NYSE Euronext Squares Up To CME In US Futures Contest
02 Marzo 2011 - 9:55PM
Dow Jones News
NYSE Euronext (NYX) executives on Wednesday fired their first
salvo in what could become one of the fiercest battles in financial
services as it won regulatory approval to compete with the core
business of CME Group Inc. (CME), the world's largest futures
exchange operator.
The New York-based exchange operator will launch its own roster
of fixed-income contracts March 21, creating a three-way battle for
the market in what is seen as the biggest challenge to the CME's
dominance in years.
Chicago exchanges have twice fought off challenges to their
Treasury and Eurodollar contracts from European rivals, and this
week CME fired a pre-emptive shot with plans that mirror many of
the claimed advantages of the new NYSE Euronext offerings.
"That was all headlines and no substance," said Tom Callahan,
chief executive of the NYSE Liffe US derivatives unit, speaking on
a conference call with reporters.
CME is already fending off a challenge from the bank-backed ELX
Futures platform, whose share of U.S. Treasuries climbed as high as
5% in January.
Callahan and fellow executives declined to be drawn on specific
share targets for its contracts, though said the efficiencies
offered by routing them through a new clearinghouse would draw new
traders into the market.
"It's going to take time to germinate," said Walt Lukken, the
former acting chairman of the Commodity Futures Trading Commission
who heads New York Portfolio Clearing, a joint venture with
Depository Trust & Clearing Corp. that is central to the NYSE
initiative.
The NYSE Liffe US unit already trades equity index and metals
contracts--the latter complex acquired from CME--and NYSE Euronext
Chief Executive Duncan Niederauer said last year that daily trading
volume of "a few hundred thousand contracts" and a similar level of
open interest is needed for the venture to be taken seriously.
NYSE Liffe US will on March 21 introduce Eurodollar futures, a
lookalike version of CME's benchmark product tied to the London
interbank offered rate.
Futures linked to the yields of 2-year, 5-year and 10-year
Treasury notes will follow on March 28, as well as contracts on
longer-duration government bonds, NYSE Euronext said Wednesday.
Trades in the new markets will be cleared through the new NYPC
joint venture, which seeks to reduce traders' cost of collateral by
allowing customers to group together the margin posted against
futures positions alongside that used for trades in cash
Treasurys.
The advantages will initially be limited to proprietary accounts
of firms that are members of both NYPC and the Fixed Income
Clearing Corp. division of the DTCC, which handles trading in
government securities.
Callahan railed against the CME plan, noting it was limited to
exchange members and excluded repo transactions.
Lukken said it was important to have a new competitive force to
face the CME, though executives declined to comment on whether NYSE
Liffe US might be used to handle derivatives products from merger
partner Deutsche Boerse AG (DB1.XE).
The German exchange's Eurex derivatives arm tried unsuccessfully
in 2004 to break the stranglehold on Treasury contracts held by the
Chicago Board of Trade, which was acquired three years later by
CME. Euronext-Liffe, acquired by the Big Board parent, also tried
and failed to attack the CME's Eurodollar franchise in 2003.
NYSE Euronext shares were recently flat at $36.52. CME shares
were down 0.5% at $304.92 after hitting a session low following the
announcement.
-By Jacob Bunge, Dow Jones Newswires; 312 750 4117;
jacob.bunge@dowjones.com
Grafico Azioni NYSE Group (NYSE:NYX)
Storico
Da Lug 2024 a Ago 2024
Grafico Azioni NYSE Group (NYSE:NYX)
Storico
Da Ago 2023 a Ago 2024