Newedge
Encyclopedia
Newedge Group 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 a new India-based brokerage operation as part of its growth plan for the region.
and Société Générale
, respectively. The combination of Société Générale
'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 (futures commission merchant) 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 $386m. 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.
instruments, bond
s, currencies, equities, and commodities on the OTC
market. In addition to these products, Newedge has a wide array of value added services such as an electronic platform for trading and order routing, cross margining, and the processing and centralized reporting of client portfolio
s. Newedge's market coverage includes ETF
s (exchange traded derivatives), cash markets and OTC derivative
s pertaining to fixed income, interest rates, commodities, Forex (foreign exchange), metals, equities and indexes
, and energy and emissions.
in the United States, held a No. 1 ranking from the CFTC
for Segregated Funds for clients trading US markets. Newedge USA, LLC held a No.1 ranking for both Segregated Funds and combined funds for the majority of 2009, 2010 and 2011.
and cash equities to institutional foreign investors. Newedge Broker India Private Limited employs 20 staff and holds membership and licenses to trade on the National Stock Exchange of India
(NSE) and Bombay Stock Exchange
(BSE). Newedge Group has identified India, alongside China, as a priority for expansion as the company continues to grow its business. Expectations for additional growth are backed by the rise in volumes on India's financial markets. The NSE ranked number 8 in the Top Derivatives Exchanges in 2008, with two of its contracts in the top 10 among Equity Index Futures and Options.
Calyon Financial
Calyon Financial was a subsidiary of Calyon specializing in institutional futures and options brokerage, and was also a member of the Crédit Agricole Group....
, the brokerage arms of French financial giants Société Générale
Société Générale
Société Générale S.A. is a large European Bank and a major Financial Services company that has a substantial global presence. Its registered office is on Boulevard Haussmann in the 9th arrondissement of Paris, while its head office is in the Tours Société Générale in the business district of La...
and Credit Agricole
Crédit Agricole
Crédit Agricole S.A. is the largest retail banking group in France, second largest in Europe and the eighth largest in the world by Tier 1 capital according to The Banker magazine. It is also part of the CAC 40 stock market index....
's capital markets business. It offers execution, clearing
Clearing (finance)
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction....
, prime brokerage
Prime brokerage
Prime brokerage is the generic name for a bundled package of services offered by investment banks and securities firms to hedge funds and other professional investors needing the ability to borrow securities and cash to be able to invest on a netted basis and achieve an absolute return...
investment, and asset financing services. Newedge is now one of the world's largest futures commission merchants and recently opened a new India-based brokerage operation as part of its growth plan for the region.
Background
Newedge Group, formed on January 1, 2008, is jointly owned in a 50/50 split between the two forming companies' parent banks, CalyonCalyon
Crédit Agricole Corporate and Investment Bank is Crédit Agricole's corporate and investment banking entity. With a staff of 13,000 employees in 58 countries, Crédit Agricole CIB is active in a broad range of capital markets, investment banking and financing activities...
and Société Générale
Société Générale
Société Générale S.A. is a large European Bank and a major Financial Services company that has a substantial global presence. Its registered office is on Boulevard Haussmann in the 9th arrondissement of Paris, while its head office is in the Tours Société Générale in the business district of La...
, respectively. The combination of Société Générale
Société Générale
Société Générale S.A. is a large European Bank and a major Financial Services company that has a substantial global presence. Its registered office is on Boulevard Haussmann in the 9th arrondissement of Paris, while its head office is in the Tours Société Générale in the business district of La...
's Fimat unit with the derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
operation of Crédit Agricole
Crédit Agricole
Crédit Agricole S.A. is the largest retail banking group in France, second largest in Europe and the eighth largest in the world by Tier 1 capital according to The Banker magazine. It is also part of the CAC 40 stock market index....
's Calyon Financial
Calyon Financial
Calyon Financial was a subsidiary of Calyon specializing in institutional futures and options brokerage, and was also a member of the Crédit Agricole Group....
division had pro forma
Pro forma
The term pro forma is a term applied to practices or documents that are done as a pure formality, perfunctory, or seek to satisfy the minimum requirements or to conform to a convention or doctrine...
revenues of €1 billion in 2007, trading a combined 5 million contracts a day and ranking among the top five FCMs (futures commission merchant) 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 $386m. 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.
Product and Services
Newedge Group as a financial institution offers many different products generally involved in global asset execution, global asset clearing, prime brokerage solutions, global asset financing and market research. The firm is also versed in navigating money marketMoney market
The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit,...
instruments, bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
s, currencies, equities, and commodities on the OTC
Over-the-counter (finance)
Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....
market. In addition to these products, Newedge has a wide array of value added services such as an electronic platform for trading and order routing, cross margining, and the processing and centralized reporting of client portfolio
Portfolio (finance)
Portfolio is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual.-Definition:The term portfolio refers to any collection of financial assets such as stocks, bonds and cash...
s. Newedge's market coverage includes ETF
Exchange-traded fund
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...
s (exchange traded derivatives), cash markets and OTC derivative
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
s pertaining to fixed income, interest rates, commodities, Forex (foreign exchange), metals, equities and indexes
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....
, and energy and emissions.
Newedge USA, LLC
In May of 2011, Newedge USA, LLC, the corporation's subsidiarySubsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
in the United States, held a No. 1 ranking from the CFTC
Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....
for Segregated Funds for clients trading US markets. Newedge USA, LLC held a No.1 ranking for both Segregated Funds and combined funds for the majority of 2009, 2010 and 2011.
Newedge Broker India Pvt. Ltd.
Newedge Group launched Newedge Broker India Private Limited 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 focused on providing financial derivativesDerivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
and cash equities to institutional foreign investors. Newedge Broker India Private Limited employs 20 staff and holds membership and licenses to trade on the National Stock Exchange of India
National Stock Exchange of India
The National Stock Exchange is a stock exchange located at Mumbai, Maharashtra, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization...
(NSE) and Bombay Stock Exchange
Bombay Stock Exchange
The Bombay Stock Exchange is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was 1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest...
(BSE). Newedge Group has identified India, alongside China, as a priority for expansion as the company continues to grow its business. Expectations for additional growth are backed by the rise in volumes on India's financial markets. The NSE ranked number 8 in the Top Derivatives Exchanges in 2008, with two of its contracts in the top 10 among Equity Index Futures and Options.