--Sign Letter of Intent for Mutual Cooperation and Development--
NYSE Group and Tokyo Stock Exchange Enter Strategic Alliance
New York and Tokyo, Jan. 31, 2007 – NYSE Group, Inc. (NYSE: NYX) Chief Executive Officer John A. Thain and Tokyo Stock Exchange, Inc. (TSE) President and Chief Executive Officer Taizo Nishimuro today signed a letter of intent that establishes a strategic alliance between the two world financial market leaders to jointly develop and explore new opportunities in trading systems and technology, investor and issuer services, investment products, and governance and regulation. The agreement, which is non-exclusive, also sets the stage for a potential capital alliance between NYSE Group and the TSE.
“We welcome this opportunity to work more closely on areas of mutual interest with Mr. Nishimuro and his colleagues at the Tokyo Stock Exchange, the world’s second largest equity market,” Mr. Thain said. “We are committed to the success of this strategic alliance, which will benefit and create growth opportunities for both markets and our respective customers, advance our global vision, and further strengthen the ties between Japan and the United States .”
“Tokyo Stock Exchange is pleased that both exchanges are proceeding to the next level of cooperation. I strongly believe that this agreement will be a good starting point for a much stronger tie-up with the NYSE and will contribute to the benefit of various market participants of our respective markets,” said Mr. Nishimuro.
Specific Areas of Cooperation
Under the terms of the agreement, NYSE Group and the TSE will establish formal working groups that will meet regularly to engage in ongoing dialogue and development activities on specific areas of mutual interest, which will include: Information and market infrastructure systems and technology, trading services, market data products, issuer and investor services, cross-marketing and promotional activities, and listed company regulation and governance. They will examine cooperation in the listing process to enable issuers who are listed on only one Exchange to have improved access to investors in the other.
NYSE Group and the TSE will explore global strategic trends affecting each organization’s respective business and will exchange personnel if necessary. The chief executive officers of each organization will confer at least quarterly to review progress on developmental initiatives and on implementation of the agreement.
- The New York Stock Exchange has 19 listed companies from Japan ; for a complete list go to: www.nyse.com/about/listed/7.html?country=Japan;
- New York Stock Exchange listed securities benefit from the world’s lowest overall cost of trading according to the second-quarter 2006 Global Trading Cost Analysis report by Elkins/McSherry, a State Street Company providing independent transaction cost analysis. Tokyo Stock Exchange ranks second in overall trading cost efficiency. For more on Elkins/McSherry, go to: www.nyse.com/Frameset.html?nyseref=&displayPage=/press/1165837254065.html;
- On June 4, 2002 , TSE and NYSE signed a memorandum of understanding (MOU) to share market surveillance information in their respective markets;
- On Feb. 7, 2000 , the S&P Global 100 Index launched as the first equity stock index covering global companies. This index is a collaboration of the NYSE, Standard & Poor’s, TSE, and the Deutsche Borse.
About NYSE Group, Inc
NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange LLC (the “NYSE”) and NYSE Arca, Inc. (formerly known as the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. In 2006, on an average trading day, 2.3 billion shares, valued at $86.8 billion, were traded on the exchanges of the NYSE Group.
The NYSE is the world’s largest and most liquid cash equities exchange. The NYSE provides a reliable, orderly, liquid and efficient marketplace where investors buy and sell listed companies’ common stock and other securities. On December 31, 2006 , the operating companies listed on the NYSE represented a total global market capitalization of $26.5 trillion. NYSE Arca, Inc. operates the former ArcaEx®, the first open, all-electronic stock exchange in the United States , which has a leading position in trading exchange-traded funds and exchange-listed securities. NYSE Arca, Inc. is also an exchange for trading equity options. NYSE Arca, Inc.’s trading platforms provide customers with fast electronic execution and open, direct and anonymous market access. NYSE Regulation, an independent not-for-profit subsidiary, regulates member organizations through the enforcement of marketplace rules and federal securities laws. NYSE Regulation also ensures that companies listed on the NYSE and NYSE Arca meet their financial and corporate governance listing standards. For more information on NYSE Group, go to: www.nyse.com.
About the Tokyo Stock Exchange
Tokyo Stock Exchange, Inc. is the premier exchange for Japanese cash equities and derivative products from the perspective of investors both in Japan and abroad. In 2006, stock trading volume on TSE reached 502 billion shares. This has positioned TSE as the central market of Japan . Also in 2006, TSE recorded an average daily trading volume of 2,026.0 million shares, and daily average trading value of JPY 2,716.7 billion. At the end of December 2006, the number of listed companies was 2.416, with a market capitalization reaching JPY 549.7 trillion. In addition to its core Japanese equity market, TSE provides markets for derivatives products such as long-term Japanese government bond futures and TOPIX index futures. Japanese Government Bond (JGB) futures trading, , the cornerstone of TSE’s fixed income derivatives market and the benchmark of the Japanese bond market, continues to thrive on investor demand from across the globe. The JGB futures contract is one of the most active long-term interest rate futures contracts in the world, with its annual trading volume in 2006 reaching 12,049 thousand contracts. The TOPIX futures contract, which is actively traded by institutional investors, is the leading stock index futures product in Japan , with the largest open interest among Japanese stock index futures products.
The trading volume in 2006 rose to 15,907 thousand contracts in 2006, an increase of about 16.5% over 2005. With respect to these cash and derivative products, the TSE, as a self regulatory organization, continuously makes every effort to provide a fair, transparent, and efficient market. For more information on Tokyo Stock Exchange, go to: www.tse.or.jp/english/index.shtml
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on NYSE Group’s current expectations and involve risks and uncertainties that could cause NYSE Group’s actual results to differ materially from those set forth in the statements. There can be no assurance that such expectations will prove to be correct. Actual results may differ materially from those expressed or implied in the forward-looking statements. Factors that could cause NYSE Group’s results to differ materially from current expectations include, but are not limited to: NYSE Group’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Group’s Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Group that the projections will prove to be correct. NYSE Group undertakes no obligation to release any revisions to any forward-looking statements.
Contact: Mitsuo MIWA/Tokyo Stock Exchange