ISE CEO sees Eurex accessing U.S. markets

By Jonathan Keehner

NEW YORK (Reuters) - A combined International Securities Exchange Inc. (ISE) ISE.N and Eurex would give the European exchange, operated by Deutsche Boerse AG (DB1Gn.DE: Quote, Profile, Research, Stock Buzz) and SWX Swiss Exchange, access to U.S. markets and cause little disruption at the U.S. options exchange, ISE's chief executive said on Wednesday.

"We've done a very good job, they think, and they don't want to change that," said David Krell, speaking at the Reuters Exchanges and Trading Summit in New York. "What Eurex envisions is for ISE to operate in our marketplace the way we have been operating."

Krell expects little turnover of his roughly 220 employees, adding that the new joint company had incentives in place to maintain ISE employees.

"They didn't buy the furniture," he said.

The $2.8 billion offer for ISE, the largest U.S. equity options market, made last week by Frankfurt-based Deutsche Boerse and Zurich's SWX, would create a market with over 2.1 billion contracts traded in 2006 and 545 exchange members, the companies said.

Krell stressed that the deal would give Eurex a U.S. footprint not only in derivatives but also in equity trading through the recently launched ISE Stock Exchange.

"We think there is a great deal of pent-up demand outside the U.S. for trading in the U.S.," he said, adding that the deal would create a direct link between ISE and Eurex, allowing greater access to U.S. securities.

U.S. investors are restricted in their ability to trade securities registered abroad, Krell added, but a combined ISE-Eurex may benefit from trans-Atlantic trading from either side.  Continued...