after its founding, he said.“I hope I can convince the NYSE employees to embrace that style of business and accept a certain amount of failure,” Sprecher said in a phone interview today. “Any more-mature company has a hard time with that, but I really think that in today’s era companies need to move quickly.”

Sprecher is buying NYSE Euronext at a time when profits from the company’s traditional business, U.S. equities, have diminished because of regulatory and technological changes during the past decade and a half.

With the acquisition, he gains a financial futures division, NYSE Liffe, that gives him interest-rate futures for the first time. He tried and failed in 2007 to buy the Chicago Board of Trade to get access to the contracts, which allow investors to bet on or hedge moves in rates. The products are the largest contracts by volume at ICE competitor CME Group Inc.

Job Cuts

The 58-year-old executive said the integration of the two firms will be swift. ICE, with about 1,100 workers, is taking on a company with more than 3,000 employees. He said workforce changes will be announced tomorrow.

“ICE needs to move relatively quickly and be relatively definitive with the combination employee pool so that we can get the integration behind us,” Sprecher said. “I don’t want our company to be distracted by internal issues at this moment in time when there’s so much change being put on top of our customers,” he said. “It’s important that we’re relatively quick and decisive on getting the companies integrated.”

ICE’s takeover has already led to changes at the top of NYSE Euronext (NYX)’s management ranks. Chief Financial Officer Michael Geltzeiler plans to join ADT Corp., while the departure of NYSE Liffe’s co-CEO, Mark Ibbotson, was revealed in August.

On Oct. 31, Bloomberg News reported that two Liffe executives would leave. Fraser Cowie, executive director for strategic alliances, and Ian Dudden, head of commodity derivatives, planned to depart following the acquisition, according to three people familiar with the situation.

ICE has already announced plans to spin off NYSE Euronext’s European equities division through an initial public offering.

To contact the reporters on this story: Matthew Leising in New York at mleising@bloomberg.net; Sam Mamudi in New York at smamudi@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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