According to Mr. Frucher, "The effort to demutualize is a mature phenomenon in the international markets and is becoming a more prevalent and preferred corporate structure among U.S. exchanges, as well. This authorization by the Board of Governors recognizes that to take the Exchange to the next level and position it as a nexus in a global, interconnected market, a structural change is required that will benefit all members and owners alike who have invested in the Exchange."
The development of a demutualization plan is likely to generate significant benefits to the institution, the current seat owners and the member trading community. Chief among these benefits are the following:
- The enhancement of the PHLX's agility in the marketplace.
- The facilitation of relationships with strategic partners and the capital markets.
- The ability to extract greater value from currently locked Exchange assets including licenses, proprietary technology and investments in multiple markets - thus enhancing the benefits to PHLX stakeholders.
Mr. Frucher said the economic benefits of demutualization appear compelling and that the Exchange's plan will be a vehicle to capture this potential. At the same time, he said, the PHLX plan will be designed to ensure the SRO status of the Exchange and its long-held historical responsibility to protect its stakeholders and the investing public.
Mr. Frucher further stated: "Management will now begin to communicate with Exchange constituencies and with outside counsel, tax advisers, bankers and other advisers to develop a definitive plan for demutualization, which it will present to the Board of Governors for discussion at their next meeting."
The Philadelphia Stock Exchange (PHLX) was founded in 1790. The PHLX trades more than 2,200 stocks, 1,016 listed equity options, 12 sectors index options and currency pairs. For more information about the PHLX and its products, visit www.phlx.com.
