PLUS-DX, the derivatives market operated by UK retail-focused exchange group PLUS Markets Group, has signed broker-dealer Vantage Capital Markets (VCM) as its first trading member after receiving regulatory approval in July.
VCM will offer its clients the ability to trade PLUS-DX's swap index contract (SIC), which provides exposure to the interest rate swap market via an exchange-traded index. Clearing on PLUS-DX is handled by Anglo-French central counterparty LCH.Clearnet.
The SIC, which was developed by PLUS in association with index provider FTSE, is based on the FTSE Medium Term Interest Rate Swap Index Series, initially covering the US dollar curve. Each currency index series comprises 45 indices that contain 29 plain vanilla swaps and 16 investment strategies with 10 spreads and six butterfly trades.
“We believe that the swap index contract is an innovative product responding precisely to the needs of the market,” said Rob Hampel, capital partner, Vantage Capital Markets. “It is simple, accessible and transparent, allowing participants to manage their interest rate exposure and risk without having to enter into complex interest rate swap agreements. We have had a very positive response from our clients, and are working closely with them and our technology partner, Reuters, to bring this exciting new product to market.”
“We are now working closely with a number of other prospective members and expect to make further announcements as we secure new participants and trading starts,” added Cyril Théret, CEO of PLUS Markets Group.
The announcement closely follows the launch of PLUS Trading Solutions, a new unit developed by the market operator in conjunction with former Chi-X Europe COO Hirander Misra, which will offer matching engines that are designed to comply with the impending MiFID II and the European market infrastructure regulation.