Buy-siders back new swap futures venture

Start-up swap futures trading venue GMEX is receiving backing from buy-side firms in the build up to its summer launch date.

By None

Start-up swap futures trading venue GMEX has received backing from buy-side firms in the build up to its summer launch date.

The latest two firms to support the venture are Old Mutual Global Investors and Lyxor Asset Management, who have declared their intention to trade the euro-denominated interest rate swap constant maturity futures.

GMEX believes its CMF contracts - which track the interest rate exposure at each point on the yield curve – are “more closely aligned to the interest rate swap market than any other exchange product currently available”.

“We have been looking for a more margin efficient alternative to interest rate swaps for hedging our new portfolios and believe that the GMEX CMF will more closely match our requirements than any other futures contracts currently available," said Russ Oxley, head of rates and LDI at Old Mutual Global Investors. "We also like the fact that we can use the collateral and operational processes in place for existing Eurex fixed income derivatives products.”

Swap futures have been traded for two years in the US markets, however are only now starting to arrive in Europe.

Whether the products will succeed or not remains to be seen, but GMEX has secured big-name backing in its attempt to launch an alternative to OTC products which are set to become increasingly expensive to trade. 

The platform has received investment from Societe General and Deutsche Boerse, and also secured connectivity from Trading Technologies for its first day of launch.

“As a diversified CTA Manager, we always seek to enlarge our trading universe in a liquid, listed and cleared framework. We clearly welcome the rise of contracts such as the GMEX CMF as they will give us access to truly diversifying risk exposure previously only available in the OTC space,” said Guillaume Jamet, principal manager of the Lyxor Epsilon Program. 

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