Europe’s MiFID II rules will create new opportunities for listed derivatives business in the region by increasing competition, Nasdaq CEO Bob Greifeld has said as he discussed strong fourth quarter earnings for the market operator.
Greifeld praised the region’s regulators for championing competition in MiFID II and said he expected the outcome to resemble that of US equity markets in the wake of Regulation National Market System (Reg NMS), which laid the foundations for increased venue competition in US stocks.
“We’re very encouraged by the development in European regulation, in particular MiFID II, which is designed to create more competition in listed derivatives trading – something that will be as pervasive a change as Reg NMS was in the US equity markets,” Greifeld said on a call to discuss Nasdaq’s Q4 results.
He added the firm expected to expand market share of its European listed derivatives platform NLX, which launched last year. NLX competes with the region’s dominant derivatives trading venues NYSE Liffe and Deutsche Börse’s Eurex and has gained an overall market share of 2.4%, including maintaining a 5% market share in Euribor futures.
Greifeld said NLX would continue to expand its user base, which currently sits at 27 participants.
“With NLX as well as our Nordic derivatives platform and clearing houses we believe we are very well positioned for an increasing competitive European derivatives landscape in the years to come,” he said.
For Q4 2013, Nasdaq’s revenue reached US$520 million, a 23% rise on Q4 2012, contributing to overall growth of 5% for 2013.
Greifeld highlighted two recent acquisitions – the fixed income trading platform eSpeed and the investor relations, public relations and multimedia arm of Thomson Reuters, as key contributors to the Q4 earnings.
Derivatives represented 14% of net earnings for the quarter, with total derivative clearing and trading revenues reaching US$72 million, down US$3 million from the same period in 2012.
Revenue from cash equity trading grew US$4 million to US$51 million for Q4 2013, or 10% of overall revenue, driven by growth in Europe.