Euronext launches world's first index based Exchange for Physicals

PUBLISHED: 01 May 2014 @ 07:08 | Comments (0) |

CAC 40 INDEX FUTURES AND AEX-INDEX FUTURES

Euronext, a wholly owned subsidiary of IntercontinentalExchange Group (NYSE:ICE), today announced that it will be the world’s first regulated market to launch a complete centrally cleared solution to facilitate the trading of Exchange for Physicals (EFP) on index futures.

The service will be available in a first instance on CAC 40 and AEX-Index Futures and is expected to be fully operational in the first quarter 2015.

This new EFP solution offers clients the ability to trade CAC 40 and AEX-Index Futures simultaneously against their underlyings, concentrating liquidity in a fully transparent central order book supported by a market making scheme. The service is a fully automated straight-through process which totally eliminates the current administrative burden for customers and its related execution risk.

EFP trading on Euronext’s regulated market will use LCH. Clearnet SA as the CCP, thereby facilitating the clients’ post-trade obligations and reporting. Clients will have access to the facility through their existing connection to cash and derivative markets.

Adam Rose, Head of Financial Derivatives at Euronext, said, “We would like to thank all three supporters, BNP Paribas, Credit Suisse and Societe Generale, who contributed to this innovative project and successfully helped to bring it to fruition. The EFP solution eliminates execution risk and operational burdens for our clients while providing full price transparency and transfer of counter party risk. This is an important initiative for Euronext in our efforts to build out our derivatives business in order to respond to client needs, and we are very proud to be the first exchange to be able to offer this service on index futures.”

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