Financial Globalization: PSE-NYSE Euronext ‘MOU Of Cooperation’ A Step Towards Future Integration?

In our January’s Unifying Global Stock Markets; Asia Looks Next!, we deduced (speculated) that Asia could the be next phase in the ongoing integration and consolidation of global capital markets.

Courtesy of Philippine Stock Exchange

Just recently the PSE and the NYSE Euronext signed a memorandum of understanding (MOU) for cooperation, to quote the PSE-

``To explore new opportunities in trading system architecture and technology, exchange traded products, market participant connectivity and market data management…

In addition, notes the PSE, ``The MOU also includes details on the PSE’s acquisition of a new trading system from NYSE Euronext and its affiliates, which was announced in April 2008. Under the terms of the NYX-PSE MOU signed today, areas of possible cooperation involve the sharing of information and experience on new stock markets products and services. The MOU also embodies the common goal of both companies to provide investors worldwide protection and operating fair, orderly and efficient markets. The MOU was drafted in the spirit that international cooperation between the two exchange companies will facilitate the development and efficient operation of all securities markets operated by the exchange groups.

So at a start what we could expect perhaps to see is the introduction of Exchange Traded Funds and (hopefully) expanded cross listings from listed companies at NYSE Euronext bourses.

Of course, the signing came with a photo-op as Philippine Stock Exchange officials rang the opening bell in one of the recent sessions in Wall Street. You can see the roster of officials at the PSE website.

Bottom line: once the infrastructure have been meshed (trading architecture), what’s to stop NYSE from reinforcing further “cooperation” by acquiring substantial stake at the PSE or a prospective merger and or acquisition.