– New Interest Rate Derivatives Venture Backed by London Stock Exchange Group, CBOE, Major Dealer Banks
– Market to Provide Competitive Offering in Interest Rate Futures
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that it made a minority investment in CurveGlobal, a new interest rate derivatives venture of the London Stock Exchange Group (LSEG) and a number of major dealer banks. CBOE is the only U.S. exchange in the venture. Financial terms of CBOE’s investment were not disclosed.
CurveGlobal plans to initially offer trading in Short Term Interest Rate (STIR) futures in Euribor and Short Sterling and Long Term Interest Rate (LTIR) futures in Bund, Bobl, Schatz and Gilts. Additional products are expected to be rolled out following the launch phase. All products designed and supported by CurveGlobal will be traded on LSEG’s wholly owned subsidiary, London Stock Exchange plc’s London Stock Exchange Derivatives Market and cleared through LCH.Clearnet. Trading of CurveGlobal products is expected to launch in the second quarter of 2016, subject to regulatory approvals and necessary licenses.
Changes in regulation have increased the cost of trading interest rate derivatives. The launch of CurveGlobal caters to banks and other market participants looking for more capital efficient ways to trade and hedge these products. CurveGlobal will bring competition to the space, providing more product choices and, through LSEG’s trading and clearing platforms, offer greater trading efficiency and reduced transaction costs.
“CBOE’s investment in CurveGlobal provides our company with a stake in an innovative venture that responds to a growing need in the marketplace,” said CBOE Holdings CEO Edward T. Tilly. “CurveGlobal represents a unique value proposition for interest rate futures users, and CBOE is pleased to be its U.S. anchor exchange. We look forward to leveraging our trading and product development expertise to help CurveGlobal drive new trading opportunities and marketplace efficiencies.”
Near term, CBOE’s investment in CurveGlobal will be immaterial from a financial perspective; however, CBOE is very optimistic about the potential for growth longer term.
Additional information on CurveGlobal can be found in the LSEG press release at: http://www.lseg.com/resources/media-centre/press-releases/london-stock-exchange-group-launches-new-derivatives-venture-%E2%80%93-curveglobal.
