Nasdaq buys 25% stake in Dutch derivatives trading system

Nasdaq is planning a U.K. derivatives platform

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Nasdaq OMX Group Inc. bought a 25 percent stake in The Order Machine, a Dutch trading system focused on stocks and equity derivatives, as the second-largest U.S. equity market expands in the region and diversifies its business.

Nasdaq, which is setting up a new derivatives trading market in London, has an option to buy an additional 25.1 percent for a majority stake in the system, known as TOM, Nasdaq Chief Executive Officer Robert Greifeld said in a telephone interview today. The price isn’t “material” he said, declining to elaborate further on the details of the transaction. The exchange will operate TOM’s market and has an eight-year contract to provide trading technology.

“We’ve seen tremendous competition in equity trading on both sides of the Atlantic, so customers have been well served,” Greifeld said. “Our efforts over the next couple of years will focus on the areas of derivatives trading and clearing where we see opportunities.”

The purchase builds on Nasdaq’s plans for a U.K. derivatives platform, known as NLX. NLX is seeking to grab more than 10 percent of transactions in the U.K. during its first year of operation. Amsterdam-based TOM said it has about a 15 percent market share in single stock options in the Netherlands, where it said 75 million contracts changed hands last year. NLX will remain independently run of TOM.

“Nasdaq has been a technology provider to TOM since it started,” Hans-Ole Jochumsen, Nasdaq executive vice president, Global Data Products and Transaction Services Nordics, said in an interview. “As the only derivatives multilateral trading facility in Europe with a retail focus, TOM has secured significant market share in single stock options.”

Nasdaq joins other TOM shareholders BinckBank NV, Optiver, IMC Group and ABN Amro Clearing Bank.

The purchase is likely to be completed in about three months, at which point Nasdaq will get a seat on the supervisory board and TOM will hire one person from Nasdaq to its management board.

Bloomberg News

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