New for Traders: Week ending Dec. 7

MIAX launches, HKEx completes its LME acquisition, exchanges make technology upgrades and S&P 500 Variance futures to launch on Monday.

Financials

  • The Hong Kong Exchange (HKEx) completed its acquisition of LME Holdings Ltd.’s entire issued ordinary share capital. HKEX CEO Charles Li said in a statement that he believes “this partnership will deliver enormous benefits over time as we leverage our relationships and knowledge to build on LME’s strong global position.”
  • CBOE Futures Exchange will launch trading in S&P 500 Variance futures on Dec. 10. The contract is designed to let users trade the difference between the index’s implied and realized variance, and will offer the same quoting conventions and economic performance of OTC variance swaps.
  • NYSE Euronext plans to introduce a pan-European exchange specifically for small and medium enterprises, in consideration of the challenges those businesses face when securing financing.

Options

  • The Miami Options Exchange (MIAX) launched on Dec. 7 after receiving regulatory approval from the Securities and Exchange Commission. It is the 11th U.S. equity derivatives market.
  • The International Securities Exchange (ISE) will launch trading in Mini Options on March 18, 2013. ISE is the first exchange to confirm a launch date for the options, which will represent a deliverable of 10 shares of an underlying security. Mini Options will initially be listed on APPL, AMZN, GLD, GOOG and SPY.

Forex

  • Thomson Reuters enhanced its FX matching platform designed to boost capacity, scalability and performance. New features include a graphical user interface and click to trade capability.
  • Intercontinental Exchange (ICE) will launch two new cash-settled forex futures contacts for the Indian rupee (INR)/U.S. dollar and Brazil real/U.S. dollar beginning Jan. 28, 2013. ICE is the first U.S. exchange to launch an INR futures contract.

 

Commodities

  • The Tokyo Commodity Exchange Inc. (TOCOM) and Nikkei Inc. launched new indexes based on their co-branded indexes. The Nikkei-TOCOM Leverage Index, which is available on a daily basis on TOCOM’s website, is designed to realize a high-risk/high-return investment strategy based on the expectation of a bullish market.
  • On Dec. 10, ICE Futures Europe will reopen the daily futures market for the carbon credit Phase II EU Allowances and Certified Emission Reductions, and launch a new daily futures contract for Phase III EU Allowances.
  • The European Energy Exchange (EEX) will launch trading in spot contracts for United Nations carbon offsets beginning on Dec. 5.
  • Altegris Clearing solutions announced the creation of the Altegris CTA Challenge, a year-long competition that will recognize the industry’s best commodity trading advisors. All qualified CTAs are eligible. Registration closes on Dec. 10, and the winner will be announced in early 2014.

Technology

  • NASDAQ OMX chose SunGard to support connectivity and post-trade workflows for members of its planned NLX European derivatives market. The market will offer trading in EUR and GBP-dominated short- and long-term interest rate derivatives when it launches next year.
  • Eurex Exchange launched a derivatives trading system designed to give exchange participants enhanced functionalities, improved performance and increased choice. The roll-out began with 24 products, including property, inflation and weather derivatives. A full roll-out is scheduled to end in May 2013.
  • SunGard launched Apex Prime, a technology platform designed to give prime services providers a single view of all hedge fund client activity, ideally allowing them to efficiently manage trade exceptions, calculate financing costs, support flexible margining rules and view security and cash positions in real time.
  • StoneCastle Cash Management, a provider of cash management products for institutional investors, has entered into a definitive agreement with eCD Market to acquire its assets and exclusively license its online CD marketplace. The eCD deposit portal is designed to allow users to easily obtain a large amount of Federal Deposit Insurance Corp. insurance for cash balances.

Regulation

  • The Commodity Futures Trading Commission (CFTC) unanimously approved a determination requiring swap dealers to guarantee trades involving six classes of credit default and interest rate at registered clearinghouses.
  • CME Group Inc. dropped a lawsuit challenging CFTC trade-data reporting rules after the agency withdrew certain requirements governing the routing of trade price and volume information.
  • The CFTC approved CME’s application to establish its CME Repository Service, a swap data repository. The exchange will waive reporting fees for the service through Set. 30, 2013, including back-loaded trades.
  • CME Group Inc. and the National Futures Association chose AlphaMetrix360 as their electronic data aggregation services provider. The new partnership is designed to create a system to collect bank balances for depositories holding customer-segregated, secured amount and sequestered funds for futures commission merchants.
  • The U.S. Treasury Department exempted forex swaps and forwards from Dodd-Frank regulations that will apply to other derivatives. The agency explained the decision by saying that “unlike other derivatives, FX swaps and forwards already trade in a highly-transparent, liquid and efficient market.”
  • The U.S. Federal Trade Commission approved CME’s bid to acquire the Kansas City Board of Trade for $126 million in cash.
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