Oslo exchange buys Burgundy rival to boost Nordic appeal

Oslo Børs, the Norwegian stock exchange, is buying rival Burgundy to boost its pan-Nordic appeal, stem a sliding market share, and boost profit margins.

Stockholm-based Burgundy is licensed as a multilateral trading facility (MTF), and offers trading in some 1,000 Swedish, Norwegian, Finnish and Danish shares, as well as warrants, ETFs and certificates.

Burgundy has 34 investment firms as members, of which 23 are members of Oslo Børs. Together as a single exchange the new business will be able to offer listing services for a number of types of securities and products, including ETFS, structured notes and warrants, while Oslo Børs sees a particular opportunity to increase the reach of its listing services for bonds and equities.

In order to maintain Burgundy’s strenght in the Stockholm market, a new advisory board will be established, to facilitate day to day operations with an eye to the lower costs that are cited as a key reason for the deal.

Bertil Villard, chairman of the board of Burgundy, said: “Burgundy has been a key player in educating and transforming Nordic banks way of trading in the post-MIFID landscape. Scale and international distribution will be important ingredients in Burgundy’s future development. The board has concluded that the best solution is to make this transaction with Oslo Børs, which has strategic interest in expanding their business in the Nordics and with whom the shareholders already have an existing long-term relationship.”

As part of the changes, Burgundy will drop use of its current Cinnober trading platform in favour of Millenium Exchange, the trading platform used by Oslo Børs as part of its collaboration with the London Stock Exchange. Full migration to the new platform will take place during 2013.

(InvestmentEurope recently reported on the change of chief executive at Cinnober: http://www.investmenteurope.net/investment-europe/news/2214581/cinnober-agrees-tordable-exit-appoints-new-ceo )

Clearing and interoperability will continue to be offered by Burgundy via its existing clearing hosues EMCF, X-Clear and EuroCCP.

 

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