(Updates throughout with additional background, detail)
By Tess Stynes and Jacob Bunge
DOW JONES NEWSWIRES
NYSE Euronext (NYX) said Tuesday that Walter Lukken, the former
head of the Commodity Futures Trading Commission, would run the new
clearing venture spearheading the company's expansion in the U.S.
derivatives sector.
The exchange operator is seeking approval from the CFTC and
other agencies to launch the New York Portfolio Clearing business.
Lukken, who joined the company last summer, will become chief
executive of the unit on May 1.
The appointment of Lukken adds political clout to NYSE
Euronext's U.S. derivatives strategy at a time when lawmakers in
Washington are shaping new laws likely to require more off-exchange
products to be routed through clearinghouses such as NYPC.
Lukken, who served as Republican acting chairman of the CFTC
from mid-2007 until early 2009, guided the U.S. futures regulator
through the height of the financial crisis, and has been a
proponent of shifting over-the-counter derivatives trade to
exchange-backed platforms.
NYSE Euronext is developing NYPC, a joint venture with the
Depository Trust & Clearing Corp., as it prepares to challenge
the dominance of Chicago-based CME Group Inc. (CME) in futures
products tied to U.S. interest rates.
The venture is targeted for launch in July, and will clear cash
Treasury transactions alongside related futures contracts. The
combination aims to make it cheaper for customers who post
collateral against trades in both markets.
Lukken resigned from the CFTC to join NYSE Euronext as senior
vice president of global market structure, a new position at the
time. He has been serving in Washington as senior vice president in
the NYSE general counsel's office and is on the board of the NYSE
Liffe derivatives unit.
NYSE Euronext Chief Executive Officer Duncan Niederauer in a
statement called Lukken "the ideal candidate to lead NYPC in
opening the U.S. futures market to new competition."
Lukken began his tenure at the CFTC as a commissioner in August
2002, having previously served as counsel to the Senate
Agricultural Committee, which oversees the CFTC. He also worked for
the office of Sen. Richard Lugar (R., Ind.).
His role as chief executive of NYPC marks his first leadership
post in the private sector, and comes as Niederauer positions
derivatives as the centerpiece of the exchange operator's
growth.
Futures and options trading has become a focus as NYSE
Euronext's core stock-trading business has been chipped away by a
host of small, electronic platforms in the U.S. and Europe, while
more shares are traded off-exchange.
Lukken is not the first CFTC leader to move to an
executive-level position in the exchange sector. James E. Newsome,
who led the futures agency from 2001 until mid-2004, took over as
president of the New York Mercantile Exchange after leaving the
CFTC. He presided over the Nymex's 2008 sale to CME, where he is
now a board member.
NYSE Euronext shares were 0.5% higher in early trading Tuesday
at $32.14. The stock is up 27% this year, more than the broader
market.
-By Tess Stynes and Jacob Bunge, Dow Jones Newswires;
212-416-2481; Tess.Stynes@dowjones.com