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LONDON (Alliance News) - London Stock Exchange Group PLC on Friday said it has teamed up with six major dealer banks and the Chicago Board Options Exchange on a new derivatives venture.
Together with Bank of America Merrill Lynch, Barclays, Citi, Goldman Sachs, JP Morgan and Société Générale, the London Stock Exchange and the Chicago Board Options Exchange are to create CurveGlobal. More shareholders are expected to join in the coming months.
London Stock Exchange Group will invest an initial GBP9.5 million in the venture, equating to about one-third of the expected total funding capital requirements for the venture, in exchange for an initial 31.67% stake. That shareholding is to fall to about 25% as new investors join.
Short-Term and Long-Term Interest Rate Futures will be offered in the first phase of the venture. Products are to be traded on the London Stock Exchange Derivatives Market, and cleared through London Stock Exchange Group's majority-owned clearing house LCH.Clearnet.
"Through CurveGlobal, LSEG and the investors aim is to provide a competitive offering in the interest rates futures market, delivering lower transaction costs," the exchange said in a statement.
CurveGlobal Chairman Michael Davie said: "Rate markets have undergone considerable change in recent years, and market participants are under ever-increasing cost pressures. Customers want to safely manage risk and to maximise efficiency which the compelling combination of CurveGlobal and LCH.Clearnet's portfolio margining will deliver."
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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