New York Mercantile Exchange (Nymex)'s decision to perform an IPO could hinder any future transition to trade fully electronically if, as suggested by a number of sources, the majority of the limited initial equity offering were to be snapped up by existing members.
Nymex said in its provisional Securities and Exchange Commission (SEC) filing that it was proposing to offer stock to the value of $250m, which sources told FO Week was understood to be around 10% of Nymex's overall value.
With a relatively small initial placement, it has been suggested that Nymex's current members would be the most likely investors; the same members who have consistently opposed the exchange becoming electronically focused.
Potential investors in Nymex could be limited at first with a noticeable absence of funds getting involved, one market veteran said.
"Will some of the funds start throwing their weight around and make investments into Nymex? I'm...