New CME Europe exchange preps for end of September launch


The launch for the CME Group's new market, to be called CME Europe, is set for September 29 but anyone thinking it will be alone before the comPetition steps in should think again. The Deutsche Borse-owned derivatives exchange Eurex will launch FX derivatives on October 7th.

The CME Group will be based in London and will initially offer trading in 30 currency pairs. Initially, it announced a start date of September 9th even before it had approval of the UK regulatory body, the Financial Conduct Authority.

Two weeks ago, CME Group and IntercontinentalExchange announced plans to create a new trade body that aims to resolve issues involving repositories or, "the new derivatives data warehouses mandated by global regulation," according to news reports.

"The effort to create the Trade Repository Association is being led by the Trade Repository Group, a new UK consortium that is preparing to register with European authorities as a derivatives data warehouse in coming weeks, writes the FT.

This is how the CME website describes CME Europe:

"Subject to required recognition by the Financial Conduct Authority, CME Europe will be a London-based derivatives exchange providing regionally tailored access to new, differentiated products, while leveraging the global scale and reach of CME Group. A wholly owned subsidiary of CME Group with its own dedicated Board of Directors and management team, CME Europe will offer new, more applicable regional risk management opportunities combined with the potential for meaningful operational and capital efficiencies.

Customers will be able to choose between a range of connectivity options to CME Europe as well as use CME Group's own free trading screen, CME Direct. Once connected they will be able to choose between trading the initial range of FX futures on CME Globex or submitting block or EFPS trades via CME ClearPort for clearing. Clearing services will be provided by CME Clearing Europe, our established London-based clearing house regulated by the Bank of England."

Does the world need another exchange? This will mean another venue for derivatives and will have to weigh in whether or not exchanges should connect to this market. It will also mean more market data and jobs for exchange technologists and consultants. Stay tuned.