NYX Nyse Euronext

NYSE Euronext (NYX) said Wednesday the global head of its derivatives business will leave next month as part of a broader restructuring.

Garry Jones will depart in late June and his position will be eliminated as part of a wide-ranging effort to cut costs and streamline the business, following the collapse of its planned merger with Deutsche Boerse AG (DBOEF, DB1.XE) and a years-long slide in trading activity.

The derivatives business is central to Chief Executive Duncan Niederauer's plans after the failed merger, generating 42% of group operating profit on 32% of its revenue last year. By combining with Deutsche Boerse, Niederauer had hoped to create a futures-trading giant to rival the likes of the CME Group Inc. (CME), but European Union fears over deal's potential to compromise competition in the market prompted lawmakers to block it.

Jones joined NYSE Euronext in 2007 and oversaw the London futures unit Liffe, as well as NYSE's stable of options platforms and its fledgling U.S. futures operation. He made the decision to depart as a result of a planned "realignment" of product and sales functions at NYSE Euronext, which included cutting the global head of derivatives job, according to the company.

While Jones will not be replaced, a head of the London-based Liffe platform will be named and likely will be drawn from candidates within the company, according to a person familiar with the matter.

Liffe in particular has suffered from a slowdown in trading volume. Income from NYSE Euronext's derivatives markets fell 46% in the first quarter of 2012 versus the prior-year period, as the company's core interest-rate futures business continued to face headwinds stemming from the 2008 financial crisis. Central banks dropped benchmark interest rates to near-zero levels in response to the crisis, an effort to keep credit cheap and encourage lending. The move dented the demand from banks and other borrowers to use futures contracts to shield themselves against shifts in the rates.

Last month Niederauer outlined a plan to save $250 million in annual expenses by the end of 2014, ranging from reducing headcount to streamlining NYSE Euronext's technology. Niederauer is in London this week overseeing the restructuring, according to a person familiar with the matter.

NYSE Euronext confirmed Jones's departure in a statement Wednesday after earlier issuing an internal memo confirming he would leave at the end of June after a transitional period, according to a person familiar with the matter.

"Realigning our organization around product platforms and refocusing our sales efforts will help us optimize and deepen the relationships we have with our global clients, simplifying their interface with our company and allowing us to respond more quickly to their needs and opportunities," said Niederauer in a statement.

Jones didn't respond to a request for comment.

Jones's planned departure marks the second NYSE executive-level position trimmed in recent months. In March, NYSE Euronext's chief administrative officer, Andrew Brandman, left the exchange group and his position was eliminated, with other officials taking on his responsibilities.

Following the collapse of the Deutsche Boerse deal, NYSE Euronext said it would reprise plans to build a derivatives clearinghouse in London in order to capitalize upon new regulations that will force the majority of standardised over-the-counter derivatives through clearing houses.

Jones joined NYSE Euronext's derivatives exchange Liffe five years ago from interdealer broker Icap plc (IAP.LN, IAPLY), where he was head of electronic broking for Europe. He had been chief executive of BrokerTec, the fixed-income trading platform bought by Icap in 2003. Before that he worked as a senior bond and derivatives trader with a number of banks, including Merrill Lynch, Bankers Trust and BNP Paribas.

Initially Jones served as Liffe's head of strategy and development, before being promoted to NYSE Euronext global head of derivatives in 2009, at which time he joined the expanded exchange group's management committee.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com; Twitter: @jacobbunge

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