ELX Futures Plans European Rate Products

New York-based ELX Futures LP said Tueday that it plans to launch interest-rate futures in Europe in a move that could ease regulatory concerns over the planned merger between NYSE Euronext (NYX) and Deutsche Boerse AG (DBOEF, DB1.XE).

Bank-backed ELX launched U.S. rate products two years ago, challenging the effective monopoly in the asset class held by CME Group Inc. (CME), with some contracts recently securing a market share of around 5%.

The company said it would move ahead with plans "to challenge an expanding monopoly structure" in Europe, taking on the Eurex unit of Deutsche Boerse and the NYSE Liffe of its prospective U.S. partner.

That merger plan was driven in part by synergies from their dominance in short and long-dated interest rate derivatives.

The potential entry of ELX was first identified last month by Dow Jones Newswires.

"ELX was created to challenge monopolies, high prices and a lack of effective innovation in the futures industry," ELX Chief Executive Neal Wolkoff said in a statement.

The company gave no timescale for its prospective entry, but it joins two other efforts to challenge the duopoly in European rate futures.

London Stock Exchange Group PLC (LSE.LN) has for nearly a year been planning an entry into European derivatives trade, as is electronic market operator Chi-X Europe, though those efforts are seen focused on equity-linked markets.

NYSE Euronext and Deutsche Boerse have acknowledged they face a potential challenge from European antitrust officials because of their regioanl dominance in the region's futures trading and clearing.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com

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