GFIG » Topics » Competition

These excerpts taken from the GFIG 10-K filed Mar 2, 2009.

Competition

        Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our OTC brokerage services are currently other inter-dealer brokers and a few electronic brokerage platforms. Additional competition may arise from securities and futures exchanges. Our primary competitors for our data and analytics products are currently other inter-dealer brokers and data and technology vendors. Certain of our larger market data competitors offer electronic trading platforms for specific products.

        Inter-Dealer Brokers.    The current size of the wholesale inter dealer brokerage market is difficult to estimate as there is little objective, external data on the industry and several participants are private companies and do not publicly report revenues. Historically, the inter-dealer brokerage industry has been characterized by fierce competition for clients and brokers. Over the past several years, the industry has been characterized by the consolidation of well-established, smaller firms into five principal, global inter-dealer brokers: GFI Group Inc., ICAP plc, Tullett Prebon plc, Compagnie Financiere Tradition and Cantor Fitzgerald, and its subsidiary, BGC Partners Inc. We believe this consolidation has resulted from a number of factors, including: the consolidation of primary institutional dealer clients; pressure to reduce brokerage commissions, particularly in more commoditized products; greater dealer demand for technological capabilities and the need to leverage relatively fixed administrative and regulatory costs. We believe that consolidation should continue as volumes contract due to the on-going credit crisis, the global recessionary environment, and the deleveraging of hedge fund and dealer portfolios. Nevertheless, a number of smaller, privately held firms or consortia that tend to specialize in niche products or specific geographical areas remain in the market.

        Exchange and Exempt Commercial Markets.    In general, we do not compete directly with the major futures exchanges, such as the CME Group Inc. ("CME"), the Chicago Board Options Exchange, Eurex and Euronext.liffe, and exempt commercial markets like the one operated by ICE. These exchanges allow participants to trade standardized futures and options contracts. These contracts, unlike the less commoditized OTC products that we focus on, typically contain more standardized terms, and are typically traded in contracts representing smaller notional amounts. Furthermore, the introduction of such standardized exchange-traded futures and options contracts has, in the past, generally been accompanied by continuing growth in the corresponding OTC derivatives markets.

        We believe that exchanges will continue to seek to leverage their platforms and attempt to grow by introducing products designed to compete with certain products covered by inter-dealer brokers in the OTC marketplace or through acquisitions. In 2008, the CME acquired CMA, a credit data specialist, and ICE acquired Creditex, a specialist inter-dealer broker of credit derivative products.

        Additionally, governments and regulators in the U.S. and Europe have called for the centralized clearing of credit derivatives. Several exchanges and clearinghouses in the U.S. and Europe have proposed solutions for the clearing of credit derivatives and are in various stages of development and regulatory approval. The CME, with its existing clearinghouse, has partnered with a large hedge fund to provide an electronic trading platform to match buyers and sellers. This platform may be, to some extent, in direct competition with the inter-dealer brokers. In other cases, certain exchanges are proposing a clearing solution that will accept derivative transactions executed by inter-dealer brokers. We expect that pressure on the financial community by regulators and governments will lead to the clearing of certain credit derivatives in 2009, and we believe that multiple platforms will become available to market participants. We are involved in a number of these initiatives.

        Software, Analytics and Market Data.    Several large market data and information providers compete for a presence on virtually every trading desk in our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of

18


Table of Contents


these entities have announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases clients of, our data and analytical services. Further, we face competition for certain sales of our data products from our inter-dealer broker competitors and from data vendors, such as Markit, a consortium of major financial institutions.

Competition



        Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our OTC brokerage services are
currently other inter-dealer brokers and a few electronic brokerage platforms. Additional competition may arise from securities and futures exchanges. Our primary competitors for our data and
analytics products are currently other inter-dealer brokers and data and technology vendors. Certain of our larger market data competitors offer electronic trading platforms for specific products.



        Inter-Dealer Brokers.    The current size of the wholesale inter dealer brokerage market is difficult to estimate as there is
little objective, external
data on the industry and several participants are private companies and do not publicly report revenues. Historically, the inter-dealer brokerage industry has been characterized by fierce competition
for clients and brokers. Over the past several years, the industry has been characterized by the consolidation of well-established, smaller firms into five principal, global inter-dealer
brokers: GFI Group Inc., ICAP plc, Tullett Prebon plc, Compagnie Financiere Tradition and Cantor Fitzgerald, and its subsidiary, BGC Partners Inc. We believe this
consolidation has resulted from a number of factors, including: the consolidation of primary institutional dealer clients; pressure to reduce brokerage commissions, particularly in more commoditized
products; greater dealer demand for technological capabilities and the need to leverage relatively fixed administrative and regulatory costs. We believe that consolidation should continue as volumes
contract due to the on-going credit crisis, the global recessionary environment, and the deleveraging of hedge fund and dealer portfolios. Nevertheless, a number of smaller, privately held
firms or consortia that tend to specialize in niche products or specific geographical areas remain in the market.



        Exchange and Exempt Commercial Markets.    In general, we do not compete directly with the major futures exchanges, such as the CME
Group Inc.
("CME"), the Chicago Board Options Exchange, Eurex and Euronext.liffe, and exempt commercial markets like the one operated by ICE. These exchanges allow participants to trade standardized futures and
options contracts. These contracts, unlike the less commoditized OTC products that we focus on, typically contain more standardized terms, and are typically traded in contracts representing smaller
notional amounts. Furthermore, the introduction of such standardized exchange-traded futures and options contracts has, in the past, generally been accompanied by continuing growth in the
corresponding OTC derivatives markets.



        We
believe that exchanges will continue to seek to leverage their platforms and attempt to grow by introducing products designed to compete with certain products covered by inter-dealer
brokers in the OTC marketplace or through acquisitions. In 2008, the CME acquired CMA, a credit data specialist, and ICE acquired Creditex, a specialist inter-dealer broker of credit derivative
products.



        Additionally,
governments and regulators in the U.S. and Europe have called for the centralized clearing of credit derivatives. Several exchanges and clearinghouses in the U.S. and
Europe have proposed solutions for the clearing of credit derivatives and are in various stages of development and regulatory approval. The CME, with its existing clearinghouse, has partnered with a
large hedge fund to provide an electronic trading platform to match buyers and sellers. This platform may be, to some extent, in direct competition with the inter-dealer brokers. In other cases,
certain exchanges are proposing a clearing solution that will accept derivative transactions executed by inter-dealer brokers. We expect that pressure on the financial community by regulators and
governments will lead to the clearing of certain credit derivatives in 2009, and we believe that multiple platforms will become available to market participants. We are involved in a number of these
initiatives.



        Software, Analytics and Market Data.    Several large market data and information providers compete for a presence on virtually
every trading desk in
our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of



18









HREF="#bg74501a_main_toc">Table of Contents






these
entities have announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases
clients of, our data and analytical services. Further, we face competition for certain sales of our data products from our inter-dealer broker competitors and from data vendors, such as Markit, a
consortium of major financial institutions.



These excerpts taken from the GFIG 10-K filed Feb 29, 2008.

Competition

        Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our OTC brokerage services are currently other inter-dealer brokers and a few electronic brokerage platforms. Additional competition may arise from securities and futures exchanges. Our primary competitors for our data and analytics products are currently other inter-dealer brokers and data and technology vendors. Certain of our larger market data competitors offer electronic trading platforms for specific products.

        Inter-Dealer Brokers.    The current size of the wholesale inter dealer brokerage market is difficult to estimate as there is little objective, external data on the industry and several participants are private companies and do not publicly report revenues. Historically, the inter-dealer brokerage industry has been characterized by fierce competition for clients and brokers. Over the past several years, the industry has been characterized by the consolidation of well-established, smaller firms into five principal, global inter-dealer brokers: GFI Group Inc., ICAP plc, Tullett Prebon plc, Tradition Financial Services (a subsidiary of Cie Financiere Tradition) and Cantor Fitzgerald and its subsidiaries, BGC Partners Inc. and eSpeed, Inc. We believe this consolidation has resulted from a number of factors, including: the consolidation of primary institutional dealer clients; pressure to reduce brokerage commissions, particularly in more commoditized products; greater dealer demand for technological capabilities; the need to leverage relatively fixed administrative and regulatory costs and, increasingly, greater client demand for market information about correlated financial products. Nevertheless, a number of smaller, privately held firms or consortia that tend to specialize in niche products or specific geographical areas remain in the market.

        Exchanges.    In general, we do not compete directly with the major derivative exchanges, such as the CME Group Inc. ("CME"), the Chicago Board Options Exchange, International Securities Exchange, IntercontinentalExchange, the New York Mercantile Exchange, Eurex and Euronext.liffe. These exchanges allow participants to trade standardized futures and options contracts. These contracts, unlike the less commoditized, OTC products that we focus on, typically contain more standardized terms, are more commoditized, and are typically traded in contracts representing smaller notional amounts. Furthermore, the introduction of such standardized exchange-traded futures and options contracts has, in the past, generally been accompanied by continuing growth in the corresponding OTC derivatives markets. We believe that exchanges will continue to seek to leverage their platforms and attempt to grow by introducing products designed to compete with certain products covered by inter-dealer brokers in the OTC marketplace or through acquisitions. In 2007, several exchanges, including the CME, launched exchange-traded credit derivative futures contracts. However, no significant trading volumes have been reported on these efforts to date.

        Data and Analytics.    Several large market data and information providers compete for a presence on virtually every trading desk in our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of these entities have announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases clients of, our data and analytical services. Further, we face competition for certain sales of our data products from our inter-dealer broker competitors and from data vendors, such as Markit, formed as a consortium of major financial institutions.

17


Competition



        Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our OTC brokerage services are currently other inter-dealer
brokers and a few electronic brokerage platforms. Additional competition may arise from securities and futures exchanges. Our primary competitors for our data and analytics products are currently
other inter-dealer brokers and data and technology vendors. Certain of our larger market data competitors offer electronic trading platforms for specific products.



        Inter-Dealer Brokers.    The current size of the wholesale inter dealer brokerage market is difficult to
estimate as there is little objective, external data on the industry and several participants are private companies and do not publicly report revenues. Historically, the inter-dealer brokerage
industry has been characterized by fierce competition for clients and brokers. Over the past several years, the industry has been characterized by the consolidation of well-established,
smaller firms into five principal, global inter-dealer brokers: GFI Group Inc., ICAP plc, Tullett Prebon plc, Tradition Financial Services (a subsidiary of Cie Financiere
Tradition) and Cantor Fitzgerald and its subsidiaries, BGC Partners Inc. and eSpeed, Inc. We believe this consolidation has resulted from a number of factors, including: the
consolidation of primary institutional dealer clients; pressure to reduce brokerage commissions, particularly in more commoditized products; greater dealer demand for technological capabilities; the
need to leverage relatively fixed administrative and regulatory costs and, increasingly, greater client demand for market information about correlated financial products. Nevertheless, a number of
smaller, privately held firms or consortia that tend to specialize in niche products or specific geographical areas remain in the market.



        Exchanges.    In general, we do not compete directly with the major derivative exchanges, such as the
CME Group Inc. ("CME"), the Chicago Board Options Exchange, International Securities Exchange, IntercontinentalExchange, the New York Mercantile Exchange, Eurex and Euronext.liffe. These
exchanges allow participants to trade standardized futures and options contracts. These contracts, unlike the less commoditized, OTC products that we focus on, typically contain more standardized
terms, are more commoditized, and are typically traded in contracts representing smaller notional amounts. Furthermore, the introduction of such standardized exchange-traded futures and options
contracts has, in the past, generally been accompanied by continuing growth in the corresponding OTC derivatives markets. We believe that exchanges will continue to seek to leverage their platforms
and
attempt to grow by introducing products designed to compete with certain products covered by inter-dealer brokers in the OTC marketplace or through acquisitions. In 2007, several exchanges, including
the CME, launched exchange-traded credit derivative futures contracts. However, no significant trading volumes have been reported on these efforts to date.




        Data and Analytics.    Several large market data and information providers compete for a presence on
virtually every trading desk in our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of these
entities have announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases clients
of, our data and analytical services. Further, we face competition for certain sales of our data products from our inter-dealer broker competitors and from data vendors, such as Markit, formed as a
consortium of major financial institutions.



17









This excerpt taken from the GFIG 10-K filed Mar 1, 2007.

Competition

Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our OTC brokerage services are currently other inter-dealer brokers and a few electronic brokerage platforms. Additional competition may arise from securities and futures exchanges. Our primary competitors for our data and analytics products are currently other inter-dealer brokers and data and technology vendors. Certain of our larger market data competitors offer electronic trading platforms for specific products.

Inter-Dealer Brokers.   The current size of the wholesale brokerage market is difficult to estimate as there is little third party, external data on the industry and several participants are private companies and do not publicly report revenues. Historically, the inter-dealer brokerage industry has been characterized by fierce competition for clients and brokers. Over the past several years, the industry has been characterized by the consolidation of well-established, smaller firms into five principal, global inter-dealer brokers: GFI Group Inc., ICAP plc, Tullett Prebon plc, Tradition Financial Services (a subsidiary of Cie Financiere Tradition) and Cantor Fitzgerald and its subsidiaries, BGC Partners Inc. and eSpeed, Inc. We believe this consolidation has resulted from a number of factors, including:  the consolidation of primary institutional dealer clients; pressure to reduce brokerage commissions, particularly in more commoditized products; greater dealer demand for costly technological capabilities; the need to leverage relatively fixed administrative and regulatory costs and, increasingly, greater client demand for market information about correlated financial products. Nevertheless, a number of smaller, privately held firms or consortia that tend to specialize in niche products or specific geographical areas remain in the market.

Exchanges.   Certain derivatives exchanges allow participants to trade standardized futures and options contracts. Major derivative exchanges include the Chicago Mercantile Exchange, the Chicago Board of Trade, International Securities Exchange, IntercontinentalExchange, New York Mercantile Exchange, The Chicago Board Options Exchange, Eurex and Euronext.liffe. Exchange-traded products, unlike the OTC products we focus on, typically contain more standardized terms, are more commoditized, and are typically traded in contracts representing smaller notional amounts. We believe that exchanges will continue to seek to leverage their platforms and attempt to grow by introducing products designed to compete with certain of the products covered by inter-dealer brokers in the OTC marketplace. For

16




example, in 2006, several exchanges announced plans to launch an exchange-traded credit derivative futures contract.

Data and Analytics.   Several large market data and information providers compete for a presence on virtually every trading desk in our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of these entities have announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases clients of, our data and analytical services. Further, we face competition for certain sales of our data products from data vendors formed as a consortium of major financial institutions.

This excerpt taken from the GFIG 10-K filed Mar 24, 2006.
Competition

Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our over-the-counter brokerage services are currently other inter-dealer brokers and a few electronic brokerage platforms. Additional competition may arise from multi-dealer trading consortia and securities and futures exchanges. Our primary competitors for our data and analytics products are currently other inter-dealer brokers and data and technology vendors.  Certain of our larger competitors have announced their intention to offer enhanced electronic trading platforms for specific products.

Inter-Dealer Brokers.   The current size of the wholesale brokerage market is difficult to estimate as there is little third party, external data on the industry and several participants are private companies and do not publicly report revenues. Historically, the inter-dealer brokerage industry has been characterized by fierce competition for clients and brokers. Over the past several years, the industry has been characterized by the consolidation of well-established, smaller firms into five principal, global inter-dealer brokers: GFI Group Inc., ICAP Plc, the Tullett Prebon division of Collins Stewart Tullett Plc, Tradition Financial Services (a subsidiary of Cie Financiere Tradition) and Cantor Fitzgerald/BGC Partners L.P. and its publicly traded subsidiary, eSpeed, Inc. We believe this consolidation has resulted from a number of factors, including:  the consolidation of primary institutional dealer clients; pressure to reduce brokerage commissions, particularly in more commoditized products; greater dealer demand for costly technological capabilities; the need to leverage relatively fixed administrative and regulatory costs and, increasingly, greater client demand for market information about correlated financial products. Nevertheless, a number of smaller, privately held firms that tend to specialize in niche products or specific geographical areas remain in the market.

Consortia and Exchanges.   The Internet boom resulted in the establishment of many electronic brokerage or trading platform start-ups. Only a limited number of these firms, with either backing from groups that have organized themselves as a consortium of major dealers or from one or more inter-dealer brokers, have survived. Dealer firms within a consortium platform could elect to conduct a disproportionate or increased share of their business between other member firms, or even to deal directly with each other, thus reducing liquidity in the traditional inter-dealer markets and potentially reducing the size of our market.

Certain derivatives exchanges allow participants to trade standardized futures and options contracts. Major derivative exchanges include the Chicago Mercantile Exchange, the Chicago Board of Trade, The Chicago Board of Options, Eurex and Euronext.liffe. Exchange-traded products, unlike the over-the-counter products we focus on, typically contain more standardized terms, are more commoditized, and are typically traded in contracts representing smaller notional amounts. We believe that exchanges will continue to seek to leverage their platforms and attempt to grow by introducing products designed to compete with certain of the products covered by inter-dealer brokers in the over-the-counter marketplace.

Data and Analytics.   Several large market data and information providers compete for a presence on virtually every trading desk in our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of these entities have

16




announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases clients of, our data and analytical services. Further, we face competition for certain sales of our data products from data vendors formed as a consortium of major financial institutions.

This excerpt taken from the GFIG 10-K filed Mar 31, 2005.

Competition

        Competition in the inter-dealer brokerage industry is intense. Our primary competitors with respect to our brokerage services are currently other inter-dealer brokers, multi-dealer trading consortia and securities and futures exchanges. Our primary competitors for our data and analytics products are currently other data and technology vendors and other inter-dealer brokers.

        Inter-Dealer Brokers.    The current size of the wholesale brokerage market is difficult to estimate as there is little formal external data on the industry and several participants are private companies. However, we believe there are four major, diversified inter-dealer brokers with which we compete. Other inter-dealer broker competitors include a number of smaller firms that tend to specialize in specific product areas and several trading platforms for specific products.

        Consortia and Exchanges.    The Internet boom resulted in the establishment of many electronic brokerage or trading platform start-ups. Only a limited number of these firms, with either backing from groups that have organized themselves as a consortia of major dealers or from one or more inter-dealer brokers, have survived. Dealer firms within a consortium platform could elect to conduct a disproportionate or increased share of their business between other member firms, or even to deal directly with each other, thus reducing liquidity in the traditional inter-dealer markets and potentially reducing the size of our market.

        Certain derivatives exchanges allow participants to trade standardized futures and options contracts. Exchange-traded products, unlike the over-the-counter products we focus on, typically contain more standardized terms, are more commoditized, and are typically traded in contracts representing smaller notional amounts. Recently, several exchanges have entered into agreements with some inter-dealer brokers to clear over-the-counter products. We believe that exchanges will continue to seek to leverage their platforms and attempt to grow by introducing products designed to compete with certain of the products covered by inter-dealer brokers in the over-the-counter marketplace.

        Data and Analytics.    Several large market data and information providers compete for a presence on virtually every trading desk in our industry. Some of these entities currently offer varying forms of electronic trading of the types of financial instruments in which we specialize. Some of these entities have announced their intention to expand their electronic trading platforms or to develop new platforms. In addition, these entities are currently competitors to, and in some cases clients of, our data and analytical services. Further, we face competition for certain sales of our data products from data vendors formed as a consortium of major financial institutions.

10



Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki