And the is true for negotiating platforms

Former Director of the Nyse, today with Deutsche Börse, Georges Ugeux is on the regulatory implications of a merger Euronext-Nyse and appearance enhancement.

What do you think of the Nyse-Euronext alliance

What bothers me in this case, it is that we went very quickly, by forgetting the crossing of the European dimension. For many working in the United States, I see a myriad of difficulties, as the United States that will be necessary to Euronext or its loss of autonomy in the future. I see a loss of European substance.

How do you explain the eagerness of Euronext

This approximation is a reaction to a previous situation during which discussions with London Stock Exchange, Euronext leaders wanted, have been frustrated. The entrance of the Nasdaq, up to a level of price of 12.50 per action, did more to imagine a replica. Euronext is therefore found with a single interlocutor: Deutsche Börse. Its management has decided to seek alternatives. And best of all, in terms of synergies, it was the Nyse.

Where then is the problem

I find annoying how the vote in the General Assembly of Euronext has been processed. The rejection of the resolution Winchfield, who considered a merger with Deutsche Börse as being in the interest of all shareholders, was seen as the rejection of the offer of Deutsche Börse. Yet the debates in the General Assembly have shown that this is not the case. In reality, shareholders rejected a proposal of exclusive negotiations with Deutsche Börse. In fact, I was expecting that Euronext plays the horses trying to get the best transaction.

And this is not the case

The merger with Nyse less favourable to the shareholders of Euronext. My feeling is that this point has not dominated the conversations. The prospect of a transatlantic operation is exciting. But the Nyse action was blown. It has also strongly corrected. The simple analysis of profits by action on the basis of the first quarter annualized reflects a transfer of value to the Nyse. With this merger, the Nyse could see his advantage pass of 0.75 euro 2.44 EUR. But that of Euronext is forecast to decline of 3.84 euro to 2.44 EUR, while a merger with Deutsche Börse would allow 5.33 euro. Some shareholders have advanced this argument in the Assembly. It was replied that the results of the Nyse are called to grow. But from my point of view, the structure of costs and commission on the Nyse trading him will not catch up to this point the gap.

Should we fear regulatory implications

NYSE-Euronext is an American company, it will have to organize themselves as such. Which means for example that accounting of Euronext in Paris must be in us accounting standards. As a subsidiary, Euronext shall in addition meet the requirements of Sarbanes-Oxley internal control. This has a cost. What will ultimately be the attitude of the Securities & Exchange Commission (SEC) on principles of negotiation and market structures The question also.

John Thain and Jean-François Theodore ensure that regulatory environments will remain separate. But the Financial Services Authority (FSA) British expressed Monday its point of view on the issue.

And the Nymex-ICE episode shows that regulators are not comfortable on the subject read here. Such a transaction poses real questions. It would be a mistake in trying to minimize.

In this context Nyse-Euronext, the agreement between regulators should still provide some assurance...

The agreement will be effectively found. The Presidents of the SEC and the AMF are reasonable people. But the regulatory environment is fluid. The SEC is a government agency subject to the vicissitudes of the administration and Congress.

You were talking about loss of autonomy for the result of this merger Euronext

Do not mistake. It's a redemption. With the distance, decisions concerning the life of all the days of the company will be taken from New York. Believe in my experience, the Americans are centralizing. They do not have a corporate culture that delegates.

There is still the synergies expected, Euronext considers higher than a project with Deutsche Börse.

The evaluation appears to be inflated. Reduction of the number of data, 10 to 4 centers, does not match for the transatlantic operation synergies. And the is true for negotiating platforms. With Deutsche Börse, synergies seem more immediate. On the international side, the fact that the Nyse hold Euronext does not modify the gives. Market makers are in London, which is 50 of its volume of trading on foreign securities against less than 10 for Euronext. This will certainly be a supplement, but I me not expect significant synergies in this pane.

You discuss Deutsche Börse, which you are one of the Councils. Its leaders still have a chance to carry the last

Certainly more than a week ago. Reflection made its way. It's two very different concepts. One of the keys to the shareholders will be upgrading.

Can we expect new concessions

The German offer is already the best. Therefore, I would be surprised that there is a change in the parities. With regard to other concessions, we arrived at the limits of the possible. The employees of Deutsche Börse worry. I am a transatlantic strategy. I'm working. But I would like so much better that European Awards address this stage position of strength, rather than be redeemed by piece. Nobody would have the strength of strike by Euronext - Deutsche Börse together, including in terms of performance.