Summit Notebook

Exclusive outtakes from industry leaders

Being public ain’t all it’s cracked up to be

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IPOs can be very tempting for exchanges, allowing members big payouts and giving the exchanges more financial flexibility to take on new markets.

In the last few years, the majority of the biggest players in the space, from New York Stock Exchange operator NYSE Euronext, and Nasdaq OMX, to Chicago Merc operator CME Group and InterContinentalExchange have gone public.

Several of the few non-public trading venues left, including options exchange CBOE, and electronic venues Liquidnet and Direct Edge, still have IPO plans.

But being public comes at a price — stressed-out employees with options and investors watching plunging stocks. According to the Dow Jones Global Exchanges Index, exchanges’ shares have fallen by nearly half since last May.

NYSE if Grasso were in charge? Bankrupt, says Liquidnet CEO

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The emergence of off exchange stock trading in the United States in the past 10 years has eaten away at the market share of the New York Stock Exchange and Nasdaq by breaking their duopoly.

But those two U.S.-based exchanges have had strong management to help them weather the storm, Liquidnet CEO Seth Merrin said at the Reuters Global Exchanges and Trading Summit.

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