European derivatives venue CME Europe is set to formally launch on Sunday, having received regulatory approval for its full product range on Wednesday.
London-based CME Europe plans to offer trading in a range of different asset classes, though it will initially focus on 30 FX futures products and biodiesel futures.
CME already runs well established futures and options exchanges in the US, but said Europe offers significant opportunities in the FX market, particularly with incoming regulatory changes.
“Europe trades 60% of the global FX market and the OTC market is very strong here,” said William Knottenbelt, senior managing director, EMEA at CME Group. “However, Basel III is increasing the margin cost of trading OTC, which means futures are the cheapest way to trade FX and this will lead to growing demand to trade FX futures.”
CME Europe received the green light from the Bank of England (BoE) on Wednesday to launch with its 30 currency pairs, ending speculation the venue might only launch with biodiesel contracts.
“After receiving regulatory approval to launch CME Europe there were several smaller issues we needed to tackle and this has now all been signed off by the BoE,” added Knottenbelt.
The exchange will launch on Sunday night to prepare for trading on Monday. CME said there is also significant interest from Asian traders and the exchange’s London time zone means it is well placed to serve that market.
Final membership numbers have yet to be confirmed, though the exchange expects to launch with between 20 and 40 members, largely depending on how many complete their applications before Sunday.
Initially, CME Europe will focus on bedding in its launch products but will also explore adding metals contracts, interest rate products and other energy contracts in the coming months. It declined to give details of its trading targets.