FTSE 100 index futures will be available to trade on Turquoise Derivatives, the pan-European derivatives business of cash equities multilateral trading facility Turquoise, from the first week in June, subject to approval by UK regulator the Financial Services Authority.
In preparation for the launch, existing EDX and Turquoise customers, independent software vendors and general clearing members are already testing the upgraded SOLA platform.
The SOLA platform is co-located next to the cash equity markets of Turquoise and the London Stock Exchange (LSE), which acquired a majority stake in Turquoise on 18 February 2010.
Turquoise Derivatives will employ a maker-taker tariff model, offering a £0.05 pence per contract rebate for passive flow and a £0.20 pence per contract fee for aggressive flow. This compares with a standard £0.25 pence per contract charge on alternative platforms. The venue claims to be the first to cap charges for over-the-counter block trades in index futures products and to reduce per-contract clearing costs which it says will be one third lower than competitors' charges.
Adrian Farnham, CEO of Turquoise said: “Participants are crying out for a genuinely competitive derivatives market in Europe, and Turquoise Derivatives is proud to be leading the charge in making that a reality. Brokers see this as a real opportunity to provide access to end-investors. We will build a competitive and open framework that will challenge the existing approach of other markets, bringing new trading opportunities and improved efficiencies to our customers.”
The integration of the LSE's EDX derivative market into Turquoise, to create Turquoise Derivatives, will complete at the beginning of May. This will provide Turquoise with a derivatives platform upon which to develop a pan-European offering whilst continuing to add further emerging markets products.
Turquoise Derivatives will use the model established by EDX, whereby CC&G provides clearing services and clearing technology and LCH.Clearnet provides central counterparty services. Subject to the granting of appropriate consents, under this arrangement Turquoise is aiming to offer fungibility and/or margin offset with products traded on other markets that are likewise pro-competition.