February 10, 2011
The Big Board is on the Block: Frankfurt Stock Exchange Plus NYSE
Posted by Christine Hurt

The New York Stock Exchange is in advanced merger talks with Frankfurt Stock Exchange to be purchased by the FSE.  Wow!  That just feels un-American to just type that sentence.  But, apparently we're experiencing a consolidation of the industry -- London Stock Exchange and Toronto Stock Exchange have already sealed a merger deal.  Remember when the NYSE was a not-for-profit, then we all got mad because Dick Grasso made so much money as the CEO?  Well, now it's for-profit, and it's going to be owned by Europeans.  There you go.

One interesting aspect of the merger may be the future of U.S. corporate governance.  We tend to think of corporate governance as a state law issue, and more and more recently a securities law issue, but the NYSE's listing standards are the source of many corporate governance rules that don't appear anywhere in the state statutes.  These listing standards are even sometimes a step ahead of the SEC as well, which then catches up to them with their own rulemaking.  (e.g., NYSE's one-share-one-vote rule, which led to 19c-4 debacle; NYSE's requirement of independent directors on compensation committees, adopted under Dodd-Frank).  From what I read from the comparative corporate law scholars, corporate governance rules and norms are a little different in Germany than in the U.S.  Will these governance rules make their way into the NYSE listing standards?

Corporate Governance, M&A | Bookmark

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