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Adding Value
Exchanges can increase revenues and strengthen relationships by offering a range of corporate services to their listed companies.
 Exchange revenues have not returned to the levels seen before the financial crisis hit. In times of low volume, few IPOs and increased competition for listings, exchanges need to look elsewhere to increase revenue streams.
Providing corporate services to listed companies is one way exchanges can increase revenues and deepen client relationships at the same time. As opposed to raising fees for existing services, these new services provide a value by helping listed firms reduce their cost of being public, consolidate service providers, reduce and extend budgets, and become better and more efficient public companies. Exchanges can earn new revenues while helping their clients improve communications and cut expenses.
“The demand for service is high and the level of interest is strong,” says Demetrios Skalkotos, Senior Vice President for NASDAQ OMX Global Corporate Services. “NASDAQ OMX was the first exchange to offer corporate services to listed companies, and we currently provide services to more than 2,500 globally listed companies. Exchanges around the world are very interested in leveraging our experience to help their customers become better public companies.”
Corporate services generally help companies manage being public companies and often involve providing company information to individuals, shareholders and institutional investors. Good examples include managing investor relations web sites, providing news distribution services and insuring secure board communications. One such service offered by NASDAQ OMX is Director’s Desk, a hosted online board management tool that enables corporate secretaries to manage board meetings and to communicate electronically without traversing the public Internet.
Exchanges are uniquely qualified to provide these services because of their role in a corporation’s life as a public entity. Companies prefer to consolidate with one provider to simplify the processes and reduce their costs.
Recently, NASDAQ OMX began to work with Brazil’s BM&FBOVESPA to improve its investor relations web site platform; create a Director’s Desk portal, and expand its news distribution service so that BM&FBOVESPA listed companies can send press releases to the U.S. BM&FBOVESPA plans to sell these services to its listed companies.
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José Antonio Gragnani
Chief Business Development Officer, BM&FBOVESPA
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“BM&FBOVESPA believes that the partnership with NASDAQ OMX to distribute corporate services will be valuable for listed Brazilian companies,” says the Exchange’s Chief Business Development Officer, José Antonio Gragnani.
“It will offer these companies tools to broaden their communication with both investors and the market, especially in the international arena, and is in line with our objective of providing diversified services to our clients.”
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Nor should exchanges limit their client base to current listings. These services may also appeal to private companies opening up new markets and provide a way to introduce exchanges to potential new listings. Exchanges that create technology platforms and provide more services to listed clients will benefit from strengthened relationships and the potential for increased revenue.
Potential New Corporate Services
- Investor relations web sites
Facilitate communications among companies, shareholders and the investment community in both English and local languages.
- News distribution services
Offer direct distribution of press releases, earnings reports and disclosure announcements to all relevant audiences worldwide in any language.
- Board meeting process automation
Provides secure board communications to improve board effectiveness and minimize the time and paperwork required to keep boards informed.
Establish a web-based platform enabling videos, social media and on-demand accessibility.
By Lawrence Carrel
Photo: Getty Images
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