Eurex Exchange, the derivatives market owned by Deutsche Börse, is set to introduce a new family of contracts based on Russian depository receipts traded on the London Stock Exchange (LSE).
From 19 March, Eurex will offer futures and options based on the RDX USD equity index.
The RDX USD index has been calculated by the Vienna Stock Exchange since 1997, and tracks the prices of the 15 most liquid depository receipts traded on the LSE’s International Order Book. These include stocks such as Gazprom, Lukoil, Rosneft, Norilsk and Sberbank.
Eurex's new Russian contracts may rile the LSE, which has struggled to get its new derivatives market off the ground, partly because of what some perceived to be anti-competitive measures by the German exchange group last year.
The LSE's Turquoise Derivatives market, which launched last June, was refused the licence to offer contracts based on STOXX, the index provider owned by Deutsche Börse, forcing it to lodge a complaint with European competition authorities.
In order to build up liquidity in RDX USD contracts quickly, Eurex Exchange will be offering a market-making incentive program.
The new contracts will be settled in cash and Eurex will offer quarterly expiration dates for RDX USD index futures with a maximum maturity of twelve months, increasing to 60 months for index options.
“Our highly liquid platform now also offers our global customers listed hedging instruments based on this index, which is mainly used in the off-exchange market,” explained Steffen Köhler, head of product development, Eurex. “We also aim to increase the attractiveness of our RDX USD derivatives by offering participants our flexible contracts facilities for these products.”