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Operator
Good day and welcome to the NASDAQ OMX fourth quarter 2009 earnings results conference call.
Today's call is being recorded.
At this time, I would like to turn the conference over to Vice President of Investor Relations, Mr.
Vince Palmiere.
Vince Palmiere - VP IR
Thank you, operator.
Good morning everyone, and thanks for joining us today to discuss NASDAQ OMX's fourth quarter and full year 2009 earnings results.
Joining me are Bob Greifeld, Chief Executive Officer, Adena Friedman, Chief Financial Officer, and Ed Knight, our General Counsel.
Following our prepared remarks, we'll open up the line for Q&A.
You can access the results press release and the presentation on our website at www.NASDAQOMX.com.
We intend to use the website as a means of disclosing material non-public information and complying with disclosure obligations under SEC regulation FD, and these disclosures will be included under the events and presentation section of our site.
Before I turn the call over to Bob, I'd like to remind you that certain statements in the prepared presentation and during the subsequent Q&A period may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
The actual results might differ materially from those projected in the forward-looking statements.
Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and in our periodic reports filed with the SEC.
And with that, I'll turn it over to Bob.
Bob Greifeld - Chairman, CEO
Thank you, Vince and thank you everybody for joining us this morning to discuss our fourth quarter 2009 results.
Today is a day of celebration for us at NASDAQ OMX, and not certainly because the Saints won last night.
Today, February 8th, is the anniversary date of the date that NASDAQ was founded.
So it's our 39th birthday.
And we cannot think of a better way to celebrate than by announcing the launch of INET in seven of our cash equity markets in the Nordic and the Baltics.
The launch of this trading plat form is designed to increase liquidity, increase trading velocity and improve operational efficiencies.
So if you're in New York, near our One Liberty Plaza office, please stop by for birthday cake and celebratory cake.
Now I'd like to turn to the quarter.
I will begin my remarks by spending a few minutes highlighting some key accomplishments and then update you on the progress of our initiatives.
Adena Friedman, our CFO, will walk you through the financials in detail.
This morning we reported net income of $43 million, or $0.20 per diluted share.
On a non-GAAP basis, we delivered a solid quarter, with net income of $99 million, or $0.46 per share, an increase of 11% when compared with pro forma non-GAAP net income of $89 million or $0.42 per diluted share for the third quarter of 2009.
During the quarter, we witnessed growth in many of our business drivers, enabling us to benefit from the scalable nature of our model.
In European derivatives trading and clearing, our volumes grew to more than 28 million transactions, up 18% from the third quarter of 2009, and reaching their highest levels for the year.
In January 2010, we saw volumes grow again with average daily volume increasing another 18% from fourth quarter levels.
Leading this growth in volume is the volume that transitioned from EDX during the quarter.
Our contract with EDX ended in December, and we were successful in moving virtually all the volume in OMX-branded derivatives from EDX to our derivatives trading platform in the Nordics.
In conjunction with this transition, we welcomed 34 clearing members to our European clearinghouse in December.
This increased our total membership by 60% when compared to the prior year.
Many of the new members are London-based and previously cleared with LCH.
As members of our European clearinghouse, they now have access to all our fixed income, equity, index and commodity derivatives products through one trading and clearing platform.
Finally, within European derivatives, we witnessed growth in our commodities businesses, where cleared energy contracts were up 14% from the fourth quarter of 2008, and 28% from the third quarter of 2009.
In cash equities, we successfully introduced central counter party clearing in the fourth quarter and during this transition, we were able to maintain market share of approximately 84%.
Although value traded declined slightly from the third quarter, in January 2010 we saw activity rebound as average daily value traded increased to EUR2.7 billion, up 23% from the fourth quarter.
Also, the average number of trades in January increased 30% from the fourth quarter.
So with the increase in January activity, and today's successful launch of INET, we are certainly off to a good start.
Now turning to the US.
In our options markets, the combined share of our two markets grew to 22% from 20% in third quarter of 2009.
With volumes growing 8%.
Part of the increase in share gains was volume related to dividend captured trades, activity that yields us a lower average fee per contract.
As a result, total revenues declined modestly when compared to third quarter of 2009.
In US cash equities, while we saw industry volumes decline in the fourth quarter by 12%, when compared to the third quarter 2009 levels, the combined market share of NASDAQ and BX increased, reaching 24%, up from 22% in the third quarter.
In January, after a slow start, volumes and market share bounced back to levels consistent with those realized at the beginning of the fourth quarter, and so far February is looking even better.
In particular, last week.
Additionally, consistent with the guidance we provided during our call last quarter, our average net fee per matched share increased 30% from the third quarter, following adjustments to our fee structure for BX in September and NASDAQ in November.
In access services, again, consistent with our guidance, revenues increased to $39 million, up from $36 million in the third quarter of 2009.
Reflecting the continued shift in our business model to one that includes increasing fee-based revenues.
In issuer services, our business welcomed 143 new listings during 2009.
There were 67 in the fourth quarter alone.
Of these new listing, 33 were Chinese companies, NASDAQ now has 124 Chinese company listings, more than any other US exchange.
Included in the new listing for 2009 were 34IPOs.
31 of which came to market in the second half of the year.
During the fourth quarter, we witnessed a remarkable performance by our team.
10 companies switched their listing from markets that comprise NYSE Euronext.
In 2009, a total of 24 companies decided to switch to NASDAQ, including 10 from NYSE and 14 from NYSE-AMEX.
Collectively, these companies represent more than $150 billion in global market capitalization.
Corporate services continues to do well as a competitive advantages offered by these products are increasingly driving listing decisions.
Specifically, Pinpoint Market Intelligence, our stock surveillance group, has witnessed growth of clients of nearly 60% from the prior year and 10% from the third quarter of 2009.
In market technology, we had had one of the strongest periods in the fourth quarter of 2009.
While part of the strength is driven by seasonally higher fourth quarter activity, the market technology business is sound and is growing.
Order intake for the quarter grew to $148 million, representing an increase of more than five times from fourth quarter 2008 levels and up four fold from the third quarter.
Total order value, which represents contracts signed but yet to be delivered, while consistent with prior year levels, increased 30% from the third quarter 2009.
And as we enter 2010, we see continued strength in the business following the recent contract wins of Osaka Stock Exchange and the Kuwait Stock Exchange.
We're confident that customers will increasingly recognize the value of our technology solutions and we believe we'll see additional announcements regarding contracts for GENIUM INET in 2010.
Now let me review the status of some of our initiatives.
On January 12th, together with Nord Pool Spot, we launched our power market in the UK with the goal of establishing a liquid market and transparent price for the industry.
As the reference price is established on a spot market, it will then be used as the basis for derivatives scheduled to launch later this year.
Following the launch, the spot auction and forward markets have functioned well, with prices having been set for each and every hour, 24 hours a day, since we began trading.
We continue to have strong industry support and remain excited about the prospects for this business.
Another exciting development is the completion of the first cross-border merger of clearing houses, with the combination of Nord Pool and Nordic Clearing Houses.
This integration delivers on the promise of the Nord Pool acquisition, as it creates a clearing house to meet the demands of customers trading in multiple asset classes.
In 2010, we plan to drive growth by leveraging our clearing expertise and scalable technology to deliver enhanced services across financial derivatives and commodity products.
As we launch our UK power derivatives market, those same benefits will be available to an expanding membership.
Here in the US, we remain on track to launch a new price size trading platform using the FILL X exchange license, which we intend to launch in May, pending SEC approval.
This new market structure will enable clients to execute larger orders in a lit market environment by providing execution priorities based on the size of the entering order.
We'll also leverage the scale of our existing technology to introduce new functionality to our customers, and truly is another example of how we continue to look for opportunities to be innovative and create value.
In December, we signed a commercial contract with BM&F Bovespa regarding global distribution of market data and the provisioning of NASDAQ OMX products and corporate services to public companies in Brazil.
NASDAQ OMX also announced plans to develop a communications system to facilitate the routing of orders between participating brokers located in the United States and brokers located in Brazil.
This is subject to required regulatory approvals and other conditions.
Now turning to IDCG, our interest rate swap clearing business.
In December, the House of Representatives passed financial reform legislation that mandates central clearing for standardized OTC contracts.
As this reform bill moves through the Senate, we applaud the efforts of Washington introduce sensible regulation designed to increase transparency.
The overall debate on regulatory reform has been robust with a clear recognition in Congress and the regulators that transparent markets are a valuable and important element of creating sustained financial stability.
With respect to IDCG, we continue to work intensely with clients the to integrate our offerings into their work flow, and as I said before, progress in this venture will accelerate as more certainty of financial legislation develops.
Gauging the positive feedback from clients, we continue to have confidence in the strengths of our unique offerings.
With respect to regulatory developments, as we consider the broader regulatory landscape, both with the legislative debate on regulatory reform and the SEC's concept release on market structure reform, we are pleased to see an active and healthy debate on these topics as they impact not only our industry, but investors across the country.
We truly believe in the value of debating substantial matters that are fundamental to our financial system.
As passionate supporters of transparent markets, given that it is fundamental to who we are as a Company and as a regulator, we trust that Congress and the SEC will find solutions that foster competitive, transparent markets with open and fair price discovery for the benefit of all market participants and investors.
Now, looking back on the past year, we experienced some of the most difficult recessions of our lifetime.
Entering 2009, we had to face challenges such as a dearth of IPOs, shrinking industry employment and a credit crisis that threatened businesses for all our customers, and yet as we exit the year, we are very proud of the resilient nature of the NASDAQ OMX business model.
In the face of economic upheaval, we achieved some important accomplishments that.
We launched BX, a new trading venue, which is now a meaningful contributor to our strategy and our earnings.
We found new pockets of market data users increasing the distribution of our US proprietary data products.
We completed the integration of FILL X, as promised, with the implementation of the INET system for all of our US options trading.
We completed the first cross border regulatory merger of two clearing houses with Nord Pool and our Nordic Clearing House, while welcoming 34 new London-based members.
We continue to find ourselves to be the natural strategic technology partner to some of the largest exchanges in the world, as the Tokyo commodity exchange went live on our platform and two additional leading exchanges, the Kuwait Exchange and the Osaka Exchange signed on as new clients.
Finally, both rating agencies upgraded NASDAQ OMX debt ratings, validating the resiliency of our business model and the expense and capital discipline of our organization.
Looking into 2010, we are experiencing some strong tail winds in our core businesses, including a strong IPO pipeline, growing employment in the financial industry, as both Morgan Stanley and Banc of America-Merrill Lynch announced plans for new hirings, strong US and European trading market share, improving volumes in value traded in Europe and extremely healthy order intake from market technology.
Additionally, as I stated earlier, we continue to make significant progress in delivering incremental growth through new initiatives.
We are enthusiastic about our prospects for 2010 and look forward to delivering on that enthusiasm through results.
With that, I'll turn the call over to Adena.
Adena Friedman - EVP, CFO
Thank you very much, Bob and good morning everyone.
Thanks for joining us today.
This morning, we reported that net income attributable to NASDAQ OMX for the fourth quarter on a GAAP basis was $43 million, or $0.20 per diluted share.
The GAAP results include an impairment charge of $51 million related to our investments in Dubai and Agora-X, net of tax.
$16 million in pretax expenses related to occupancy sublease reserves, workforce reductions and other nonrecurring items and $12 million of pretax gains on the sale of certain businesses.
Excluding these items, our non-GAAP net income for the fourth quarter of 2009 was $99 million, or $0.46 per diluted share, an increase when compared to non-GAAP net income of $89 million or $0.42 per share in the third quarter of 2009, but a decrease when compared to the non-GAAP net income of $110 million or $0.52 per diluted share for the fourth quarter of 2008.
As you can see on slide six of our presentation, the impact to non-GAAP diluted EPS was $0.01 when compared to non-GAAP EPS on the third quarter of 2009 of $0.02 in terms of FX rates.
I'm sorry, $0.02 when compared to the fourth quarter of 2008, when you're looking at the impact of FX rates on our results.
Reconciliations of GAAP to non-GAAP results can be found in the attachments to our press release and in the presentation that's available on our website at IR.NASDAQOMX.com.
Consistent with our prior calls, the remainder of my clients will address our non-GAAP results unless I note otherwise.
Net exchange revenues were $369 million, an increase of $20 million or 6% when compared to the third quarter of 2009, but a decrease of 8% when compared to the prior year quarter.
US cash equities revenues were higher when compared to the third quarter of 2009, due to a 30% increase in the average fee per matched share which resulted from the introduction of revised fees for BX in early September and NASDAQ in early November.
European cash equity trading revenue declined slightly when compared to the third quarter of 2009.
This modest decline is due to lower value traded which declined to EUR139 billion from EUR141 billion in Q3 2009.
Also contributing to the decline are fee changes that were introduced with the implementation of central counter party clearing during the fourth quarter of 2009.
Derivative revenues were $57 million in Q4 2009, versus $54 million in Q3 2009.
Driving the increase when compared to the third quarter are derivative revenues in Europe, which were $26 million, up from $20 million in the third quarter.
This increase is primarily relate Todd the growth in cleared energy products and the transfer of derivative volume from EDX to NASDAQ OMX.
Also contributing to growth in revenues is a partnership with broker dealers to launch a retail oriented trading platform called the Order Machine or TOM.
In our continuing efforts to improve the transparency of our revenue model, beginning this quarter I will provide additional details by product group for our European derivatives revenue.
Additionally our goal in the first quarter is to begin providing daily volume information on our website.
Total revenue in the fourth quarter of 2009 from cleared energy and carbon products was $10 million.
Trading and clearing of stock and indexed derivatives contributed $8.4 million.
Revenue from clearing of fixed income products was $4 million.
And TOM revenue and other fees were $4 million.
In the US market, net derivatives revenues were $31 million in the fourth quarter, representing a decline when compared to $34 million in the third quarter.
Despite an increase in market share across FILL X and the NASDAQ options market in the fourth quarter, the decline when compared to the prior period is due to reductions in the average net fee per contract which is primarily the result of a higher level of dividend capture trades in December, which command a lower fee.
As we guided on the third quarter call, access service revenues were $39 million for the fourth quarter, up from $36 million in the third quarter.
Driving the increase are revised fees and growth in demand for colocation services.
Market data revenues were $83 million for the fourth quarter, up $4 million when compared to the third quarter of 2009.
The increase when compared to the third quarter is due to higher NASDAQ and BX trading and quoting market share and continued growth in our US proprietary products.
Broker services was $6 million in the fourth quarter, down $3 million from the third quarter, but the decline is primarily due to the sale of our UK broker services business.
In Q4 2009, we recognized approximately $1 million from our UK broker services business, versus $3 million in Q3.
Issuer revenues were $82 million for the quarter, an increase of $1 million or 1% from the prior quarter.
Somewhat offsetting this increase is a reduction due to the fourth quarter sale of Carpenter Moore, the insurance brokerage business.
Revenue from Carpenter Moore was $1 million in the fourth quarter, down from $3 million in the third quarter of 2009.
The revenue increase in issuer services when compared to the third quarter of 2009 is primarily due to our continued growth in the corporate services business, as well as higher market capitalization values for European listed equities, which in turn results in higher European listing fees.
As Bob mentioned, the market technology business had a great quarter, with revenues at $44 million, up $8 million or 22% when compared to the third quarter of 2009.
These robust results are partly related to the seasonal nature of this business as well as to increases in deliveries of short-term technology contracts.
The market technology business revenue is derived by both large implementation projects, where in accordance with US GAAP, a portion of the revenue is amortized over the life of the agreement, as well as shorter term -- shorter duration enhancement projects where the revenue is recognized immediately upon delivery.
Therefore, there can be some lumpiness to the revenues on a quarterly basis for the market technology business, depending upon the mix of deliveries of large implementations and small enhancements and in fourth quarter we were the beneficiary of an increase in demand for short-term projects.
Now turning to expenses.
For the fourth quarter, spending was $204 million, representing an increase of $7 million or 4% from the third quarter of 2009, primarily due to an increase in compensation expense, and a seasonal increase in our advertising spend.
When comparing expenses for the full year of 2009 to 2008, we were very successful in maintaining our expense control discipline.
On slide 12 of the presentation, you can see that for the year, we reduced our core spending by $136 million or 14% from 2008.
Operating income for the fourth quarter was $165 million, with operating margins coming in at 45%.
During the fourth quarter, we agreed to increase our ownership interest in Agora-X, a joint venture between NASDAQ OMX and SE Stone that provides electronic trading of OTC commodities, primarily energy derivatives.
We now have an 85% ownership in the Agora-X, up from 20% in prior periods and we'll start to consolidate results of this business into our financials in 2010.
Because the most recent valuation of this business was lower than the original valuation made at the time of our initial investment, we are taking an impairment on the carrying value of $5 million.
Also during the quarter, we signed a binding term sheet with Borse Dubai, and the Dubai Financial Market, or DFM, to convert our 33.33% interest in NASDAQ Dubai, a small international exchange, into a 1% stake in DFM, which is one of the most successful publicly traded exchanges in the Middle East.
DFM is buying our interest as well as Borse Dubai's interest in NASDAQ Dubai, in order to take 100% ownership of the Company.
NASDAQ Dubai will continue to be operated as a separate subsidiary of DFM, independently regulated by the Dubai FFA.
Also, we will continue to maintain a seat on the NASDAQ Dubai board.
As a result of this change in ownership, we took an impairment charge in our investment in NASDAQ Dubai.
Specifically, our original investment included $50 million of cash as well as binding license agreements for our brand and technology.
Therefore, the combined carrying value of our original investment at the time of this latest transaction was $120 million.
Based upon and consistent with a third party valuation of NASDAQ Dubai, we have accepted a 1% stake in DFM and associated with this transaction, we have recorded a non-cash impairment charge of $82 million, which net of taxes is $46 million.
Net interest expense in the fourth quarter was $22 million, down $1 million from the third quarter of 2009.
Total interest expense in the fourth quarter of 2009 was $25 million.
And is comprised of $15 million in interest expense, $3 million of non-cash expense associated with the accretion of the 2.5% convertible notes, $3 million in non-cash deal amortization expenses and $4 million in other related fees.
As shown on slide 13 of the earnings presentation, subsequent to year-end, we refinanced our existing debt by completing a $1 billion underwritten public offering of five year senior secured notes at 4% interest, and 10 year senior unsecured notes at 5.55% interest and we entered into new senior unsecured credit facilities providing for up to $950 million in borrowings, including $700 million in funded term loans at a rate of LIBOR plus 200 basis points and $250 million in unfunded credit commitments.
The refinancing provides increased flexibility regarding the use of free cash, extends the maturity debt of our debt obligations, and reduces our interest rate risk.
Additionally, NASDAQ's corporate debt ratings were recently upgraded by both Standard and Poor's to BBB and Moody's to BAA3.
The ratings now reflect an investment grade profile from both agencies.
As a result of this refinancing, we expect to recognize a non-cash charge of approximately $30 million in the first quarter of 2010, related to the acceleration of deal costs from the original term loan.
In addition, we expect to realize a loss of approximately $10 million due to terminating an interest rate swap contract that was used to hedge our interest rate exposure for the original term loan.
Finally, our interest expense for 2010 will include approximately $6 million in non-cash amortized deal expenses associated with the new debt, will also continue to include approximately $14 million in non-cash accretion expense associated with the 2.5% convertible notes and approximately $6 million in other fees and expenses.
And finally, on the income statement, the effective tax rate for Q4 2009 was 32%, within the range of our normalized tax rate of 32 to 34%.
Now turning briefly to the balance sheet, cash and cash equivalents and financial investments at quarter end were approximately $1 billion.
Of this amount, approximately $469 million is reserved for regulatory requirements.
For the full year of 2009, cash flow from operations was approximately $582 million,(Sic-see presentation slides) with capital spending of $59 million, $13 million of which came in the fourth quarter.
Our total debt obligations at the end of 2009 were $2.1 billion, reflecting decline in the total principal amount of our debt of $432 million from the 2008 year-end.
The new term loan requires us to begin paying down the debt at $35 million per quarter, beginning in the third quarter of 2010, although we expect to overdeliver on that amortization schedule.
Now looking forward, for the full year of 2010, we expect total expenses will be in the range of $865 million to $885 million, at current FX rates.
Included in these figures are approximately $50 million of nonrecurring expenses including those associated with the recent debt refinancing I mentioned earlier.
Also included in this guidance is $54 million in discretionary R&D spending for new initiatives, slightly above the 2009 spending of $51 million in new initiatives.
In conclusion, in 2009 we continued our intense focus on controlling expenses and managing the balance sheet.
We continue to drive down core operating costs and exit non-core businesses and investments, providing us the opportunity to pursue new growth initiatives in a disciplined manner while improving our cash position.
To enhance our financial flexibility and lower our debt commitments we converted several of these notes, reduced our other debt obligations by over $330 million, and ultimately refinanced our term loan to put us in a much improved financial position.
Due to our financial discipline in 2009, as we enter 2010, we are now well-positioned to take advantage of positive trends in our core businesses, as well as progress in our new initiatives to drive earnings growth for our shareholders.
Thank you, and I will now turn it back over to Vince.
Vince Palmiere - VP IR
Thank you.
Operator, at this time, we're ready to take questions.
Operator
Thank you.
(Operator Instructions).
We're going to pause for just a moment to give everyone an opportunity to signal.
We'll take our first question from Dan Fannon at Jefferies.
Dan Fannon - Analyst
Good morning.
Bob Greifeld - Chairman, CEO
How we doing, Dan?
Dan Fannon - Analyst
Good, thank you.
Bob, you've historically kind of mapped out what you think the revenue opportunities are for some of your new initiatives and kind of ranked them, I think last call you mentioned ICDG as being the biggest.
Just wanted to get an update.
You still have several things out there that you're working on, what you think has the biggest opportunity, both near term as well as long-term in terms of your initiatives?
Bob Greifeld - Chairman, CEO
Well, we certainly believe that the interest rate swap market is the largest untapped market for us to try and gain traction in.
And our feeling is it's almost hard to comprehend in 2010 that a market that large really doesn't have any basic organization to it.
So that stands alone.
Many good things going on here.
I would certainly direct you to the UK power market, where as I said in my prepared comments, the spot market is at this point very successful.
The large opportunity for us is in the derivatives market, and it's our goal to have that derivatives market launched sometime in the spring.
So we're optimistic about that.
We are certainly excited about what a price size market can mean.
It's hard for us to quantify that in any meaningful way at this point in time.
We also have to get regulatory approval for that effort.
So I would say just a number of good things going on here and they have different dimensions to them.
Size led by IDCG, I think immediacy by UK Power, but like any of these investments you make, you never know which one's going to win at the end of the fourth quarter.
Dan Fannon - Analyst
Okay.
And then with regards to your MTF in Europe, can you give us some color as to what you think has been the challenge there for you in terms of gaining market share in a meaningful way, as some people have -- if it was just a first mover advantage with some of the upstarts or what you guys think you need to do to get that going.
Bob Greifeld - Chairman, CEO
I think you need to have basic and fundamental deal support for your MTF and for us to get the higher levels of success in that market, we're going to have to be that much closer to our customers.
Dan Fannon - Analyst
And so have you done any -- are you doing things now to -- initiatives or programs to kind of get that going?
Bob Greifeld - Chairman, CEO
Yes.
I mean, when you certainly recognize the problem being that you have to have the dealer support, and that support has to come in some basic and fundamental way.
We're working hard at making that happen.
Dan Fannon - Analyst
Okay.
Thank you.
Operator
We'll take our next question from Rich Repetto at Sandler O'Neill.
Rich Repetto - Analyst
Good morning.
First, congrats on the upward trend in revenue captured equities.
You broke the trend.
Bob Greifeld - Chairman, CEO
That we did.
We did.
We're also happy with the $0.46 a share.
That was a good trend reversal.
Rich Repetto - Analyst
Exactly.
I guess first question is on the balance sheet and the debt restructuring and with the restructuring, can you talk a little bit about the flexibility in regards to -- what your capital management strategy and the flexibility or not you get in regards to acquisitions, buybacks and dividends?
Adena Friedman - EVP, CFO
So, hey, Rich.
For the first time in two years, we do have financial flexibility in terms of how we use our existing cash and how we can continue to use debt as a means for us to grow.
So I think that the new term loan does give us the flexibility to use cash, use our cash to buy back shares or pay dividends as well as do acquisitions and investments and we also have the ability to increase our debt to take on acquisitions if we would like.
So that's one of the main focuses of the refinancing was to kind of give us that new flexibility.
Bob Greifeld - Chairman, CEO
Well, the other thing I would say, Rich, is we recognize that we're not a bank.
We have a large amount of excess cash on the balance sheet today.
You're keenly aware that this business model generates a lot of cash and that number will obviously increase then as 2010 waxes on.
So I think it's definitely a consideration of the management and the Board of Directors at NASDAQ OMX in terms of how to best deploy that capital and it's something that we'll be thinking about in the weeks and months to come.
Rich Repetto - Analyst
Okay.
And then the follow-up question is on expenses.
Normally there's been an associated drop in technology expenses, actually people as well, with the consolidation of the platforms and we know INET and now you said whatever seven or eight Nordic.
I guess the question is is there any expense -- is this already in the run rate, because we see the modest uptick in overall year-over-year expense guidance but is there incremental expense savings from the platform consolidation?
Bob Greifeld - Chairman, CEO
Well, I would say this.
One, in terms of the move to the consolidated platform today, that obviously will result in some expense synergies within the context of NASDAQ OMX in the time to come.
But it's important to recognize that that's a smaller scale against a larger organization.
So when you look at the expense guidance today, it represents some decrease in expenses based upon the today.
But also there's other parts of the businesses where we have growth opportunities where there's necessarily some increases in expenses.
So that's how we net them out in the guidance that we gave.
Adena, you want to say anything?
Adena Friedman - EVP, CFO
That's exactly right.
We continue to drive efficiency in the operations, Rich and we do have that synergies associated with retiring when that happens this year but we also have other areas where we want to invest in our growth.
Rich Repetto - Analyst
Okay.
And very last quickly, you did touch a little bit on the regulatory landscape and how it looks promising.
I guess my specific question was your access service colocation revenues went up as you predicted.
What's been the demand of colocation, given the sort of increased visibility the SEC's brought on it.
Could you still see increases in revenues due to colocation?
Bob Greifeld - Chairman, CEO
Definitely, Rich.
I think the deliberations that the SEC and others are willing to take will have zero impact in terms of the business that we have in colocation access services and in a certain respect, increased regulation could be seen as a positive because clearly our colocation business is under the regulatory regime of the SEC.
They have complete and transparent insight into the business and I think they're aware that we run this as a fair access standard business, where we make sure that every single customer of ours is treated in the exact same manner and as we've spoken about before, we ensure that if somebody is 50 feet from the matching engine, they have an identical user experience to somebody who is 300 feet.
So there is a lot of pluses to how we run the colocation in terms of fairness, so we think that will be a positive for us in the days to come.
Rich Repetto - Analyst
Great.
That's all I have.
Thank you very much.
Bob Greifeld - Chairman, CEO
Thanks, Rich.
Operator
And we'll take our next question from Mike Vinciquerra at BMO Capital Markets.
Mike Vinciquerra - Analyst
Thanks very much.
I just want to go back to the new technology in the Nordic there.
Can you give us a difference for the speed differential between INET and the previous platform you had in place there.
Give us a sense for what traders are seeing in terms of increased performance.
Bob Greifeld - Chairman, CEO
Definitely.
As you know, they're getting the new version of INET in the Nordics.
We're down to about 250 micro seconds so it's about a 10-fold increase in speed in the environment.
And I think as important as the speed is the fact that we now have a common interface.
So our customers in the US, or customers in London can essentially do a plug and play into the Nordic marketplace today.
So we certainly expect to see increasing velocity coming on the heels of the go-live date today.
Mike Vinciquerra - Analyst
Great.
Now that you have that project out there, are you going to start looking at rolling INET out to your OMX technology customers to give them the same advantages.
Bob Greifeld - Chairman, CEO
Well, it's interesting.
I spoke of GENIUM INET and really this is one of the wonderful outcomes of the merger together.
So when you look at the INET technology, it is the best class at handling high volumes of relatively simple instruments.
The old OMX technology had the ability to process any variety of asset class, any variety of instrument.
So with the GENIUM project we're basically using the messaging layer of INET to deliver outstanding speed and combining that which was the application functionality that Click brought to the marketplace.
So I think you'll see the vast majority of our customers choose the GENIUM powered by INET platform.
Mike Vinciquerra - Analyst
Great.
Thank you.
And then just in the tech business unit, nice surge there of course in revenues.
Can you give us a sense for what the margins are in that business today and what a reasonable expectation would be going forward?
Bob Greifeld - Chairman, CEO
I'll let Adena take the second part.
I would say the margins are better than they've ever been.
It was a relatively low bar.
We've established a long-term goal for this business to get it in and around a 30% margin business which we think is reasonable for a technology business, not going to be the level of some of our other businesses, and I think today we're, what, in the mid-teens?
Adena Friedman - EVP, CFO
I think we actually ended the year probably closer to 20% on that business.
Mike Vinciquerra - Analyst
Okay.
Great.
Thank you.
Just finally, just on the option side, talked a bit about the growth in market share and of course you mentioned the dividend trading had an effect there.
Net revenue was actually down $3 million sequentially and I calculate you probably traded 16 million more contracts.
Was there anything besides the dividend trading that lowered your net capture in that business or is that the only driver there that changed things?
Bob Greifeld - Chairman, CEO
I don't want to say the only driver but it was the positive driver.
Whatever else happened was really not material.
It was the dividend trades.
Mike Vinciquerra - Analyst
Okay.
Thank you, guys.
Operator
We'll take our next question from Howard Chen at Credit Suisse.
Howard Chen - Analyst
Good morning, Bob and Adena.
Bob Greifeld - Chairman, CEO
How we doing?
Howard Chen - Analyst
Good, thanks.
Happy birthday to the exchange.
Bob Greifeld - Chairman, CEO
Yes.
We're going to be perpetual 39 now.
This is it.
Howard Chen - Analyst
Then you start counting backwards.
I just had a question specifically about the rule and proposal to curb proprietary trading.
How you think about the contribution to your business or overall market volumes that's driven from sell side profit trading operations.
Bob Greifeld - Chairman, CEO
That's a great question.
It's kind of impossible for us to answer because we don't have the orders coming in, delineated between proprietary and non-prop.
In a sense, that shows you the difficulty that the legislators would have prescribing anti-prop trading.
I think that's a hard job for them to do because once you get into what's prop, what's customer facilitation, what's riskless principle, it gets impossible.
So I think they would have to find a different path to go would be my personal feeling.
So we certainly see our customer business, primarily focused on serving the buy side institutional efforts and we certainly don't think that will be impacted by whatever comes out of Washington.
Howard Chen - Analyst
Okay.
And then switching gears, a follow-up on market technology and the really strong results.
Maybe could you provide us any sense of the composition of the order intake and the big backlog improvement, I don't know if it's whether geographic or newer versus legacy customers and how reliable do you think those figures are as we think about the trajectory of that growth going forward?
Bob Greifeld - Chairman, CEO
I'll start and then I'll let Adena finish.
One is when you look at 2010, in market technology, the success was driven by I think a multitude of smaller projects and that has a way of hitting the income statement sooner rather than later.
So when we look across our broad range of customers, we did I think good business with a vast majority of them in 2009.
I think 2010 is going to be characterized by large amounts of business with a smaller subset of our customer base.
Adena Friedman - EVP, CFO
I think we look at the fact that we've got Osaka and Kuwait coming on.
We also have some larger enhancement initiatives that we hope to achieve in 2010.
And those can have some level of delay in terms of revenue recognition, since with US GAAP you have to wait until you've delivered and the customer's accepted the enhancement.
But at the same time, we do get continuous requests from our clients to do small enhancements.
We call them client requests, CRs, and we continue to see a very healthy number of those coming in.
But sometimes we don't -- they're less easy to predict because as they go through the year, they might need a small enhancement that needs to get done.
So you kind of have layered on top of each other some larger implementations as Bob said in 2010, along with just a continuous request for enhancements coming from our clients.
So it's very good, the numbers that we provided you are in fact as we said committed, just not delivered, and that means that the revenue will be coming forward as we go through the implementation is completed.
Bob Greifeld - Chairman, CEO
The general comment I will make is that the technology we provide to our fellow exchanges is fundamental to their success.
We provide the central matching engine.
We provide the core clearing technology.
So in that environment, there is always things to be done with our customer base.
And I think we've become increasingly effective at providing those services and that helped drive our 2009 results.
Adena Friedman - EVP, CFO
I just want to finalize by saying one thing about market tech, though.
We're spending a lot more time with our clients looking at a more holistic view of their exchange in terms of how we can be a strategic partner for them with technology as the foundation.
So with some of our clients, they are looking at our corporate services and how they can deploy those to issuers.
They're looking at how we can leverage the global market data distribution and broaden their distribution market data.
And there are other partnership opportunities are going to come.
Those will also help bring in revenue, probably more through a revenue sharing or what I would call shared risk model.
Howard Chen - Analyst
That's all really helpful and makes a lot of sense to me.
Finally, was hoping you could provide a bit more detail about the $54 million of discretionary spending, where is it heading in 2010, and maybe help us frame how you gauge the payoff from the $50 million-ish you spoke to spending in 2009, acknowledging a lot of that was longer term kind of growth initiative in nature.
Bob Greifeld - Chairman, CEO
I would say this.
With these initiatives, it's very important for us to know when to move on from the initiatives, so we have I think a very good cross-functional management process to make sure everything we do is evaluated.
We also take an initiative away from this category when it has been profitable for a period of quarters.
So as we look at 2010, obviously BX and NOM move from the new initiative category to part of our core operations in terms of how we manage it.
So there's always more demand for investment dollars than we have supply, which I think is a healthy dynamic within the organization.
With respect to the new initiatives, some of them are small, some medium, some large.
We tend to highlight the large ones on the call, those that have a bigger claim on the balance sheet, the two biggest effort right now with respect to dollars are IDCG and Neuro.
But they're just one of a number of new initiatives.
So I'm not sure what your question was anymore.
Howard Chen - Analyst
That's okay.
Thanks.
Happy birthday again.
Bob Greifeld - Chairman, CEO
Thank you.
Operator
And we'll take our next question from Roger Freeman at Barclays Capital.
Roger Freeman - Analyst
Hey, good morning.
Bob Greifeld - Chairman, CEO
How you doing, Roger?
Roger Freeman - Analyst
Okay, thanks.
So I guess coming back to Neuro, Bob, sounds like you're sort of refocusing on the dealer front to get support.
Dealer support's been sort of a hallmark of your new initiatives.
I guess is it that the opportunity has changed where you can get dealer support now where you couldn't before with Turquoise or have you really sort of changed attacks with respect to how you're approaching it?
Bob Greifeld - Chairman, CEO
I think both factors are coming into line for us.
Clearly, we led with low pricing and with a smart order router and with the benefits of hindsight we probably would have led with a consortium-based effort.
So I think in terms of our mental evolution, combined with other things that are going on in the market, it seems to be an opportune time for us to do something a little bit differently.
Roger Freeman - Analyst
Okay.
And then I guess probably be sort of tied in here, but as you look at the increased flexibility that you've got now under the credit agreements, number one, did they previously hamper any strategic initiative that you would have undertaken?
Bob Greifeld - Chairman, CEO
I would say no, Roger, but they probably would have.
Let's take credit for what we accomplish in 2009.
We completed the integration of Philly.
We completed the integration of Nordic, in particular the clearing houses, and certainly came to the end of our NASDAQ OMX integration, highlighted by the achievements today.
And as we said to everybody before, we always build upon a solid platform and we wanted to make sure that operationally we were integrated before we would contemplate doing anything larger.
So I think the timing worked out well where we are now able to declare victory with respect to the acquisitions we have done.
We have delivered to our investors and to our customers what we have promised, and now through the actions of our financial staff, we have that kind of flexibility.
So it puts us into a different place.
Roger Freeman - Analyst
I was just sort of getting at it from an acquisition perspective.
One of the things you hinted at was you thought you would be in a position to consolidate over in Europe.
You haven't done anything yet, and there was obviously a lot on your plate.
It hasn't been the financial flexibility.
Bob Greifeld - Chairman, CEO
No.
We certainly had a lot to accomplish in 2009 which we've done.
If we didn't do what we did on the refinancing, then certainly in 2010 it would have been a barrier.
Roger Freeman - Analyst
Okay.
Then just last question, just looking at back in the US, market share, December and January we saw some reversal of the strong share gains over the course of the fall, internalization was up, a couple of your smaller competitors were gaining again.
Can you just sort of talk to some of the dynamics there.
Bob Greifeld - Chairman, CEO
I would direct you to the fact that we certainly have made progress in the latter part of January, certainly more progress again in February.
So I would attribute this, Roger, more to the ebb and flow.
We're happy with the share gains in the fourth quarter.
We're happy with what we've done now in the first quarter.
And as you know, we live in a time where we still have stocks, individual stocks that can drive market share and depending upon how you're positioned in that stock at that moment in time, it's either a plus or a minus.
So in the grand scheme of the market share battles, I think it's just noise and we feel happy with our progress.
Roger Freeman - Analyst
Okay.
Great, thanks.
Operator
We'll take our next question from David Grossman at Thomas Weisel.
David Grossman - Analyst
Good morning and thanks.
Seems like there were a lot of moving pieces in the fourth quarter, a lot of things actually reversing in your favor, I think access services with price increase, we changed the pricing structure in the US and the transfer from EDX to OMX.
Did you get a full quarter of benefit from that in the fourth quarter or should we continue of see some tailwinds at least on a run rate basis into the March quarter?
Adena Friedman - EVP, CFO
That's a great question.
In terms of the changes in pricing on the US side, we did see a full quarter effect from the change in the BX pricing but two months of effect from the change in the NASDAQ pricing.
There could be a little bit of a pickup on that.
On EDX, most of the change, the move over to the Nordic trade to clearing house, came in December, actually the very end of November, up to December 7th.
So we really did not see a full quarter effect of that.
In fact, most of the members came right in at the very end.
Really starting trading and clearing in December.
So we should see more tailwinds coming from that initiative.
And then lastly, the access services side, we did see a full quarter effect.
That change of pricing was made in the middle of the third quarter.
Bob Greifeld - Chairman, CEO
And I would just add that we have seen a fairly dramatic uptick in the equity trading in the Nordics in the first quarter of 2010.
So that's been quite pleasant.
David Grossman - Analyst
Right, right.
And one other thing, maybe for you, Bob, on the pricing side.
Obviously you took the move in the fourth quarter and your share really was relatively stable, if not improving modestly after that change.
Is your gut feeling that we've gotten to a point where pricing is really stabilized in the US?
Bob Greifeld - Chairman, CEO
Well, I think I've said in previous calls that the pricing battles are more around the edges, where we all recognize that we have customers across a wide spectrum who have different initiatives and goals through our pricing actions.
And you have to decide through your pricing actions which subset of your customers you choose to attract.
And every action you take has an equal and opposite reaction and then you have to gauge kind of the net effect.
So when I look at the pricing actions in 2009, and what's contemplated in 2010 is more of the to and froing around which subset of customers you're trying to get and it's a fundamentally different game than what existed in 2007 when it was net wholesale reductions across a wide range of customers.
David Grossman - Analyst
Okay.
Very good.
Thank you.
Operator
And we'll take our next question from Niamh Alexander with KBW.
Niamh Alexander - Analyst
Thanks for taking my questions.
Just as a second consecutive quarter now where your derivatives, net revenues exceeded your cash with which congrats to you guys on the diversification.
Bob can I just ask if you take a step back for the options industry, how should we think about NASDAQ taking leadership there with trade changes.
Because we've got the bifurcated pricing structure, you've got both models right now.
Is now a good time to think about maybe moving the Philly on to the make or take model, especially with the high frequency volumes starting to pick up.
Bob Greifeld - Chairman, CEO
I was concerned you might find bad news in the fact our derivative revenue's doing so well but I'm glad you haven't.
We're proud of that.
And your question leads right into as you're obviously aware of what we did in January with the prorater, make or take program, with Philly.
And we started it with the spiders and in November we had about 7%, 7.6% market share.
In January, it shot up to 21.1%, and in February, it's running at 21.5%.
So clearly this is probably the first hybrid market structure that has worked and it's worked from the get-go in a dramatic way.
So we're learning from that.
And again, we're breeding a culture of innovation in NASDAQ OMX and this is clearly indication of that.
And we're proud of it.
And we rolled it out to a couple options in February and we've seen also dramatic changes with queues.
We went from 16% to 26 just from the beginning of the month so we're proud of that.
We're on to that and we certainly intend to take a leadership role in leveraging the strengths of the dealer market, combining it with the maker taker.
Niamh Alexander - Analyst
That's helpful.
Thanks, Bob.
Just help had me understand.
I assume the maker taker is typically more lucrative for an exchange.
What would be the objection or what would be the impediment shall we say to do a more aggressive transfer.
Is the risk that you loose lose the customer volume.
Bob Greifeld - Chairman, CEO
I would not agree with your premise that it's more lucrative.
It really depends.
I think in the options world, the maker taker is lucrative but I don't mean to any way point any negative comments on the dealer centric model there.
So we play with both.
It's really a question, what does the customer want, what can you do to leverage your existing platform.
So we're focused on that.
And when you look at the pro rata maker taker that we rolled out, it did have capabilities in that plan to make sure it retained its attractiveness to retail order flow.
Niamh Alexander - Analyst
Okay.
That's helpful, Bob.
Thank you very much.
Then just if I could real quick, I know you like to lever the mother ship when we talk about nonorganic growth but if you could update there in terms of how are we still thinking about putting new products on the existing platform or should we maybe think about NASDAQ expanding into kind of new services as it were, maybe some more horizontal integration.
Bob Greifeld - Chairman, CEO
Some more what, horizontal.
Niamh Alexander - Analyst
New kinds of services instead of just products as we say on the platform.
Bob Greifeld - Chairman, CEO
Well, let me talk about our listing business for a second.
I think we've led the world in providing additional services to our listed companies and you see that those -- that provision of services is one driving revenue growth for us, increasingly driving profit growth and also driving switches.
When you look at the number of companies that switched from competing exchanges to NASDAQ OMX, the provision of services directly from us has been a key differentiator.
So we want to continue with meeting our customer needs, continuing to drive our revenue growth in that business, and I think you'll see us intensify our effort in that area in the time to come.
And we think that's just a wonderful growth opportunity.
We have this privileged relationship with 4,000 listed companies.
It's our job to make sure that we, one, provide services and lever that distribution channel.
Niamh Alexander - Analyst
Just lastly if I could clarify real quick.
With respect to the expense guidance, there was just over $30 million, $35 million related to the debt retirement.
Would that be kind of the the one-time in the first quarter?
Adena Friedman - EVP, CFO
Actually, it's closer to $40 million because it was $30 million associated with accelerating the the fee percentage.
Closer to 40 on related to that particular transaction.
And then the other $10 million or so is really related to continued efforts in the technology area to become more efficient and as we do that, we're going to have some one-times associated with that effort throughout the year.
So that's pretty much what comprises the full $50 million.
Niamh Alexander - Analyst
Okay.
That's helpful.
Thanks.
With respect to the debt, would most of that hit in the first quarter.
Adena Friedman - EVP, CFO
It will all be in the first quarter.
Niamh Alexander - Analyst
Thanks very much.
Operator
We'll take our next question from [Ed Demeyer at McGuire].
Ed Demeyer - Analyst
Good morning, guys.
Quick question, is there anything discrete that might be keeping you guys from doing a stock buyback, such as being loathe to take on more financial leverage after getting your debt upgrade or should we simply interpret the decision between buybacks, which seem like they would be highly accretive right now with the stock at nine times, versus M&A opportunities that of course could offer more upside?
Bob Greifeld - Chairman, CEO
Our stock's at nine times.
That seems mighty low, doesn't it?
But I would say this.
As I said before, we now have flexibility.
We have excessive cash on our balance sheet.
And we certainly recognize we're not a bank.
I think our Board of Directors recognizes that and it's for the Board to consider how to best allocate that capital.
And this is something that we will be focused on in the weeks and months to come.
Ed Demeyer - Analyst
There's no pre-existing buyback authorization?
Bob Greifeld - Chairman, CEO
No.
Ed Demeyer - Analyst
Okay.
Thanks, guys.
Operator
We'll take our next question from Celeste Brown at Morgan Stanley.
Celeste Brown - Analyst
Hi.
It's Celeste Brown.
I don't think I changed my name this morning.
Adena Friedman - EVP, CFO
Hi, Celeste, how are you.
Celeste Brown - Analyst
Good, how are you?
Coming back to Nordics, surprising on a positive front that you maintained your share on the equity side.
Can you help us think about competitive dynamics over the next 12 months, a lot of changes with clearing and INET launching today, do you expect to see more competition coming into that market as your competitors see the increased volumes, et cetera?
Bob Greifeld - Chairman, CEO
Well, let's say this.
As compared to a year ago, we are certainly significantly better positioned to compete.
So a year ago, we had an environment where the lack of CCP gave a fundamental advantage to MTS housed in London.
Today we have CCP.
A year ago we had a platform, while improved, was not competitive with other MTS.
Today, we have the fastest platform on the planet running our Nordic marketplace.
So we feel obviously very strong that we're in a position to grow this market in some fundamental ways.
We know our market is incredibly attractive to our US-based customers, now that we have essentially a plug and play capability.
And I think it's important to recognize the pricing action we took in the Nordics in January, and it was a new and creative response as an established exchange to the pending competition from MTS and other exchanges, and we allow people to essentially hit a max payment rate to us and this allows us to lock in to revenue that we had in 2009, and the ability to then grow that revenue based upon new entrants coming into the marketplace.
And that as I said is different.
We haven't seen it done by any established exchange before.
We think it will be surprisingly effective.
Celeste Brown - Analyst
Okay.
Sticking to the Nordics, again on the derivatives side, how tight do you think you have a grasp on the derivatives volumes that have moved over from EDX?
We've seen talk of competitors trying to step up their efforts in that market.
Do you feel like now that you've made the move, you've locked it or there's still some risk as the year progresses?
Bob Greifeld - Chairman, CEO
There's always risk.
But the greater risk was moving the volume away from EDX.
So we definitely feel proud of the fact that that volume essentially moved.
I won't say 100%, but certainly 99% of the volume has moved.
So there's always risk but on a scale, the risk is dramatically declined to where it was three and six months ago.
We will continue to stay close to our customers and make sure that we're delivering value to them.
And obviously they have recognized that by the wonderful success we had in December of 2009.
Celeste Brown - Analyst
Okay.
Bob Greifeld - Chairman, CEO
And I think it's important to recognize now with this EDX transition, we have essentially turned our Nordic clearing house into a European clearing house.
The new members, the 60% growth in membership, was driven not by new members from the Nordics but by European members coming in and they also requested us to make some changes to our clearing house practices that brought it more in line to what they're expecting in Europe and we have done that.
And so now this clearing house is positioned, we have the connectivity with the customer base and there's many ways we can lever this clearing house in the time to come.
Celeste Brown - Analyst
Okay.
Thank you.
Operator
And we'll take our next question from Bob Napoli at Piper Jaffray.
Bob Napoli - Analyst
Thank you and good morning.
Bob Greifeld - Chairman, CEO
How we doing, Bob?
Bob Napoli - Analyst
Very good, how are you?
Bob Greifeld - Chairman, CEO
All right.
Bob Napoli - Analyst
The question on just a follow-up on the US options business, it does -- what do you view the outlook for capture rates in the US options business as we move into 2010 and '11?
It does seem like the competitive battles are maybe ramping up somewhat there and I know you talked about the mix in the fourth quarter but I was wondering if you could give a little bit of an outlook, your best feel for capture rates.
Bob Greifeld - Chairman, CEO
Well, I would focus on the market structure first and foremost.
So it's a little bit different than the equity dynamic.
So the nature of the market structure and the participants who are engaged in your market structure in some ways are more important than your particular nominal rate on a transaction.
So we have to continue to deliver market structure, innovations and advancements that retains and increases our customer base.
So certainly with the pro rata make or taker model we put into Philly, we've done that.
We increased share.
We have some reduction in rate for those particular options, but clearly the overall revenue has increased dramatically.
So I think the option space is more nuanced than the equity space and allows I think a good management team the opportunity to execute very well.
Bob Napoli - Analyst
Thanks, Bob.
A question on the access services revenues and margin.
Can you remind me the pricing, how you price that business and what are the -- if you can give us some feel for the operating margins on the access services business.
Adena Friedman - EVP, CFO
Sure.
So on access services, it's purely a monthly fee, although we do allow people if they want to pay forward, essentially, and guarantee their covenants for a year, they can pay us a slightly reduced rate knowing that we have a year of revenue locked in.
But generally it's a monthly fee and it depends on the service.
So if they're getting just a port, just a fixed connection into our market, it's in the hundreds of dollars a month.
But if they're co-locating in our data center and putting servers in our data center, we call them cabinets, then they're paying us thousands of dollars a month to colocate their servers.
Some customers will have one server, some customers will have 25 servers, just depends on how much volume they're flowing into the marketplace.
Then they also pay for the market data that they're receiving as a distributor so they're paying the distributor fees for the market data that they're receiving as well.
It adds up to a few thousand dollars a month.
I think all of our rates are published so they're available for everyone to see and everyone pays the same but it is essentially monthly revenue.
In terms of margin, it's not dissimilar to the overall margins in Market Services.
We don't break out the access services margins but under the new contract with Verizon that we entered into late last year, we feel comfortable in saying that the margins on that are at least the same as what we get overall for Market Services.
Bob Napoli - Analyst
How much capacity do you have to grow that business as far as the colocation portion?
What kind of a revenue growth rate would you place on that business over the long run?
Adena Friedman - EVP, CFO
Well, in terms of capacity, we actually Verizon completed a build-out of the data center and we have the ability -- we actually have a further build-out later this year locked into our contract so that we have the ability to essentially I think we tripled the capacity of the data center associated with the build-out.
So we now have excess space and the ability to take in new demand from clients and I think that it's something that we expect to continue to grow in terms of demand and we're out there, actively selling space.
Bob Greifeld - Chairman, CEO
As we said a year ago, we had more demand than supply.
We have that in the right balance right now, where we have supply certainly for what would be the foreseeable future and the sales force is out there selling.
Bob Napoli - Analyst
Last question.
Just on the deal front, now that you do have more flexibility, was wondering if you just give a little color into what opportunities you see in the market.
I'm sure any time anything is available, that you guys are on the distribution list and I mean, is there a lot of activity going on in the market today?
Are there -- ?
Bob Greifeld - Chairman, CEO
Well, I like -- we're an automatic recipient of any deal and that's probably not that far from the truth.
But that being said, you know, in the environment you describe which we essentially agree with, the necessity of maintaining discipline is paramount and so we do that, we have our north star in terms of which guides us.
We have to be leveraging the mother ship.
It has to accrete within 12 months, very large deal can go slightly longer but not so much longer that you try to predict the future.
So that being said, there's definitely opportunities out there, things that we consider, but our discipline will always guide us.
Bob Napoli - Analyst
Thank you.
Operator
And we'll take our next question from Jonathan Casteleyn at Susquehanna.
Jonathan Casteleyn - Analyst
Thanks, good morning.
You mentioned starting the trading of your UK power business within the next six months.
How did that compare to your original scheduled time frame and is there any way to quantify the impact either in start-up costs or new earnings?
Bob Greifeld - Chairman, CEO
It's sooner than we originally thought, and the good news here is the uses in the marketplace, the spot market, are saying you need to go live sooner rather than later.
And at this point in time, it's our internal issues to be ready to go live, so we thought we had six months.
We have less time than that.
We're working hard to make it happen sooner.
That being said, we're not quantifying at this point what the revenues are.
We just know that the UK power market is roughly equivalent in size to the Nordic power market and you can see how large of an opportunity that is for us.
Adena Friedman - EVP, CFO
And I would say, Jonathan, that in terms of the the investment, it's really existing resources that we're using to build out this capability because it's obviously building on the strength of our know-how and expertise in the Nordic power market, so it's basically leveraging the systems and people we already have.
Bob Greifeld - Chairman, CEO
Right.
And the work we did to consolidate the clearing houses in 2009 provides the platform for us to now lever that to user for UK power.
That work's been done and it's not so much incremental expenditure, it's a question of what takes the priority.
We moved this up on the priority list with respect to our projects and obviously there's a cost on the downstream.
Some other things are not getting done.
Jonathan Casteleyn - Analyst
Any cost associated with the initiative are in the run rate guidance.
Bob Greifeld - Chairman, CEO
No doubt.
Jonathan Casteleyn - Analyst
Any sort of indication of their longer term intentions with the stock holding?
Bob Greifeld - Chairman, CEO
Well, as you know, we have representatives on their Board, they're actively engaged Board members and they have certainly communicated to us in no uncertain terms that they are long-term holders of their position in NASDAQ OMX.
Jonathan Casteleyn - Analyst
Understood.
Thank you very much.
Operator
And we'll take our next question from [Johannes Thorman at HSBC Global Bank].
Johannes Thorman - Analyst
Good morning, everybody.
One question.
You talked about your success in migrating business from EDX to your own strong Nordic platform and I mentioned also clearing.
What is your risk for this migration if competitor buys or majority stake at least in that platform?
Bob Greifeld - Chairman, CEO
Well, those two are not related.
So the EDX is our NASDAQ OMX branded license derivatives products.
EMCF was set up as a cash equity clearing house.
We currently own 22% of it.
At the time of the investment we made it very clear that we were not trying to create a vertical silo and we invited others, whether it be exchanges and/or MTFs to take an equity interest in EMCF.
Our goal is to create a competitive dynamic that drives down the cost of clearing in Europe.
That then has a secondary benefit of increasing the velocity of trading in the market.
Johannes Thorman - Analyst
Okay.
Thank you.
Operator
It appears we have no further questions at this time.
I'd like to turn the conference back over to you, Bob Greifeld with any additional or closing remarks.
Bob Greifeld - Chairman, CEO
I would like to say thanks to everybody for joining us here the Monday after the Super Bowl, on our 39th birthday.
We're certainly proud of the year we had in 2009 against difficult macroeconomic and microeconomic conditions.
It certainly I think shows the resiliency of our business model and we look forward to executing very well as we always do against a more promising environment in 2010, and look forward to speaking to you in three months' time.
So thank you.
Operator
And that does conclude today's conference.
Thank you for your participation today.