Eurex’s euro-denominated interest rate swap futures have gone live today, with the German exchange getting the jump on competition by launching the alternative products to OTC derivatives.
With forthcoming regulations enforcing the central clearing of OTC swaps, the cost of execution has risen, and subsequently paved the way for the introduction of swap futures contracts in Europe.
The products already exist in the US, spearheaded by CME and Eris Exchange as clearing rules across the Atlantic have already taken hold.
Eurex has launched contracts with 2, 5, 10 and 30-year maturities.
Eurex also plans to offer cross margining across cleared OTC and exchange-traded swaps, where buy-side firms can benefit from offsets.
The initiative will come into force as regulations increase the costs of clearing, allowing buy-side firms to reduce their expenditure.