There could be more intrigue behind Nasdaq's three-way transaction with the Borse Dubai to control OMX and dispose of its stake in the London Stock Exchange. One leading UK newspaper reported that Nasdaq has plotted an alliance with Dubai to ultimately bring the LSE into a global exchange network.On Sunday, the The Guardian reported that, Nasdaq and Borse Dubai have hatched secret plans to bring the London Stock Exchange into a pan-continental alliance that could challenge the merger between the NYSE and Euronext. The plan involves the creation of a new company in which London would have the dominant position that would link trading platforms in the Gulf States, Sweden and the U.S., reported The Guardian on Sunday. OMX operates exchanges in Sweden, Denmark, Finland, Iceland and Baltic countries.
In a swap of shares and cash, Nasdaq has sold its 28 percent stake in the LSE to the Middle Eastern partner, and gaining control over OMX, while ending up with nearly 20 percent of Nasdaq. But there is also the prospect that rival Qatar, through the Qatar Investment Authority, could launch its own bid to takeover OMX. In flurry of activity last week, Qatar acquired a 9.98 percent stake in OMX. Qatar also amassed a 20 percent stake in the LSE - which means up to 48 percent of the LSE stock is owned by the oil-rich Persian Gulf financial entities.
Meanwhile, Nasdaq's deal with Borse Dubai stirred up national security concerns in Congress over Borse Dubai, a holding company for two exchanges, owning a significant piece of a U.S. stock exchange.
Last week, The New York Times reported that there was "mild reaction in Congress to the Dubai stake in Nasdaq, but Sen. Charles Schumer, Democrat from New York, is raising concerns about Borse Dubai playing a major role in New York finance and said the U.S. should examine anti-money laundering policies and other issues when a foreign government is purchasing U.S. infrastructure.
In a statement released last week, Nasdaq said parties in this transaction would voluntarily submit the transaction for consideration by the Committee on Foreign Investment in the U.S. This process was set up in 2006 under the Treasury department after the Bush administration caused a fiasco in outsourcing the management of the Ports of New York and New Jersey to Dubai Ports World, a Dubai Company, owned and operated by the United Arab Emirates.There is more intrigue behind Nasdaq's three-way transaction with the Borse Dubai to control OMX and dispose of its stake in the London Stock Exchange. One leading UK newspaper reported that Nasdaq has plotted an alliance with Dubai to ultimately bring the LSE into a global exchange network. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio