LONDON May 27 Deutsche Boerse's
Eurex, Europe's largest derivatives exchange, will launch a
range of new products later this year, as it seeks to fend off
competition from U.S. rivals and capitalise on new rules on
Eurex will offer futures and options contracts on six
currency pairs, including the euro-U.S. dollar and euro-Swiss
franc, from July 7, its head of product research and development
Mehtap Dinc said on a conference call with reporters on Tuesday.
The exchange, which currently dominates long-term interest
rate derivatives, will also expand its interest rate products
starting in September to cover the entire European interest rate
curve, Dinc said.
Exchanges have been seeking to take advantage of a
regulatory shift requiring more derivatives-like interest rate
swaps and credit default swaps - previously bought and sold
through dealers - to be traded on electronic platforms, cleared
through central counterparties and recorded. The aim is to
improve transparency and lower risk.
Nasdaq OMX launched NLX, a London-based market that
allows trading in a range of short- and long-term interest rate,
euro and sterling-denominated derivative products, a year ago.
IntercontinentalExchange acquired Liffe, Europe's
second-largest derivatives market and leader in short-term
interest rate contracts, in a $11 billion takeover of NYSE
Euronext last year.
CME Group's European derivatives exchange opened
last month, providing trading in 30 FX futures and a range of
commodities contracts. CME is also planning to offer interest
rate swap futures contracts targeted at the European market.
A swap future is a standardised contract that mimics the
economic exposure of traditional over-the-counter (OTC) interest
rate swaps but is traded on-exchange and requires less margin.
Eurex said that Euro swap futures based on physically
settled two-, five-, 10- and 30-year euro-denominated swap
contracts will be among its new interest rate products.
They will be cross margined with other fixed income futures
it offers, meaning the funds a market participant posts to back
swap future positions can be applied to other positions,
reducing the total margin payment required.
Its FX futures will be physically delivered through the
Continuous Linked Settlement (CLS). They differ from the CME's
products as they are based on the spot market rather than the
futures market, Dinc said.
Eurex will add futures in more currencies such as the
Japanese yen at a later date, he said.
(Reporting by Clare Hutchison; Editing by Susan Fenton)