CHICAGO Feb 10 CME Group Inc, the largest U.S. futures exchange operator, said on Monday it will launch new interest rate swap futures contracts targeted at the European market.
CME, which owns the Chicago Mercantile Exchange, will begin trading Euro-denominated deliverable interest rate swap futures on April 14, pending approval from the U.S. Commodity Futures Trading Commission, the company said in a statement.
The Chicago-based exchange operator is banking on international growth to expand and plans to launch its first overseas exchange in London this year.
The Euro-denominated deliverable interest rate swap future "is designed to meet the needs of European financial market participants, including banks, hedge funds, asset managers and insurers," CME said in the statement. CME already has U.S. dollar-denominated deliverable interest rate swap futures.
"This product has the same economic exposure as an interest rate swap with the margin and liquidity benefits of a futures contract, and at expiration all open positions will deliver into a CME cleared euro interest rate swap," the company said.
Nomura and Societe Generale are among firms planning to serve as market markers for the new product, according to CME.
The contract "will help clients and the industry gain more efficient exposure to interest rates in a capital constrained world," said Mohamed Braham, deputy global head of rates at Societe Generale, in a statement.
The offering strengthens CME's position against rivals IntercontinentalExchange Group and Deutsche Boerse AG's Eurex, which both offer rate contracts targeted to the European market.
CME's planned London exchange also is part of its bid to better compete with European rivals, such as Deutsche Boerse . CME has said it intends to offer foreign-exchange and commodities contracts on the London-based market. The operation was set to start in September but has been delayed twice.