Financial conglomerate Global Markets Exchange Group (GMEX) will begin providing a Euro-denominated, constant maturity interest rate swaps, dubbed the IRS Constant Maturity Future (CMF) contracts, for trading and clearing on Eurex, starting August 7, officials say.
Constant maturity swaps are a variation of interest rate swaps for which the floating interest portion is reset periodically according to a fixed maturity market rate of a product with a duration extending beyond that of the swap’s reset period, according to Investopedia.
The plan to offer these swaps has been in the works since late 2014, and GMEX, Eurex and relevant market participants have been preparing for the launch since then, officials say. “The cooperation will facilitate the electronic arranging of CMF contracts on GMEX’s platform with trade confirmation and central clearing taking place at Eurex,” GMEX says in a statement.
“The regulatory reforms have spurred market demand for our CMF contract as it brings the benefits of futures trading closer to OTC [over-the-counter] products, while delivering the efficiencies of centralized order execution, standardized central clearing and effective hedging of interest rate exposure,” says Hirander Misra, CEO and co-founder of GMEX Group, in a statement. “Launching a unique product is very much a process, not an event, with momentum continuing to build beyond the initial go-live date.”
GMEX and Eurex say they are working with vendors to ensure software and other services are ready on the first day of the launch, and the participating firms “expect a diverse range of active participants from the existing Eurex trading and clearing member base,” officials say.
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