KPMG Brokerage M&A Monthly


January 2010	SEARCH ANALYSIS ARCHIVE FEEDBACK

KPMG ANALYSIS

Proposed Regulations on Basis Reporting by Securities Brokers and Basis Determination for Stock

The mandatory reporting of cost basis as required under the proposed Act reflects a significant departure from current practice.

The Importance of Managing Working Capital

Companies that can generate cash from working capital and other parts of their balance sheets will be better positioned to respond to market changes and to create shareholder value.

Feature of the Month

Wall Street Faces Pain From Buyout Cutback

REUTERS HEDGEWORLDIf major banks give up their private equity and hedge fund investments, their bottom lines could take a real hit because these investments also are a key source of underwriting and advisory fees.

NEWS FROM REUTERS

JPMorgan in Talks to Carve Up RBS Sempra

The commodities venture may be carved up between the bank and Sempra Energy, due to renewed pressure on U.S. banks to limit proprietary trading.

Hunger for Buyout Deals Back After Forced Diet

Buyouts are finally returning for the deal-hungry private equity industry as the cost of debt has fallen.

Nasdaq CEO Says 'Co-Location' Needs Regulation

The chief executive believes the fast-growing practice, where trading firms place computers next to exchanges to lower trade execution times, needs regulation.

Other News

Liquidity Would Hold Up If Bank Proprietary Desks Are Chopped

REUTERS HEDGEWORLD If the U.S. government prohibits banks from proprietary trading, it would likely leave trading activity, exchanges and interdealer brokers unhurt in the long run.

SEC Rules to Tighten `Naked' Sponsor Access

FORT WAYNE JOURNAL GAZETTE [LEXISNEXIS]Federal regulators have proposed new requirements for brokerage firms aimed at reining in risk from their trading customers who get split-second access to markets to buy or sell stocks.

INDUSTRY M&A ACTIVITY

TD Waterhouse, one of the U.K.'s leading online brokers, agreed to acquire the U.K. customer base of E*Trade Securities Limited. Terms were not disclosed. (01/27)

Infinium Capital Management, a Chicago- based commodity trading firm, agreed to acquire the Chicago- based equity options trading firm, Fox River Partners. Terms were not disclosed. (01/20)

LaBranche & Co, one of the largest market-makers on the NYSE, agreed to sell its NYSE designated market maker business to Barclays Capital for $25 million. (01/13)

FXall, an institutional multi-bank electronic foreign exchange platform, agreed to acquire Citi's LavaFX platform. Terms were not disclosed. (01/04)

Source: Company press releases.

MERGER STATISTICS

Although deal activity in the brokerage sector declined in the fourth quarter of 2009 as compared to the third quarter of 2009, deal value increased significantly. The increase in deal value was driven by Wells Fargo's $4.5 billion buy-out of Prudential's stake in the joint brokerage venture, Wells Fargo Advisors.

View data detail.

KPMG’S TRANSACTION SERVICES PRACTICE

KPMG’s Transaction Services and M&A Tax practices comprise over 600 partners and professionals in the United States, solely devoted to providing acquisition and divestiture support and advisory services to strategic and financial investors.

For more information about KPMG's transaction services capabilities in the brokerage sector please contact: Miguel Sagarna, Principal at 212 872 5543 (msagarna@kpmg.com) or Ram Menon, Managing Director at 212 954 3448 (rammenon@kpmg.com).

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