CME Challenger ELX Futures Sets July 10 Launch Date
June 18 2009 - 10:13AM
Dow Jones News
ELX Futures LP will begin trading July 10 as the new derivatives
exchange aims to bring competition to the Treasury futures
market.
After a year and a half of planning and development, ELX will
deliver on a pledge to offer an alternative to Chicago-based CME
Group Inc. (CME), the derivatives giant that dominates Treasury
futures trade.
"This is a significant milestone for everyone involved in ELX
Futures," said Neal Wolkoff, the former American Stock Exchange
chief executive who signed on to head ELX last fall. "We plan to
compete aggressively and offer our customers the best in service,
technology and fees."
The exchange was cleared to begin operations by the Commodity
Futures Trading Commission on May 27.
ELX is supported by a consortium of banks, technology companies
and proprietary trading firms, with the intention of offering a
cheaper and faster means of trading Treasury futures, a market in
which CME operates a near-monopoly.
ELX's fee for high-volume traders is a flat 9 cents per trade
side, which includes clearing; adding together CME's clearing and
trading fees, its lowest rate is 11 cents per trade side in
Treasury futures, following a fee shake-up earlier this week.
The group backing ELX includes Citigroup Inc. (C), Deutsche Bank
(DB), Merrill Lynch & Co. and its acquirer, Bank of America
Corp. (BAC), Barclays PLC (BCS) unit Barclays Capital, Credit
Suisse Group (CS), BGC Partners Inc. (BGCP), Getco, JPMorgan Chase
& Co. (JPM), Peak6, and Royal Bank of Scotland PLC (RBS).
Citadel Investment Group, the Chicago-based hedge fund operator,
also was a founding member of ELX but gave up its board seat when
it joined CME in developing a credit derivatives clearing and
trading platform.
Citadel maintains its equity stake in ELX.
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117;
jacob.bunge@dowjones.com