Merger of Mercantile Exchange, Commodity Exchange proposed Plan is subject to boards' approval

August 21, 1993|By Michael Quint | Michael Quint,New York Times News Service

NEW YORK -- The leading exchanges for trading oil and gold futures announced a merger plan yesterday under which the New York Mercantile Exchange would pay $50 million to members of the Commodity Exchange of New York.

The agreement, which could help keep the Mercantile Exchange from moving to New Jersey, would enable the two exchanges to cut expenses by reducing duplication in computer systems and in the work force that handles marketing, accounting and product development.

Under the merger plan, the Commodity Exchange, a major market for gold, would operate as a separate exchange owned by the Mercantile Exchange instead of by its own members. The agreement reached by the boards of both exchanges is subject to the approval of their members in votes planned next month.

Daniel Rappaport, chairman of the Mercantile Exchange, known as Nymex, said that if the merger were completed Nymex would again consider moving to a proposed new commodity trading center near Chambers Street in Manhattan. Development of the trading center has the backing of city officials and other futures exchanges in New York, including the Commodity Exchange, known as Comex.

Nymex, the world's leading futures market for oil, had previously decided not to participate in building a new trading center in New York and was instead considering moving to new quarters in New Jersey or expanding at its current site at 4 World Trade Center, where the other futures exchanges are also situated.

Mr. Rappaport said yesterday that if the merger with the Comex did not occur and the two exchanges remained separate, then it would be unlikely they would share quarters.

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