Derivatives

Both buy- and sell-side market participants remain unprepared for impending regulation on OTC derivatives reform, according to a new report by research consultancy TABB Group.

Swiss financial market infrastructure operator SIX Group is selling its stake in its 50/50 Eurex derivatives exchange joint venture with Deutsche Börse, the German vertically-integrated exchange and post-trade services provider currently in the process of merging with exchange group NYSE Euronext.

Data centre provider Equinix has announced deals to support low-latency connectivity to trading venues in Brazil and Canada.

A consultation that will decide which derivatives are to be centrally cleared and which will remain OTC is due to start “shortly”, according to Alexander Justham, director of markets at the UK's Financial Services Authority.

Derivatives trading and risk management solutions provider Patsystems has launched its Patsystems XConnect hub in London, which it says will reduce connectivity costs and enable smaller trading firms to connect to a wide range of trading venues.

In May 2011 the London Stock Exchange Group saw cash equity trading jump year-on-year on its multilateral trading facility Turquoise, although equity volumes across the rest of the group fell in comparison with the high levels experienced in May 2010.

A confirmed bid by exchange operator NYSE Euronext and Markit, a financial information service provider, for Anglo-French clearing house LCH.Clearnet suggests the primacy of future OTC clearing revenues over current profit margins, market participants observed.

Turquoise, the alternative trading venue majority owned by the London Stock Exchange, has confirmed that eight shareholder banks have signed up to trade on its new derivatives platform from 6 June.

Trading venue operator BATS Global Markets has reported volume numbers for May 2011, including 3.9% matched market share for BATS Options, the US derivatives venue launched just over a year ago.

The proposed introduction of after-hours futures trading by the Hong Kong Exchanges and Clearing is aimed at attracting European and US investors, but may also support the exchange's key strategic goal of meeting latent international demand for renminbi-denominated products.