LONDON, June 7, 2021 /PRNewswire/ -- CME Group, the
world's leading and most diverse derivatives marketplace, today
launched FTSE 100 Adjusted Interest Rate (AIR) Total Return
futures.
"Building on the success of our expanding suite of Total Return
contracts, our new FTSE 100 AIR Total Return futures are an ideal
addition that will provide a capital-efficient, exchange-traded
alternative to total return swaps," said Tim McCourt, Global Head of Equity Index and
Alternative Investment Products, CME Group. "Going forward, this
new risk management instrument will support clients in hedging Euro
equity benchmark exposure."
"We are pleased to be working with CME Group on providing a
unique alternative to uncleared OTC total return
swaps which provide benefits for participants on both the buy
and sell-side," said Arne Staal,
Chief Executive Officer, FTSE Russell. "This contract will enable
market participants to trade our leading benchmark instruments
while managing capital and repo risk more efficiently."
FTSE 100 AIR Total Return futures have similar characteristics
to total return swaps and are designed to provide market
participants with exposure to the implied equity repo rate of a
European equity benchmark with an overnight floating rate, using
SONIA as the financing reference rate. Similar to OTC total return
swaps, these new contracts are quoted in basis points and use Basis
Trade at Index Close (BTIC) transactions. They also provide clients
the additional benefits of a listed derivatives marketplace.
This new product provides clients with margin efficiency and
curtailed dividend risk and serve both long and short-term
portfolio requirements for a variety of different firms. For asset
managers and pension funds set to be pulled into the phase 5 and 6
of the uncleared margin rules (UMR), the total return futures
enable trading further down the curve and offer capital-efficient
total return equity index swap. At the same time, banks and hedge
funds can utilize the instrument in the short-term to isolate their
implied repo financing costs.
FTSE 100 AIR Total Return futures are listed on and subject to
the rules of CME Group.
For contract specifications or more information, please visit:
cmegroup.com/ftse100airtrf
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) enables clients to trade futures,
options, cash and OTC markets, optimize portfolios, and analyze
data – empowering market participants worldwide to efficiently
manage risk and capture opportunities. CME Group exchanges offer
the widest range of global benchmark products across all major
asset classes based on interest rates, equity
indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing. With a range
of pre- and post-trade products and services underpinning the
entire lifecycle of a trade, CME Group also offers optimization and
reconciliation services through TriOptima, and trade processing
services through Traiana.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile
Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board
of Trade of the City of Chicago,
Inc. NYMEX, New York Mercantile Exchange and ClearPort are
trademarks of New York Mercantile Exchange, Inc. COMEX is a
trademark of Commodity Exchange, Inc. BrokerTec, EBS, TriOptima,
and Traiana are trademarks of BrokerTec Europe LTD, EBS Group LTD,
TriOptima AB, and Traiana, Inc., respectively. Dow Jones, Dow Jones
Industrial Average, S&P 500 and S&P are service and/or
trademarks of Dow Jones Trademark Holdings LLC, Standard &
Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as
the case may be, and have been licensed for use by Chicago
Mercantile Exchange Inc. All other trademarks are the
property of their respective owners.
CME-G
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SOURCE CME Group