|Key People||CEO Nicolas Breteau|
|Products||Multi-asset execution and clearing, prime brokerage and asset finance|
Newedge is a diversified financial services group formed from the merger of Fimat and Calyon Financial, the brokerage arms of French financial giants Société Générale and Credit Agricole's capital markets business. It offers execution, clearing, prime brokerage, investment and asset financing services. Newedge is now one of the world's largest futures commission merchants and recently opened an India-based brokerage operation as part of its growth plan for the region.
The combination of SocGen's Fimat unit with the derivatives operation of Crédit Agricole's Calyon Financial division had pro forma revenues of €1 billion in 2007, trading a combined 5 million contracts a day and ranking among the top five FCMs on the 10 largest global exchanges. Fimat was formed in 1986 following the creation of Matif, the French derivatives exchange, adding the Fimat UK and Fimat USA arms and acquiring Brody White & Co., the U.S. brokerage, in 1995. Fimat had a network of 30 offices located in 27 key financial marketplaces around the world and a staff number over 2,055. It is a member of 49 futures and options exchanges and 21 stock exchanges.
Talks between the French banks stumbled in the past over the valuation of the two businesses, with Fimat roughly double the size of Calyon. There was also considerable internal resistance to the deal, which is expected to generate large synergies by eliminating overlapping teams and operations, as well as by combining technology systems on a single platform. The chairman and deputy chairman roles will alternate after two years.
The sector is dominated by the big investment banks and MF Global, the largest independent broker following its acquisition of assets from Refco. UBS agreed in 2006 to buy ABN Amro's FCM unit for $386 million. The rapid consolidation of the global futures exchange sector has increased pressure on the brokers to seek their own merger partners in order to increase their negotiating power with platforms such as the combination of the Chicago Mercantile Exchange and the Chicago Board of Trade.
Products and Services
Newedge offers clearing and execution services covering options and futures contracts for financial products and commodities, as well as for money market instruments, bonds, currencies, equities, and commodities on OTC markets. Newedge also provides prime brokerage, asset financing, an electronic platform for trading and order routing, cross margining, and the processing and centralized reporting of client portfolios.
Newedge Group launched Newedge Broker India Private Ltd. in November 2009 to provide financial derivatives and cash equities to institutional foreign investors in the Indian securities market. The new brokerage will be based in Mumbai with a staff of 20 and trade on the National Stock Exchange of India and the Bombay Stock Exchange. Newedge has identified India and China as major growth markets for the future, especially in commodities and derivatives.
In January 2010, Newedge announced that its Korea office had been granted a full futures license by the Korea Financial Services Commission. Newedge was the first foreign company out of the 19 foreign companies that applied for the license. With the full futures license, Newedge Korea became able to offer all products listed on the Korea Exchange (KRX) including equities and derivatives as of Jan. 4, 2010.
Also in January 2010, Newedge announced that Laurent Cunin had been appointed head of the Asia Pacific region for the firm, and Pierre Gay had been named global head of fixed income, currency and commodities. Gay would remain based in Hong Kong at least during the first quarter of 2010, making the transition with Cunin, who would be replacing him at the head of Asia Pacific region. Cunin was acting CEO Americas and head of sales Americas. He previously spent a total of eight years in Asia, and until 2005 was the head of Fimat’s Tokyo office.
In late November 2010, FFastFill announced that they had built a platform for Newedge customers to trade Chinese futures. The single trading screen provided connectivity to the Shanghai Futures Exchange, the Dalian Commodities Exchange, the Zhengzhou Commodities Exchange and the China Financial Futures Exchange.
John Lothian News Interviews
Gary DeWaal, group general counsel at Newedge, noted that Peregrine Financial Group (PFG) was able to dodge regulatory audit checks of its customer segregated funds for more than 20 years. DeWaal says that simply wouldn’t happen if the US adopted the system used in China’s futures markets called the China Futures Margin Monitoring Center Co. Ltd. (CFMMC). In November 2012, the National Futures Association and CME Group did just that, hiring AlphaMetrix to take on the job of confirming the money FCMs say they have in their segregated accounts, with money that is held at the bank.
Gary DeWaal of Newedge on 30 Years of Futures, Retirement and What’s Next
Gary DeWaal, group general counsel at Newedge, has been a stalwart of the futures industry for 30 years. He recently announced his “retirement” from Newedge, effective at yearend. DeWaal spoke with JLN Editor-in-Chief Jim Kharouf about how the futures industry has evolved and changed over the past three decades, where it goes from here, and why the word retirement should not really be used in the same sentence as Gary DeWaal. Published Oct. 16, 2012. Watch at JohnLothianNews.com
- Peter Barrowcliff, Global Head of Metals
- Brian Flaherty, US Head of Metals
- Wendy Law and Alan Burr, Co-Heads of APAC Metals
- ↑ Agricole and SocGen to combine derivatives. Financial Times.
- ↑ France's Newedge launches India brokerage unit. Reuters.
- ↑ FFastFill and Newedge Connect to Chinese Futures Markets. RFP Connect.
- ↑ Newedge History. Newedge Group.
- ↑ Confirmations: Made in China. John Lothian News.
- ↑ Gary DeWaal of Newedge on 30 Years of Futures, Retirement and What’s Next. John Lothian News.