GMEX to provide IRS CMF on Eurex
07 July 2015 Frankfurt
Image: Shutterstock
As of 7 August 2015, Global Markets Exchange Group (GMEX) will provide a Euro-denominated Internal Revenue Service (IRS) Constant Maturity Future (CMF) for trading and clearing on Eurex.
Both parties agreed on this cooperation at the end of 2014 and since then, together with market participants, have been preparing for the launch.
The cooperation will facilitate the electronic arranging of CMF contracts on GMEX’s platform with trade confirmation and central clearing taking place at Eurex.
“The regulatory reforms have spurred market demand for our CMF contract as it brings the benefits of futures trading closer to [over-the-counter] products, while delivering the efficiencies of centralised order execution, standardised central clearing and effective hedging of interest rate exposure,” said Hirander Misra, CEO and co-founder of GMEX Group.
“Launching a unique product is very much a process, not an event, with momentum continuing to build beyond the initial go-live date.”
For the market launch, both partners have confirmed that they expect a “diverse range” of active participants from the existing Eurex trading and clearing member base.
This includes large sell-side banks, buy-side firms, futures trading houses and derivatives brokers such as R.J. O’Brien Limited, formerly The Kyte Group, a UK-based affiliate of Chicago-based R.J. O’Brien & Associates.
David Mudie, CEO of R.J. O’Brien Limited, commented: “We’re delighted to be among the first to offer execution and clearing services for the GMEX CMF contracts at launch. We’ve seen strong client demand for access to this product from day one.”
To help facilitate market launch, key software vendors will provide services from the first day of trading. Additionally, Eurex Exchange members can trade and clear the GMEX IRS CMF under their current membership.
As of April 2015 onwards, market participants have had access to Eurex’s trading and clearing simulation environment to test internal systems and processes.
GMEX CMF is based on the Interest Rate Swap Index Average (IRSIA) and accurately tracks the interest rate exposure at each point on the yield curve by removing the expiry date and marking the contract to market against an IRSIA Constant Maturity Index on a daily basis.
The contract facilitates the management of interest rate exposure without a constant need to re-adjust and maintains the liquidity of a given maturity from 2 to 30 years.
Both parties agreed on this cooperation at the end of 2014 and since then, together with market participants, have been preparing for the launch.
The cooperation will facilitate the electronic arranging of CMF contracts on GMEX’s platform with trade confirmation and central clearing taking place at Eurex.
“The regulatory reforms have spurred market demand for our CMF contract as it brings the benefits of futures trading closer to [over-the-counter] products, while delivering the efficiencies of centralised order execution, standardised central clearing and effective hedging of interest rate exposure,” said Hirander Misra, CEO and co-founder of GMEX Group.
“Launching a unique product is very much a process, not an event, with momentum continuing to build beyond the initial go-live date.”
For the market launch, both partners have confirmed that they expect a “diverse range” of active participants from the existing Eurex trading and clearing member base.
This includes large sell-side banks, buy-side firms, futures trading houses and derivatives brokers such as R.J. O’Brien Limited, formerly The Kyte Group, a UK-based affiliate of Chicago-based R.J. O’Brien & Associates.
David Mudie, CEO of R.J. O’Brien Limited, commented: “We’re delighted to be among the first to offer execution and clearing services for the GMEX CMF contracts at launch. We’ve seen strong client demand for access to this product from day one.”
To help facilitate market launch, key software vendors will provide services from the first day of trading. Additionally, Eurex Exchange members can trade and clear the GMEX IRS CMF under their current membership.
As of April 2015 onwards, market participants have had access to Eurex’s trading and clearing simulation environment to test internal systems and processes.
GMEX CMF is based on the Interest Rate Swap Index Average (IRSIA) and accurately tracks the interest rate exposure at each point on the yield curve by removing the expiry date and marking the contract to market against an IRSIA Constant Maturity Index on a daily basis.
The contract facilitates the management of interest rate exposure without a constant need to re-adjust and maintains the liquidity of a given maturity from 2 to 30 years.
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