Welcome to Futures Industry
FI Staff
Published 8/22/2008

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Trading Firms Buy 20% of Dubai Mercantile Exchange

The Dubai Mercantile Exchange has agreed to sell 20% of its equity to a number of financial institutions and energy trading firms. The crude oil futures exchange was established last year as a joint venture between the New York Mercantile Exchange, Dubai Holding, and the Oman Investment Fund, and is vying to become a price discovery mechanism for Middle Eastern oil. The new shareholding structure will include Goldman Sachs, Morgan Stanley, Vitol, Concord Energy, Casa Energy Trading, and a Shell company.

"A successful and liquid futures exchange linked to energy products in the region will help us to better manage some of the risks inherent in our own business and those of our clients," said Goran Trapp, Morgan Stanley's head of commodities in London. "We believe that the ongoing economic growth and development in Dubai and wider GCC region will continue to drive the success of the DME, delivering return on invest­ment as well as enhanced opportunities for our global client base."

MexDer Picks RTS as Front­End Provider

The Mexican Derivatives Exchange, looking to boost local participa­tion in its markets, has contracted with RTS Realtime Systems Group to provide a front­end order entry system for its electronic trading platform, the two companies announced on July 23.

Under the terms of the agreement, MexDer will work with RTS to roll out and install its suite of front­end solutions, which will include a "white­label" version of its web­based front­end as well as a more sophis­ticated trading platform. The systems will be distributed to MexDer local members including market makers, brokers and clearing firms. The new system will allow the exchange to upgrade its local member access from the exchange's proprietary trading terminals, MexDer officials said. In addition, the new systems will be based on the FIX protocol, the indus­try standard protocol for order messages.

"We have been taking enormous steps to facilitate international access to our markets," Jorge Alegria, chief executive officer of MexDer, said in the press release. "Our products are really benchmarks not only for Mexico, but for the Latin American region as a whole, and we believe this next generation front­end will further our global growth potential."

CME Group to Launch Interest Rate Swaps Clearing

CME Group will begin clearing certain interest rate swaps on Sept. 2, the exchange announced on July 21. Through its new OTC clearing application, Clearing360, CME will begin clearing standardized, forward starting, International Monetary Market dated interest rate swaps with maturities ranging from three months to 10 years as well as Overnight Index Swaps for IMM dates. The contracts will be available both in U.S. dollars, with fixed or floating quarterly payments, and euros, with fixed or floating semi­annual payments, CME said. Trades can be submitted either through CME Group's web­based front­end clearing system or by using CME's Swapstream's sPro trading platform.

DTCC and Markit form OTC Derivatives Trade Processing Company

The Depository Trust and Clearing Corp and Markit have formed a new company to offer electronic processing of over­the­counter deriva­tives trades, the two companies announced on July 21. Roughly 50% of transactions in the OTC markets are still confirmed on paper, according to industry estimates. The new company will combine Markit's Markit Wire platforms and its other trade processing services with DTCC's Deriv/SERV matching and confirmation engine and AffirmXpress, MCA Express and Novation Consent Services. The new company will be headquartered in London and will have a second major operations hub in New York. The companies said they jointly have more than 1,100 financial institutions as customers and handle over 7 million in annual transaction volumes across the OTC interest rate, credit and equity derivatives markets.

IFM Fees Databank Now Offers Full Coverage of Freight Derivatives Market

The IFM Trading Fees Databank now offers fee information for the International Maritime Exchange, a leading platform for freight futures and options. This is in addition to the freight futures cleared by LCH.Clearnet, Nymex ClearPort and SGX AsiaClear, meaning that the IFM Fees Databank now covers all the major market centers in the rap­idly growing international freight derivatives market.

September/October 2008

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