March 1, 2011 / 12:08 AM / 8 years ago

D.Boerse-NYSE not seen U.S. security risk

WASHINGTON (Reuters) - A senior U.S. Treasury official said he did not see any national security concerns with Deutsche Boerse’s (DB1Gn.DE) planned takeover of NYSE Euronext NYX.N.

Broken phones are seen on the floor of the New York Stock Exchange, February 23, 2011. REUTERS/Brendan McDermid

“I don’t have any national security concerns on this at the moment,” Deputy Treasury Secretary Neal Wolin told the Reuters Future Face of Finance Summit on Monday.

The deal between the German market and the iconic New York-based exchange must win approval from the Securities and Exchange Commission and the Justice Department’s antitrust division.

The chief executive of NYSE has said he expects the deal to also be reviewed by a U.S. Treasury-led national security panel.

“Everyone is paying extra attention to the robustness of the technology platforms,” NYSE’s Chief Executive Duncan Niederauer said earlier in February when the merger was formally announced.

Security concerns about exchanges resurfaced recently after Nasdaq said it found “suspicious files” on its U.S. computer servers and determined that hackers could have affected one of its Internet-based client applications.

The Committee on Foreign Investment in the United States (CFIUS) reviews foreign investments to ensure they pose no threat to national security and has the power to block business deals.

Chaired by Treasury Secretary Timothy Geithner, the panel is comprised of eight other voting members, including the secretaries of state, defense, commerce and homeland security.

The Treasury Department later clarified that Wolin was not commenting directly on CFIUS.

“Treasury does not publicly discuss potential or actual CFIUS transactions, including whether or not they have been filed with CFIUS for review,” Treasury said.

In less than three weeks, Deutsche Boerse announced a bid for NYSE Euronext, London Stock Exchange (LSE.L) unveiled plans to take over Toronto Stock Exchange parent TMX Group Inc (X.TO), and BATS Global Markets said it would buy fellow privately-owned venue operator Chi-X Europe.

The frenetic rush revived a consolidation wave that swept exchanges between 2006 and 2008 and raised some thorny questions over whether politicians and regulators would ultimately block them.

The consolidation among global exchanges has caught the eye of the Financial Stability Oversight Council, which was created under last year’s Dodd-Frank legislation to monitor risks across the financial system.

The Treasury Department heads the council.

“The council as a whole, I think it is fair to say, is keenly focused on all developments in the financial services sector that are sort of bigger than a bread basket,” said Wolin.

Reporting by David Lawder, Sarah N. Lynch, Rachelle Younglai Editing by Tim Dobbyn and Gerald E. McCormick

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