NYSE Euronext Explores Adding Partners To Amex Joint Venture

NYSE Euronext (NYX) may add more equity partners to its Amex stock-options exchange, expanding a strategy that has boosted trading volume and turned the platform into the Big Board parent's largest U.S. derivatives market.

Seven banks and trading forms agreed to take a near-50% stake in NYSE Amex in 2009 in return for a steady flow of trading business that has almost doubled contract volume on the former American Stock Exchange, which NYSE acquired a year earlier.

NYSE Amex has held conversations with several more firms interested in joining the venture, though there are no formal discussions right now, according to Steve Crutchfield, chief executive of the exchange.

"We would certainly entertain the possibility of adding new partners over time," said Crutchfield in an interview on the sidelines of a Security Traders Association event.

Expanding the consortium ownership group could further lift business on NYSE Amex, which is the fourth-largest U.S. options exchange and has outgrown NYSE Arca, its sister market.

The original equity-sharing deal underscored the king-making power of big firms, which do their own options trading and also handle the orders of individual investors. This month NYSE Amex's market share of all U.S. options trading was 13.3%, compared to 7% when NYSE Euronext bought the exchange, according to data from the clearinghouse OCC.

Crutchfield declined to identify which firms had expressed interest in joining the ownership group. The current stakeholders include Goldman Sachs Group Inc. (GS), Citadel LLC, Bank of America Corp. (BAC), Citigroup Inc. (C), TD Ameritrade Holding Corp. (AMTD), UBS AG (UBS, UBSN.VX) and Barclays PLC (BCS, BARC.LN).

Collectively the partners hold about 47.5% of the exchange, with NYSE Amex owning the remainder. NYSE Euronext or the current equity owners would have to agree to sell down some of their position to accommodate a new stakeholder, according to Crutchfield.

He said that potential entrants must be legitimate options traders -- a stake wouldn't be sold to an asset management firm interested in holding the position as an investment, for instance -- and joining the ownership group would entail requirements to send orders to NYSE Amex.

The exchange has spoken to potential partners as rival markets look to pursue their own such equity-sharing deals with major customers.

The BOX Options Exchange, which accounts for about 3.3% of U.S. options trading, has held talks on a similar deal with a handful of firms, and a new options market planned by Miami International Holdings has also been in the hunt for partners, according to people familiar with the matter. A Miami International official declined comment.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; [e-mail]