Global Markets Exchange Group, a wholly owned subsidiary of Global Markets Exchange Group International (GMEX), and Eurex, an international derivatives exchange market, report reaching a license agreement, under which Eurex will license GMEX’s Euro-denominated constant maturity future (CMF) for trading, via Eurex’s multilateral trade registration (MTR) service, and clearing on Eurex Clearing.
In addition, “GMEX has been granted regulatory approval from the UK Financial Conduct Authority (FCA). The planned product launch is subject to regulatory approval needed for Eurex Clearing,” the companies say in their joint statement. “The GMEX execution platform is already operational for user acceptance testing, with a growing number of vendors and clients connecting for end-to-end testing.”
The CMF is based on the interest rate swap index average (IRSIA) and 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.
“Thereby, 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 two to 30 years,” according to the statement, which notes also that agreement provides that “transactions in CMF contracts will be arranged on GMEX’s trading platform and executed at Eurex Exchange with clearing taking place at Eurex Clearing. This licensing model will also enable Eurex Exchange members to trade GMEX’s Euro-denominated CMF under their current membership and benefit from existing clearing agreements and infrastructure.”
GMEX is making “very good progress with our launch and this new licensing arrangement with Eurex provides firms with a well-established mechanism to trade and clear our CMF contracts,” Hirander Misra, CEO of GMEX Group, says in the statement.
“Our members will benefit from access to a new type of interest rate swap futures contract via our proven and efficient exchange environment,” Brendan Bradley, chief innovation officer and member of the Eurex executive board, says in the statement.
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