NYX Nyse Euronext

Startup exchange ELX Futures LP asked regulators Monday for more time to scrutinize a plan by NYSE Euronext (NYX) to develop a new clearinghouse facility for trading in Treasurys and related futures contracts.

ELX petitioned the Commodity Futures Trading Commission for a full six-month review of the clearinghouse's application, citing the proposal's complexity and what ELX views as possible anti-competitive behavior.

NYSE Euronext is developing the facility, called New York Portfolio Clearing, in conjunction with the Depository Trust & Clearing Corp. as part of an effort to introduce a new futures market that will offer contracts tied to key U.S. interest rates.

Chicago-based CME Group Inc. (CME) currently dominates trading in such futures. ELX, backed by a group of banks and trading firms, launched a range of copycat products in mid-2009.

Key to NYSE Euronext's offering is the planned ability for some customers to pool collateral posted against trading in government issues, like Treasury notes, in the same repository as collateral for related futures contracts. More efficient use of margin is seen making it cheaper for banks, brokers and hedge funds to do business in the markets.

ELX has protested the partnership between NYSE Euronext and the DTCC, arguing that the arrangement has blocked ELX from setting up a similar service.

"Since it was first announced in June of last year, we have not been able to do a similar transaction," said ELX Chief Executive Neal Wolkoff. He argued that market participants should get longer than 30 days to weigh the implications of the NYSE Euronext plan.

NYSE Euronext filed documents related to the clearinghouse venture with the CFTC in early November, and seeks to have the unit up and running in February 2011, pending approval from regulators. New York Portfolio Clearing also requires a sign-off from the Securities and Exchange Commission.

ELX said in a letter Monday that the SEC filing has not yet been made public, making it difficult to fully understand NYSE Euronext's clearinghouse proposal. The documents filed with U.S. futures authorities are also incomplete and hard to search via computer, according to ELX.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

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