The recent spate of M&A activity among the world’s major financial exchanges — including such players as NYSE, Euronext, CBOT and numerous others — signals that the securities and investments industry is at a flashpoint for globalization on a massive scale.
That is the core finding discussed by TowerGroup managing director of Securities & Investments, Rob Hegarty, in a presentation titled “After the Starting Gun: The Race for Global Domination in the Capital Markets is On” to be given today at the 2007 TowerGroup Financial Services Business & Technology Conference and Exhibition in Boston.
“Massive change in the capital markets begins with seismic shifts at its core, namely among the exchanges,” Hegarty says. “With the onslaught of merger and acquisition activity in the exchange space in the last 12 months comes a renewed ability to invest and trade globally. Once the core of the capital markets goes global, the rest of the participants will follow in earnest.”
As the exchanges further link the world’s major financial centers, the sell-side firms (brokerages) will intensify their globalization. Brokerage clients — namely investment managers on the buy-side — will soon follow.
“This will cause a domino effect, with the ease and convenience of a global market ultimately reaching the retail investor,” Hegarty says. “With the exchanges already out of the gate in a worldwide race for survival, true globalization is just around the corner.”