New for Traders: Week ending October 26

A wrap-up of new products and services from around the industry.

Commodities

  • CME Group will pay a total of $2 million to almost 200 Peregrine Financial Group (PFG) clients who traded on CME exchanges. The cash comes from a CME fund established earlier this year to protect farmers, ranchers and agricultural coops that use the company’s market to hedge their products.
  • CME Group announced it has reached a definitive agreement to acquire the Kansas City Board of Trade (KCBT) for $126 million in cash and a distribution of excess cash to members. CME Group agreed to keep the trading floor open for at least six months and will maintain a committee of KCBT participants to advise on hard red winter wheat contract terms and conditions for at least three years. CME Group CEO Phupinder Gill says, “This transaction will produce cross-margining benefits and other capital efficiencies."
  • Phillip Futures DMCC, an online trading services provider, has been approved as a broker clearing member of the Dubai Gold and Commodities Exchange (DGCX). The company offers clients a variety of financial services, such as stock-broking, share financing, asset management and investment research.
  • CME Group will increase the daily price limits for nonfat dry milk futures to 4¢ per pound, with an expandable limit of 8¢. The price limits for dry whey futures have also increased, to 6¢ per pound for daily price limits and 12¢ for expandable limits.

Regulation

  • The Commodity Futures Trading Commission (CFTC) extended the deadline for market participants to determine if certain commodities fall under Dodd-Frank’s definition of a “swap,” “swap dealer” or “major swap participant” when converting them from swaps to futures contracts. The extensions affect agricultural and exempt commodities, foreign exchange forwards and swaps and certain foreign entities.
  • Newedge was appointed the exclusive swap counterparty to the EEA Fund Management Ltd.’s Diversified Trend fund. The Irish-based fund has been authorized as compliant with the Undertakings for Collective Investment in Transferable Securities (UCITS) directive

Technology

  • The International Swaps and Derivatives Association Inc. (ISDA) announced its support for the Clearing Connectivity Standard (CCS), which is geared towards improving over-the-counter derivatives reporting and communications for asset managers, futures commission merchants, central counterparties and custodians.
  • SunGard has made its Infinity Process Platform available through the Eclipse Stardust project, an open source business process management suite. The BPM will is designed to help improve the infrastructure behind key financial operations by increasing automation and efficiency.
  • Moscow Exchange launched a Point of Presence connectivity point in Equinix’s LD4 International Business Exchange (IBX) data center, based in London. The Point of presence gives users an average 42 millisecond round-trip latency between Moscow and London.

 

Options

  • InterContinental Exchange Inc. licensed Markit’s North American and European corporate credit default swap indexes, with the aim of developing futures and options contracts based on Markit’s CDX and iTraxx index families.
  • The Options Industry Council (OIC) and the Shanghai Association for International Exchange of Personnel signed a memorandum of understanding to strengthen cooperation on options research and education.
  • The CBOE Futures Exchange (CFE) plans to launch its S&P 500 Variance futures later this quarter. Similar to over-the-counter (OTC) variance swaps, the contract will allow users to trade the difference between the implied and realized variance of the S&P 500 Index. The CFE also plans to introduce a Lead Market Maker Program for the futures.
  • The Options Industry Council (OIC) announced that its Investor Education Day will be held Sept. 29 in San Francisco. The event includes an Options Basics track, which focuses on fundamentals, and an Advanced Strategies course that teaches more complex concepts such as butterflies, condors and the Greeks.

Financials

  • ICAP and alternative ratings firm Rapid Ratings launched a credit derivatives rating service. Customers can subscribe to the service directly through ICAP or view it via ICAP’s global vendor distribution network.
  • CME Group received regulatory approval to offer portfolio margining of over-the-counter interest rate swap positions and Eurodollar and Treasury futures for customer accounts, beginning Nov. 19. The new program is designed to reduce risk and increase capital efficiency for some portfolios.
  • SwapClear, the interest rate swap clearing service from LCH.Clearnet, launched the industry’s first certification program for consultancy firms preparing market participants for the implementation of centralized OTC clearing.
  • CME Group announced the launch of Chinese Steel Rebar HRB400 (Mysteel) Swap Futures, which will begin trading on Oct. 15. In January, CME Group partnered with Mysteel, China’s leading provider of ferrous price and indexing services, to develop risk management products for the ferrous industry; this will be the first product listed by a CME Group exchange based in Mysteel’s price data services.
  • The CME Group will launch its deliverable interest rate swap futures contracts on Nov. 13. The contracts, which will be listed on the Chicago Board of Trade, are intended to complement CME’s interest rate futures and options business and its cleared OTC interest rate swap solution.

Forex

  • CME Group will launch its U.S. Dollar Denominated Ibovespa Futures on Oct. 22. The new cross-listing arrangement, created in partnership with the Brazilian Stocks, Mercantile & Futures Exchange, is designed to address barriers to market participation by providing customers with increased ease of access and more risk management tools.
  • Intercontinental Exchange Inc. (ICE) reached an agreement to process over-the-counter (OTC) foreign exchange contracts with ICE Link, its middleware service. The service is designed to provide affirmation, regulatory reporting and clearing connectivity for OTC FX market participants.
  • CME Group is expected to offer 30 forex futures products, including currency pairs involving the USD, EUR and CNY when it launches its European bourse next year.
  • Berkeley Futures Limited has been approved as a broker clearing member of the Dubai Gold and Commodities Exchange, adding to the exchange’s international membership base.
  • Newedge announced the launch of a new Foreign Exchange Prime Brokerage platform designed to provide institutional clients with increased access to the global currency market. The new platform includes expanded connectivity and an updated infrastructure for trade processing.
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