NYSE Euronext and Deutsche Börse stepped up their proposal to divest assets in their derivatives businesses, in their effort to win clearance from European regulators for their merger.

The two exchange operators described the revised remedies submitted to the European Commission’s Directorate-General for Competition this way:

In summary, the parties have strengthened their original proposal with respect to European single equity derivatives by increasing the assets to be included in the divesture, and to provide the purchaser of that business with an option to access Eurex Clearing for single equity derivatives products.

The parties have also improved the coverage of their clearing access remedy for innovative equity index and interest rate derivatives. In addition, the parties committed to license the Eurex trading system to a third party interested in launching interest rate derivatives.

They also agreed to an extension of the timetable for review of the merger.

The European Commission now will review the two companies’ plans and proposals through February 9, 2012.

One month ago, NYSE Euronext and Deutsche Boerse said they would shed overlapping European derivatives businesses and open up clearing services to derivatives rivals, in the effort to win European regulators’ approval of their $10.1 billion merger.

The merger partners said they proposed to eliminate any overlap in their businesses that execute trades in options, futures or other derivatives based on individual European stocks and to operate the Eurex clearing business in a fashion that “ensures continued competition in European interest rate and equity index derivatives.”

Deutsche Boerse operates the Eurex derivatives market. NYSE’s is called Liffe. Last year, the CME Group operated the largest such marketplace, beating out Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe, originally known as the London International Financial Futures and Options Exchange.

By a Eurex count, CME Group handled nearly 3.1 billion contracts in 2010. Eurex, owned by Deutsche Boerse, was second at 2.6 billion and NYSE Euronext third, at 2.1 billion.

Tom Steinert-Threlkeld writes for Securities Technology Monitor.



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