GibEX Stock Exchange.
"In spite of delays in finalising the business plan which has to be submitted for approval by the Financial Services Commission before a licence is granted, the local protagonists of GibEX — the Rock’s own stock exchange — anticipate that it could be up and running early in the summer. Although legislation which would allow the exchange to come into being and then operate was rushed through the House of Assembly at its final sitting last year, top-level and sensitive negotiations with one of the powerful partners in the deal took longer than anticipated, James Levy QC, the senior partner at international law firm Hassans, told me recently. However, in spite of the delays the business plan would be submitted to Financial Services Commissioner Marcus Killick “almost immediately”. Suggestions that the scheme would never get off the drawing-board were groundless, Levy insisted. “There has been a lot of optimistic hype and a time scale which was equally optimistic — and probably unattainable given the other work the FSC has to handle,” an expert working closely with the project told me. “And though Marcus [Killick, the FSC Commissioner] is sympathetic and has indicated that he would like to see the bourse kick off, you cannot expect him or his staff to drop everything else just to give the go-ahead to GibEX.”
Assured of the support of a major European bourse and an injection of capital and know-how from one of the biggest market-makers on both sides of the Atlantic, GibEX, will go ahead. Trading in cash products such as stocks, funds and currencies will come on stream when the exchange opens, while derivatives, futures and options will be traded later.
Amendments to existing legislation which opened the legal doors to licensing the exchange were adopted by the Rock’s House of Assembly when it met a few days before Christmas in its last sitting of 2006. And the Government, which encouraged plans for the proposed exchange from the outset, will take a small shareholding as an investor in the £2.6 million project, says Daniel Feetham, a partner in local law firm Hassans who has spent months negotiating the arrangements and details that will bring GibEx to life.
Its establishment will bring Gibraltar into line with other smaller jurisdictions such as Jersey, Malta and Cyprus all of which operate successful markets.
Athough the Bank Medici has remained involved in the development of the project, more powerful partners have come on board - among them the international heavyweight Van der Moolen NV (VDM) the fourth largest liquidity provider on the New York Stock Exchange. The group has already established a presence on the Rock.
“There is a lot of interest and currently we are looking for strategic partners who could add value in terms of expertise in capital markets and exchanges,’ Feetham explains. “At the most there will be two more of these, and at present we are in serious discussion with one or two leading market names.”
When the GibEX project was launched early in 2006 its backers hoped it would be up and running by March this year, instead it will open for business some months later — a breathing space which has proved fortunate as Feetham and others already in the bourse partnership actively seek a Chief Executive Officer as well as other members for the GibEX board.
“We have several possible candidates, but at this stage all I can say is that the CEO will have instant international recognition” Feetham says. However it seems likely that VDM, which recently has been involved in other stock exchange creation and consolidation activity, will have its own favourite to fill what will be a post crucial to the success of the Gibraltar exchange.
An international trading group active in equities, bonds and related instruments (such as options and futures) VDM, as the group is known, is listed on both Euronext (where it handles about one fifth of all shares traded) and on the NYSE (where it handles almost 11 per cent of the volume of all stocks dealt). It is also listed on the Amsterdam exchange. In Europe VDM are one of the top three derivatives specialists on Euronext, and act as on-exchange market-makers in fixed income instruments as well as being proprietary traders in Euronext equities. The group also offers professional customers an electronic and voice brokerage on a growing number of exchanges through Online Trader, which was launched in 2005.
VDM has also linked with the Chicago Board Options Exchange — the biggest US market for options on stocks and stock indices — and two other New York Stock Exchange specialist firms to establish an exchange to trade equity securities. The Dutch group will have an 18 per cent stake in the new exchange which is expected to rival Wall Street’s New York Stock Exchange when it begins trading in a few months.
“This may also provide common synergies with Gibraltar of mutual benefit,” Feetham says. “The massive input of expertise which the Dutch company can bring to the table, its ability to make markets in shares, and the prestigious position it commands on the international stage will stand the fledgling GibEX in good stead.”
(The proposed CBOE Stock Exchange will feature the same combination of screen and floor-based trading that propelled its parent company to the top of the American stock-options markets. The exchange will seek to trade securities listed on the New York Stock Exchange, NASDAQ Stock Market and American Stock Exchange. Fees of the new exchange will be “highly competitive” compared with other markets because the CBOE doesn’t need to invest in new technology to run the exchange. )"
by Peter Schirmer
The above article is quoted from the Gibraltar Magazine by Investors Europe's Research Department http://www.thegibraltarmagazine.com/gibex.htm
