ASX Group Offers to Buy Yieldbroker for $65 Million

Leading Asia-Pacific exchange ASX Group said it had offered $65 million for Australian electronic derivatives marketplace Yieldbroker. The offer is for a 49 percent non-controlling shareholding in the company.

Boards of both ASX and Yieldbroker have accepted the proposed deal, with the last hurdle for the acquisition being a go-ahead by Yieldbroker’s shareholders. ASX is also expected to carry out final due diligence, which is scheduled for the next few months. ASX intends to use its cash reserves to finance the purchase, reported The Australian.

Yieldbroker was established in 1999 as Australia’s first electronic market for interest-rate securities. The company diversified into various derivatives after the over-the-counter interest rate markets began shifting to electronic trading. Of late, the company rolled out overnight indexed swaps (OIS), swaps and money-market instruments. More than 100 financial institutions transact through Yieldbroker, trading nearly $130 billion every month.

The firm can also give U.S. investors access to its interest-rate swaps market after it got a no-action relief from U.S. Commodity Futures Trading Commission.

“Yieldbroker is a leader in electronic trading in the Australian over-the-counter (OTC) debt and interest rate derivatives markets, and ASX’s proposed investment would complement our exchange-traded derivatives, OTC clearing and collateral management services,” said Elmer Funke Kupper, ASX Managing Director and CEO.

Other investors in electronic market place include CBA, ANZ, Deutsche Bank, Citi, Toronto Dominion, Westpac, UBS, J.P. Morgan, RBS, Macquarie, RBC, and NAB.

Meanwhile, Singapore’s electronic financial market, the Singapore Exchange approved a request by U.S. investment banking firm, Jefferies Group, to operate as a derivatives clearing business. Jefferies will conduct its business through its Singapore subsidiary, the Jefferies Singapore Ltd. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com