Chief Executive Officer
Deutsche Börse
Chief Executive Officer
NYSE Euronext
[PNR]
Technology upended the old order of exchange trading, and it will have much to do with two historical mainstays’ ability to reinvigorate themselves and reshape their world yet again. The February 15 merger agreement between Deutsche Börse and NYSE Euronext was itself something of a market shock; their projected $5.4 billion-in-revenue enterprise culminated years of industry consolidation and far overshadowed the previously announced, unconsummated tie-up of London Stock Exchange Group and Toronto’s TMX Group. As NYSE chief executive Duncan Niederauer, CEO-designate of the combined company, said later, this “premier global exchange group” would be “not just about a place where you list your stock.” He and his Deutsche Börse counterpart and future chairman, Reto Francioni, stressed their complementary strengths and synergies, adding up to what Francioni called “one of the deepest pools of liquidity for European and U.S. equities and the most iconic venue for capital-raising in the world.” Not least among the anticipated benefits: some $400 million in annual cost savings, largely from information technology, clearing and market operations. The Francioni-Niederauer tandem will be crucial to achieving such objectives — both personify three decades of rapid, technology-driven transformation.
Deutsche Börse CEO since 2005, the 55-year-old Francioni started his career with Credit Suisse and UBS before getting on the exchange track as deputy CEO of Zurich’s Association Tripartite Bourses from 1988 to 1992. After a stint in corporate finance at drugmaker Hoffmann–La Roche, he held several top positions with Deutsche Börse from 1993 to 2000, managing, among other businesses, the flagship Frankfurt Stock Exchange, noted for its Xetra electronic trading platform, and Deutsche Terminbörse, the options e-trading pioneer and predecessor of Börse’s Eurex derivatives subsidiary. In 2000, Francioni became co-CEO of German brokerage Consors, now part of Cortal Consors (see Olivier Le Grand, No. 13). He returned to his native Zurich from 2002 to 2005 as chairman of exchange operator SWX Group, now SIX Group.
Niederauer, 51, rose to CEO of the New York Stock Exchange’s parent in December 2007, eight months after then-CEO John Thain brought him in as president and co-COO. During his previous 22 years with Goldman Sachs Group, where he and Thain were partners, Niederauer had roles including co-head of equities division execution and head of the execution and clearing business formerly known as Spear, Leeds & Kellogg. Niederauer served as a director of the former electronic communications network Archipelago Holdings, whose 2006 acquisition by NYSE resulted in the Big Board’s becoming a publicly traded company.
Niederauer has leaned on technology as a competitive weapon to, he says, beat back “alternative trading venues that operate with less transparency and far fewer regulatory requirements,” and to boost revenue through sales of data and services such as the Secure Financial Transaction Infrastructure, a globe-spanning utility for exchanges and market participants. That’s akin to how Deutsche Börse’s IT division handles trading for 27 venues around the world. The emphasis is well placed: Although total NYSE revenue slipped 7 percent last year, its technology services business grew 43 percent, to $318 million. Compared with Börse’s total 2010 sales increase of 2 percent, market data and analytics rose 19 percent, to €225 million ($319 million).
