By Cory Levine, Wall Street & Technology
Leaders of the Securities Industry Association (SIA) and The Bond Market Association (TBMA) announced today that the boards of both groups voted in favor of a merger proposed in April. The decision now rests in the hands of the member firms of both associations. Proxies will be sent to the firms tomorrow, with a special member meeting being held on July 27 to tally the votes.
Nearly as exciting as the expected cost savings for the associations and their members is the brand new name of the organization and its corresponding acronym. The group resulting from the merger will be named the Securities Industry and Financial Markets Association, or for the hip, SIFMA. This name, along with the merger itself, is subject to member vote, and although it's a little clunky, SIFMA is expected to stick.
SIA and TBMA presidents Marc Lackritz and Micah Green, respectively, will act as co-CEOs of the new group through the end of the year. A search is currently underway to fill the CEO role of the new group, with external candidates as well as current leadership being considered.
The organizations plan to begin leveraging the overlap of support functions to realize cost savings immediately after member approval, said James Gorman, chairman of the SIA, on a call with reporters. Though he declined to estimate those savings or identify where they might be found, Gorman did indicate that member fees will remain flat for the first year and any savings thereafter will either be reinvested in the organizations or passed on to firms through the bottom line of membership dues.
One of the intended results of the merger is greater weight to throw around on Capitol Hill on behalf of the financial markets. "Coming together allows us to have a clearer voice on developing common sense regulation," said Green to reporters. "Clearly both organizations have very active and top-notch lobbying teams. ... Bringing them together is obviously going to allow us to create a stronger team."
The proposed merger and subsequent board approval are logical moves, and little resistance is expected from member firms, say industry observers.
"I know that the number of bond dealers over the past 20 years ... has consolidated significantly, and the same is true on the securities side, so it only makes sense to consolidate these groups," says Larry Tabb, CEO of TABB Group.
It looks as though SIFMA is here to stay, so get used it.