ISE Acquires Assets of Longitude; Innovative Derivatives Auction Platform and Technology
April 04 2006 - 8:01AM
Business Wire
The International Securities Exchange (NYSE: ISE) announced today
that it has acquired the intellectual property and other related
assets of Longitude, Inc, inventor of a proprietary and patented
technology that uses parimutuel principles to run derivatives
auctions that aggregate liquidity and produce fair and efficient
market-driven prices. The new entity, to be named Longitude LLC,
will become an operating unit of ISE, which will retain
majority-ownership in partnership with Goldman Sachs, which is
increasing its pre-existing minority stake. Terms of the
transaction have not been disclosed. Since late 2002 Goldman Sachs
has used the Longitude platform to clear risk and build liquidity
for a wide range of auction products. Currently, the products
offered include options on economic data in partnership with the
Chicago Mercantile Exchange and options on certain energy market
statistics in partnership with ICAP Energy and the New York
Mercantile Exchange. Upon closing, the new Longitude LLC will
service these existing auction markets. "ISE has acquired
Longitude, in partnership with Goldman Sachs, to fulfill our vision
of delivering expanded product offerings for the industry that
demonstrate our commitment to growth and innovative technology,"
said David Krell, President and Chief Executive Officer of ISE. "We
believe that Longitude's platform complements ISE's existing
infrastructure and technologies and diversifies the suite of
capabilities that we can deliver to the market." Longitude's
platform facilitates development of event contracts and other new
derivatives contracts. This business will report into ISE's
Corporate Initiatives division, which is headed by Thomas Ascher,
Chief Strategy Officer. Tom Ascher noted that "ISE continues to
embrace new technology to expand our product delivery platform for
innovative derivatives products. We are committed to leveraging
Longitude's proprietary, patented technology to support and build
upon the exciting suite of products which have already been
developed." Laurie Ferber, Managing Director and head of Goldman
Sachs economic derivatives group, said "As one of the early
adopters of Longitude's unique risk transfer platform, we are
excited about the ISE's commitment to these markets and look
forward to working with them in bringing added innovation to our
existing markets and new outlets. Goldman Sachs is committed to
expanding the range of product offerings available to investors to
help them hedge their portfolios and manage the risks associated
with macro-economic events." ISE Background The International
Securities Exchange, the world's largest equity options exchange,
was founded on the principle that technology fosters and infuses
new efficiencies and operational innovations into securities
trading. After developing an innovative market structure that
integrated auction market principles into an advanced screen-based
trading system, ISE launched the first fully electronic US options
exchange in May 2000. ISE continually enhances its trading systems
to provide investors with the best marketplace to execute their
options orders. For more information about ISE, its products and
its technology, visit www.iseoptions.com. Goldman Sachs Background
Goldman Sachs is leading global investment banking, securities and
investment management firm that provides a wide range of services
worldwide to a substantial and diversified client base that
includes corporations, financial institutions, governments and high
net-worth individuals. Founded in 1869, it is one of the oldest and
largest investment banking firms. The firm is headquartered in New
York and maintains offices in London, Frankfurt, Tokyo, Hong Kong
and other major financial centers around the world. For more
information about Goldman Sachs, please visit www.gs.com. Forward
Looking Statements This press release contains "forward looking
statements." These statements relate to future events or our future
financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements, to be materially
different from those contemplated by the forward looking
statements. We undertake no ongoing obligation, other than that
imposed by law, to update these statements. Factors that could
affect our results, levels of activity, performance or achievements
and cause them to materially differ from those contained in the
forward looking statements can be found in our filings with the
Securities and Exchange Commission, including our registration
statement on Form S-1, current reports on Form 8-K and quarterly
reports on Form 10-Q, as amended.
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