00:00We are here in Miami. I'm Matt Miller, just upstairs from where Danny and Orlando were sitting.
00:04We're at the Bloomberg House in Miami for a special edition of Open Interest, and I have a special guest.
00:10Thomas Gallagher joins me. He's chairman and CEO of Miami International Holdings,
00:14an exchange based here in Miami that has seen tremendous growth over the last couple of decades.
00:21They actually operate eight exchanges here, and as part of a collaboration,
00:25Bloomberg and the Miami Exchange intend to launch futures and options
00:30and have a dedicated studio on the exchange floor as well.
00:33So I'm really excited to have you here, Thomas.
00:36Tell us, first of all, about your business and the growth that you've been able to chrysalide here.
00:40It's great to be here in Miami with you for Bloomberg House.
00:44So we have eight exchanges that we operate globally, four U.S. options exchanges.
00:49And last September, we operated, launched the first trading floor in the Wynwood section of Miami here called MyX Sapphire.
00:57So it's the first trading floor to be located in the state of Florida.
01:00And we're so excited to be here in Miami.
01:01So we also went public last August, and we were the third best performing IPO on the New York Stock
01:08Exchange last year.
01:10So we're very excited about that.
01:12So, you know, we talk a lot about the movement of Wall Street from New York down here to Miami,
01:19and surely from Chicago and L.A. as well, of just the finance industry.
01:23We're trying to cover it more and more.
01:26What kind of growth do you expect?
01:27Because this isn't going to stop.
01:29Well, what started out during the pandemic as a temporary relocation has become a full-fledged migration here.
01:37Favorable tax climate, favorable political climate.
01:39I think our trading floor, which right now is about six-tenths of one percent of the national volume,
01:50it can grow because a lot of the floor brokers want to migrate here.
01:55They want to be part of this new Wall Street South.
01:58And the talent's moving down here, firms like Citadel Securities, which are a major player on our floor.
02:04So we see a lot of growth coming here and also the opportunity to be in a jurisdiction that's very,
02:10very tax-friendly.
02:12I mean, anybody working up in New York and moves down here gets essentially a pay raise automatically with the
02:17tax situation.
02:18Plus, the weather is a little bit better than it often is in New York.
02:22Who are your shareholders?
02:24Who are your financers?
02:26Who's putting this together with your partners?
02:28Yeah, so, again, we have about a dozen market makers that also own our stock, firms like Citadel, Susquehanna, Jump
02:36Trading, Wolverine Trading.
02:39We also have great backers.
02:41Warburg Pincus financed our growth in building this MyEx Sapphire with a debt security $140 million, which we just repaid
02:50out of the IPO proceeds.
02:51So we have some of the world's most sophisticated trading firms anchoring our four options exchanges.
02:58And now what we're going to do is we're going to leverage those relationships and the technology.
03:02What got us here were the 14th largest exchange operator, and we didn't exist on December 6, 2012.
03:09What got us here was technology.
03:10Low latency, high throughput, deterministic systems.
03:14And that's going to allow us to pivot from multilisted options to futures products, financial futures, which we're really excited
03:20about doing that in conjunction with Bloomberg.
03:22We signed a 10-year licensing agreement, and our first product is the B100 that's launching on May 17th.
03:29And we increasingly talk more about the B100 and the B500 than, say, other indexes that we usually used as
03:39benchmarks.
03:39What about the infrastructure down here?
03:41Because if you move big companies like Citadel and more and more people come down from Goldman Sachs or J
03:46.P. Morgan and all the floor brokers that you're thinking of, they're going to have to find a place to
03:51live.
03:51They're going to have to put their kids in school.
03:53Is there enough of a, like, Greenwich, Westchester, you know, Short Hills scene down here around Miami in order to
04:01house those people?
04:03I think there is.
04:03But it takes a few pioneers to get people coming here.
04:07And I consider us a pioneer of the new Wall Street South.
04:11During the height of pandemic, who signs a 10-year lease for $20 million, about $90 a square foot, when
04:19I owned 400,000 square feet of space from the Minneapolis Grand Exchange, signing up a 10-year commitment?
04:25So when people like us come down, people like Citadel come down, and other financial services come down, and they
04:31see what we can do in this area, particularly with a great government and a great tax policy, it'll bring
04:38the talent.
04:39It'll bring the talent.
04:40So it takes people like us that are willing to make this leap.
04:42It's no coincidence that we've also had now five years of Formula One down here.
04:48You've got a PGA event this weekend.
04:50There's an advertising conference.
04:51I mean, there's a lot of business going on in Miami, isn't there?
04:54There is.
04:55You know, I hooked up with Governor Bush over 15 years ago, and he said to me, Tom, I'm interested
05:00in being part of this.
05:01I said, why, Gov?
05:02He said, because I felt like in my two terms as governor, I had a lot to do with making
05:06Miami a cultural hub, a tourism hub, a medical hub.
05:09Never felt like I made it a financial hub.
05:11So you coming here, building the first exchange in Miami, I think will really anchor a great migration to here
05:19of great talent, sophisticated talent, technology talent.
05:22And I'm going to honor that commitment.
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