Intercontinental Exchange Holdings Inc may be required to sell a portion of its stake in India's National Commodity Derivatives Exchange (NCDEX), and the bourse has already been approached by many financial institutions, its chief executive said on Wednesday.
The Atlanta-based exchange said it was in talks with the Indian Government about the possibility of holding on to its 8 percent stake in NCDEX, or lowering it to the mandatory 5 percent regulatory cap.
ICE CEO Jeff Sprecher said it has been approached by a host of institutions, including global exchanges, financial services companies and banks for the “extra piece” it holds.
“We have been contacted by many, many people who would like to have that extra piece,” Sprecher told the Reuters Exchanges and Trading Summit on Wednesday.
ICE bought the 8 percent stake in NCDEX last year, aiming to get a share of the booming commodities trading in the country. Investment bank Goldman Sachs holds a 7 percent stake in the commodity exchange.
The Indian government passed legislation last January, putting a cap on individual foreign investments at 5 percent.
Sprecher said many of the exchanges were taking smaller minority stakes in each other in order to keep other competitors away, a strategy he described as “sneezing on a wedding cake.”
“Maybe over time, somehow, they will come together in an organized manner, but it is not clear,” he said.
In February, NYSE Euronext, bought a 5 percent stake in India's largest commodity bourse, the Multi Commodity Exchange for $55 million as part of a strategy to diversify its product portfolio and geographical reach.
The minority stake in NCDEX has resulted in an ongoing dialogue with Indian officials looking to learn about markets trading and price discovery, Sprecher said.
Source: Reuters