Yesterday, Société Générale and Calyon signed an agreement stipulating that their brokerage subsidiaries, Fimat and Calyon Financial respectively, would merge.
The operational launch of the new entity, Newedge, is scheduled for early 2008, subject to the approval of supervisory authorities. Newedge will be controlled on a fifty-fifty basis by Société Générale and Calyon and will have bank status. Marc Litzler, currently deputy CEO, Calyon, is to become chairman, Newedge. Philippe Collas, currently deputy CEO, Société Générale with responsibility for his firm's global investment management and services division, is to become vice-chairman. Each will be appointed for a period of two years. Patrice Blanc, chairman and CEO, Fimat Group, will be appointed CEO, Newedge and Richard Ferina, chairman and CEO, Calyon Financial will become deputy CEO.
Newedge will combine the expertise of the two entities in risk management, cross margining and financing and provide alternative prime brokerage solutions to those offered by investment banks to their institutional customers, says the firm. In addition to its core business as a Futures Commission Merchant (FCM), the new entity will continue to offer a range of complementary execution services on OTC markets and on all the spot markets, including money market instruments, bonds, equities, FX and tangible commodities.