London Stock Exchange Group

London Stock Exchange Group (LSEG) is a an international markets infrastructure business

Summary

London Stock Exchange Group (LSEG) is a an international markets infrastructure business. Its major activities are related with Stock Exchanges and Financial Information technologies. The LSEG owns and manages the London Stock Exchange.

Based in London, United Kingdom, the group is also the proprietary of Italy’s only stock exchange Borsa Italiana, UK FTSE 100 Index operator FTSE International, LSEG Technology, Russell Indexes, and holds majority stakes in LCH and MTS.

The current London Stock Exchange Group was officially formed in 2007 when London Stock Exchange merged with Milan Stock Exchange, Borsa Italiana, though it has roots all the way back to 1801.

The Group is listed on London Stock Exchange and it’s ticker symbol is LSE.L

History

The London Stock Exchange Group was formally created in 2007 when the Exchange acquired the Milan-based -and Italian only- Borsa Italiana for 1.6bn euro (£1.1bn; $2bn) to form the London Stock Exchange Group plc. The combination was intended to diversify the LSE’s product offering and customer base. The all-share deal diluted the stakes of existing LSE shareholders, with Borsa Italiana shareholders receiving new shares representing 28 per cent of the enlarged register.

In 2008, the group announced a strategic partnership with Oslo Børs (Oslo Stock Exchange) which included the provision of trading services to its equities, fixed income and derivatives markets.

In March 2009, The Board of London Stock Exchange Group appointed Xavier Rolet as Chief Executive. Later that year, on 16 September 2009, the London Stock Exchange Group agreed to acquire Millennium Information Technologies, Ltd., a Sri Lankan-based software company specialising in trading systems, for US$30m (£18m). The acquisition was completed on 19 October 2009.

In November 2010, London Stock Exchange Group launched its charitable Foundation, which focuses on supporting selected initiatives in the communities in which it operates.

On 9 February 2011 TMX Group, operator of the Toronto Stock Exchange agreed to join forces with the London Stock Exchange Group in a deal described by TMX head Tom Kloet as a ‘merger of equals’ (though 8/15 board members of the combined entity will be appointed by LSE, 7/15 by TMX). The deal, subject to government approval would create the world’s largest exchange operator for mining stocks. In the UK the LSE Group first announced it as a takeover, however in Canada the deal was reported as a merger. The provisional name for the combined group would be LTMX Group plc. On 13 June 2011, a rival, and hostile bid from the Maple Group of Canadian interests, was unveiled for the TMX Group. This was a cash and stock bid of $3.7 billion CAD, launched in the hope of blocking the LSE Group’s takeover of TMX. The group was composed of the leading banks and financial institutions of Canada. The London Stock Exchange however announced it was terminating the merger with TMX on 29 June 2011 citing that “LSEG and TMX Group believe that the merger is highly unlikely to achieve the required two-thirds majority approval at the TMX Group shareholder meeting”.

Also in 2011, the Group signed a strategic partnership with the Mongolian Stock Exchange and London Stock Exchange Group plc acquired outstanding 50 per cent of FTSE International Limited, giving LSEG 100 per cent ownership and strategic control.

A year later, in July 2012, the LSE bought a 5% stake in Delhi Stock Exchange and agreed to acquire majority stake in LCH.Clearnet Group Limited.

On 2 June 2014, the LSE became the 10th stock exchange to join the United Nations’ Sustainable Stock Exchanges (SSE) initiative.

On 26 June 2014, the LSE announced it had agreed to buy Frank Russell Co., making it one of the largest providers of index services.

In January 2015, Reuters reported that the London Stock Exchange Group planned to put Russell Investments up for sale, and estimates the sale will produce $1.4 billion per unit.

In March 2016, the company announced it had reached an agreement with Deutsche Börse to merge. The companies will be brought under a new holding company, UK TopCo, and will retain both headquarters in London and Frankfurt. On 25 February 2017, the London Stock Exchange Group PLC stated it wouldn’t sell its fixed-income trading platform in Italy to Deutsche Börse AG, to appease anti-trust concerns. The planned merger between the two exchanges, which was estimated to create the largest exchange in Europe, was subsequently described as “at risk” by the Wall Street Journal. The merger attempt was blocked by EU Competition Regulator on 29 March 2017 stating that “The Commission’s investigation concluded the merger would have created a de facto monopoly in the markets for clearing fixed income instruments”.

In August 2019, the company agreed to buy Refinitiv in an all-share transaction valuing the target at $27 billion. But shortly thereafter, on 11 September 2019, the LSE itself became the target of a £32 billion bid by the Hong Kong Exchanges and Clearing.

Activities

London Stock Exchange Group (LSEG) is an international markets infrastructure business. Its diversified global business focuses on capital formation, intellectual property and risk and balance sheet management. LSEG operates an open access model, offering choice and partnership to customers across all of its businesses.

Headquartered in the United Kingdom, with significant operations in North America, Italy, France and Sri Lanka, the Group employs approximately 4,500 people.

The Group operates a broad range of international equity, ETF, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS (a European fixed income market); and Turquoise (a pan-European equities MTF). Through its platforms, LSEG offers market participants, unrivalled access to Europe’s capital markets. The Group also plays a vital economic and social role, enabling companies, including SMEs, to access funds for growth and development.

Through FTSE Russell, the Group is a global financial indexing, benchmarking and analytic services with approximately $15 trillion benchmarked to its indexes. The Group also provides customers with an extensive range of data services, research and analytics through The Yield Book, Mergent, SEDOL, UnaVista, XTF and RNS.

Post trade and risk management services are a significant part of the Group’s business operations. In addition to majority ownership of LCH, a multi-asset global CCP operator, LSEG owns CC&G, the Italian clearing house and Monte Titoli, a leading European custody and settlement business.

LSEG Technology develops and operates high performance technology solutions, including trading, market surveillance and post trade systems for over 40 organisations and exchanges, including the Group’s own markets.

Capital Markets

LSEG’s central economic function is to bring together companies and other issuers seeking capital with investors from around the world in the following areas:

Primary Market, providing companies and other issuers of equity and debt from around the globe;

Secondary Market, providing fast and efficient trading, providing investors and institutions access to UK and Italian equities;

Equities, their primary markets are home to a wide range of companies, from global and well known, to small and medium size enterprises. And their systems allow their members to electronically trade equities listed on those markets;

Fixed Income, the Group’s MTS, MOT, ORB and EuroTLX markets provide platforms for the trading of European and US Government and corporate bonds;

Derivatives, they have developed derivative markets for the trading of emerging market equity derivatives, particularly Russian derivatives.

Technology Services

All of their businesses depend on technology that is secure, stable and performs to high levels of availability and throughput. With continued demand for new functionality and highly automated trading, the Group have invested to increase the capabilities of their trading services. With MillenniumIT, they have an agile, efficient, in-house IT development capability to serve the Group’s various businesses. MillenniumIT also sells and licenses the same exchange related technology and services to over 30 capital markets businesses across the globe.

Post Trade Services

The Group offers a full range of Post Trade services, providing risk management and efficiency for traders. Based in Italy, CC&G provides clearing services to a number of Group and other trading venues. Following completion of the acquisition of a majority stake in LCH in May 2013, the Group now has majority ownership of clearing services in the UK, continental Europe and the US. This business will be reported as a separate segment in future.

Information Services

The Group also provides information services based on real time data through a supply of real time prices and trading data to create the transparency and liquidity that are essential for market users. This data is of high value and is used and referenced by market participants and trading services. As well as providing feeds directly to clients, we also distribute through providers such as Bloomberg and Thomson Reuters. Likewise, through FTSE Russell is a global index, the group provides innovative benchmarking, analytics and data solutions for investors worldwide.

Executive Board

David Schwimmer – CEO

David Schwimmer is CEO of London Stock Exchange Group and a member of the Board of LSEG plc. Prior to joining the Group in August 2018, he spent twenty years at Goldman Sachs where he held a number of senior roles, most recently as Global Head of Market Structure and Global Head of Metals & Mining. During his tenure, he also served as Chief of Staff to Lloyd Blankfein, who was then President and COO of Goldman Sachs, and also spent three years in Russia as Co-Head of Russia/CIS. Prior to joining Goldman Sachs, he practiced law at Davis Polk & Wardwell. He holds a B.A. from Yale University, and post graduate degrees in law (JD) and international affairs (MALD) from Harvard University and The Fletcher School of Law and Diplomacy, respectively.

David Warren – Group Chief Financial Officer

David was appointed Chief Financial Officer and joined the Board as a Director on 2 July 2012. He also served as Interim CEO and Group CFO from 29 November 2017 to 31 July 2018. Previously, David spent 9 years as CFO at Nasdaq OMX, where he was responsible for all financial operations. This was followed by two further years as a Senior Adviser to the CEO. Before joining Nasdaq OMX, David, had already held a number of senior finance roles, including 7 years at Credit Suisse First Boston.

Raffaele Jerusalmi – Chief Executive Officer, Borsa Italiana and Group Director of Capital Markets, LSEG

Appointed to the Board in June 2010. In addition to his role as Director of Capital Markets, Raffaele was appointed Chief Executive Officer of Borsa Italiana S.p.A. in April 2010. He is also Institore of the LSEGH (Italy) group of companies. Prior to joining Borsa Italiana in 1998, he was head of trading for Italian fixed income at Credit Suisse First Boston from 1993 to 1998. From 1996 he was member of the proprietary trading group in London. From 1997 to 1998 he was a Board Member of MTS S.p.A., representing Credit Suisse First Boston and from 1989 to 1993 was head of trading for the fixed income and derivatives divisions at Cimo S.p.A. in Milan.

Chris Corrado – Group COO, Group CIO

Chris Corrado was appointed Group COO and Group CIO in November 2015. Chris was previously Managing Director at MSCI, CIO/CTO, responsible for technology, data services and program management from 2013. Chris has more than thirty years of global experience in managing technology platforms and transformational change in the financial services industry. Prior to joining MSCI, Chris held a variety of senior CTO roles in leading banks, including Morgan Stanley, Deutsche Bank, Merrill Lynch and UBS. He has also worked for high growth technology companies as CTO at eBay, CIO at AT&T Wireless, and SVP of Technology, Strategic Initiatives and Business Architecture at Asurion, the mobile technology protection company. He began his career at IBM. He graduated with a B.S. in Management Information Systems & Business Administration from the University of New York at Albany.

References

https://www.lseg.com/about-london-stock-exchange-group

https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB00B0SWJX34GBGBXSET1.html

https://www.bloomberg.com/quote/LSE:LN

https://en.wikipedia.org/wiki/London_Stock_Exchange_Group

https://www.ftserussell.com/about-us

https://www.reuters.com/article/us-borsa-lse/lse-seals-2-2-billion-borsa-italiana-deal-idUSL2368118820070623

https://www.ft.com/content/916b899e-fd07-11e3-8ca9-00144feab7de

https://www.theguardian.com/business/2019/aug/01/london-stock-exchange-agrees-22bn-deal-to-buy-refinitiv

https://www.bbc.co.uk/news/business-12400785

https://www.bloomberg.com/news/articles/2019-07-27/deutsche-boerse-sees-refintiv-talks-failing-after-lse-deal