NASDAQ OMX

by · June 14, 2012

OMX AB, formed out of the merger between OM AB and HEX plc, is the holding company for eight stock exchanges in Scandinavia and Nordic and Baltic countries. It is a Swedish-Finnish company whose financial services division, OMX Technology, develops trading systems for financial instruments for use in exchanges owned by OMX as well as other exchanges the world over. It is a world leader in financial instruments trading systems. Following an acquisition in February 2008, it is now a part of the NASDAQ OMX Group.

Early History

Initially, OM AB was primarily a futures exchange. Founded by Olof Stenhammar in 1980s, it introduced standardized option contracts in Sweden. In 1998, OM AB took over the Stockholm Stock Exchange. It also tried to acquire the London Stock Exchange in 2001 but failed. In collaboration with Morgan Stanley Dean Witter, an investment bank, the company launched a virtual European stock exchange, Jiway, which failed and eventually cancelled on 14th October 2002.

Mergers, Acquisitions and Expansions

The merger that changed the name of the company occurred on September 3rd of 2003 when the Helsinki Stock Exchange (HEX) and OM AB merged to form, OM HEX, later changed to OMX on August 31 2004.

This was followed by a series of acquisitions in the coming years:

  • January 2005: OMX acquired the Copenhagen Stock Exchange for € 164 million.
  • September 19, 2006: Eignarhaldsfelagid Verdbrefathing, owner of Iceland Stock Exchange, announced that the exchange will be taken over by OMX in a deal valued at 250 million SEK. The formal acquisition took place by the end of the year.
  • October 2006: OMX takes a 10% stake in Oslo Børs Holding ASA, holding company of Oslo Stock Exchange.
  • November 2007: Acquisition of the Armenian Stock Exchange and Central Depository.

First North, an alternative exchange for smaller companies in Denmark, was launched in December 2005. Eventually, First North expanded its services to include smaller companies in Stockholm (June 2006), Iceland (January 2007) and Helsinki (April 2007).

Acquisition of the Markets Technology division of Computerhsare, an Australian share registry firm, in 2006 was instrumental in expansion of OMX’s portfolio of services.

Shares listed on OMX-owned Nordic stock exchanges were merged for the purpose of establishing a virtual Nordic Stock Exchange, finally launched on October 2, 2006 along with a benchmark index, OMX Nordic 40. Later, the companies listed on the Iceland Stock Exchange were also included. However, the individual exchanges continued with their own benchmark indices.

NASDAQ OMX Group

OMX was finally taken over by NASDAQ to form the NASDAQ OMX Group. The announcement of the agreement to buy OMX for US$ 3.7 billion was made on May 25, 2007. However, in August 2007, before the transaction could be completed, Borse Dubai offered to a price of US$ 4 billion. A major bidding war was averted with Borse Dubai agreeing to stop bidding in exchange for a 20% stake in OMX, 5% votes in NASDAQ along with the 28% stake that NASDAQ then held in London Stock Exchange. In what was a complex transaction, Borse Dubai bought 97.2% of outstanding shares of OMX and sold them to NASDAQ. The merger finally took place on February 27, 2008 and the company was named NASDAQ OMX Group.

OMX Exchanges and Stock Market Divisions

List of OMX exchanges:

  • Helsinki Stock Exchange
  • Stockholm Stock Exchange
  • Copenhagen Stock Exchange
  • Iceland Stock Exchange
  • Armenian Stock Exchange
  • Oslo Stock Exchange (10% stake)
  • Tallinn Stock Exchange
  • Riga Stock Exchange
  • Vilnius Stock Exchange

OMX’s stock market activities are operated through its three divisions:

  • Nordic (Copenhagen, Stockholm, Helsinki and Iceland stock exchanges)
  • Baltic (Tallinn, Riga and Vilnius stock exchanges)
  • First North (alternative exchange)

OMX Technology

OMX has some high profile clients in North America. These include FINRA (Financial Industry Regulatory Authority), IDCG, ISE and ICAP. Trademark OMX trading systems include X-stream, SAXESS, CLICK and CONDICO.

OMX is also among the leading providers of technology related Central Securities Depository (CSD) services. Many OMX clients in Europe, Africa, the Middle East and the Caribbean use its premier CSD product, the Equator CSD.

OMX technology is focusing on Central Counterparty Clearing, the process through which financial transactions in equities and derivatives are cleared by a single counterparty and electronic trading platforms. For this purpose, OMX developed and markets SECUR clearing and Genium trading platforms.

OMX Technology has an impressive client list.

  • Australian Securities Exchange
  • National Stock Exchange of Australia
  • Boston Stock Exchange
  • Canadian Trading and Quotation System
  • European Derivatives Exchange
  • SWX Swiss Exchange
  • Icelandic Securities Depository
  • International Securities Exchange
  • Hong Kong Exchanges and Clearing
  • Zagreb Stock Exchange
  • Agora-X
  • Athens Exchange
  • Moscow Interbank Currency Exchange
  • Tokyo Commodity Exchange
  • Osaka Securities Exchange
  • Singapore Commodity Exchange
  • Singapore Exchange
  • Shanghai Stock Exchange
  • Thailand Futures Exchange
  • Indonesia Stock Exchange
  • Financial Industry Regulatory Authority
  • ICAP
  • Abu Dhabi Securities Exchange
  • Doha Securities Market
  • Dubai Financial Market
  • Dubai International Financial Exchange
  • Bahrain Stock Exchange
  • Palestine Securities Exchange
  • Saudi Arabia Stock Exchange (Tadawul)
  • Cairo and Alexandria Stock Exchange
  • Iraq Stock Exchange
  • Istanbul Stock Exchange
  • Barbados Stock Exchange
  • Bahamas International Securities Exchange
  • Bolsa de Valores de Colombia
  • Jamaica Stock Exchange
  • Trinidad and Tobago Stock Exchange
  • Malta Stock Exchange
  • Nigerian Stock Exchange
  • NSX Corporate Stock Exchange
  • Philippine Dealing and Exchange Corporation
  • PLUS Markets Group
  • Port Moresby Stock Exchange
  • TLX

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