Eurex and GMEX are pleased to announce that the first trades in GMEX’s Euro-denominated IRS Constant Maturity Future (IRS CMF) have been successfully executed, cleared and settled. This innovative product has been available for the electronic arranging of transactions on GMEX’s platform with trade confirmation and clearing on Eurex since 7 August 2015.
At launch, a number of trading and clearing members have been able to trade and clear including Bank of America Merrill Lynch, Société Générale and R.J. O’Brien. GMEX and Eurex are continuing to admit and connect further market participants to trade the IRS CMF contracts, including large sell-side banks, buy-side firms, futures trading houses and derivatives brokers.
Additionally, key software and market data vendors have been offering their services from the start including Trading Technologies, Fidessa and Bloomberg.
The IRS CMF contract provides a much lower margin alternative to plain vanilla OTC IRS for hedging given the increased capital requirements relating to EU Commission’s mandatory central clearing and front loading rules for IRS.
The new regulation will likely come into force in April 2016 with buy-side firms having six months to comply.
“We are very pleased with the observed level of market interest. Launching an innovative product is very much a process, not an event, with a range of buy and sell-side participants looking to go live over the coming months driven by the need for capital efficiencies as a result of regulatory change,” commented Hirander Misra, CEO and Co-Founder of GMEX Group.
“We are delighted that the GMEX product suite is now available for trading and clearing, which is the culmination of a very positive collaboration between various areas of the futures market ecosystem. Now we need to maintain the momentum with GMEX and market participants to build the liquidity that holders of interest rate exposure will need to address the requirements of the new regulatory environment,” added Brendan Bradley, member of the Eurex Executive Board.
