Chinese Investment Firm Buys Chicago Stock Exchange

Nick Kangadis | February 8, 2016
Font Size

(Image: Bruce Leighty/Getty Images)

One of the oldest financial institutions in the United States has just been handed over to a Chinese-led investment firm.

On Friday the Chicago Stock Exchange was sold to Chongqing Casin Enterprise Group.

The 134-year-old exchange only handles 0.5% of U.S. trading, but the deal does give a Chinese company, and essentially China, a stake at the U.S. trading table.

As reported by CNN:

Privately-held Casin Group was founded in 1997 and has investments in real estate, environmental protection, finance and other areas. The Chicago Stock Exchange is minority-owned by a group that includes Bank of America (BAC), E*Trade (ETFC), Goldman Sachs (GS) and JPMorgan Chase (JPM).

This would not be the first time a foreign entity bought or merged with a U.S. exchange.

In 2007, Nasdaq changed its name to Nasdaq OMX Group after merging with the Nordic exchange. Obviously, Nasdaq has since gone back to being a one-name exchange.

Author and trader Joe Saluzzi said the following about the acquisition: 

“Does foreign ownership open up any potential for information leakage to someone who can take advantage of it? As an investor, I would raise an eyebrow."

This purchase comes in the midst of a “Chinese shopping spree.”

According to Dealogic, Chinese companies in January announced their plans to buy 66 foreign companies worth an estimated $68 billion. That is the financial equivalent to 60 percent of all deals China made last year.