Eurex to reintroduce fees for US futures traders
By Jeremy Grant in Chicago
Published: December 3 2004 03:01 | Last updated: December 3 2004 03:01
Eurex said on Thursday it would re-introduce fees for traders using its fledgling US futures exchange five months after waiving them in an attempt to boost volume.
The Frankfurt-based exchange launched its US futures operation in February but was forced to waive all fees after its rival the Chicago Board of Trade cut or waived most of its trading fees.
Eurex has struggled significantly to boost trading volume on its Chicago-based exchange, although fee waivers unveiled in July have helped attract some interest. The waivers were due to expire at year-end.
Eurex said volume on its US exchange reached a record 1m, compared with 59m contracts at the CBOT for all of its products.
Eurex US’s market share in US Treasury bond and note futures is around 4 per cent, with the rest traded at the CBOT.
It said that starting next year it would charge traders 5 cents per contract. Its original tiered fee structure, in place before the July waiver, set fees in a 10-25 cents range. Satish Nandapurkar, Eurex US chief executive, said the exchange had “started to reach a critical mass where more and more users are coming to us.”
Eurex currently offers only US Treasury bond and note futures, as well as options on those products.
Investors in Eurex’s US exchange include 17 US financial institutions, some of them among the largest bank brokerages.
Mike Manning, chief executive of Rand Financial - which does not use Eurex US - said of the new fees: “I don’t see it helping or hurting. They’ve got people that have bought into their platform and they will not be dissuaded from trading at that level.”
Mr Nandapurkar said the next product that would be offered would be futures on Russell stock indices. “We’re just finalising our plans on the Russell and we should have something to announce in the next few weeks,” he told the Financial Times.
While the new fees are likely to help generate some revenue for Eurex, the need for revenue is greater at its US-based clearing house, The Clearing Corporation.
Until it severed ties with the CBOT last year, it derived almost all its income from the Chicago exchange, which is enjoying the highest trading volumes in its 156-year history. November volume was 58 per cent higher than the same month a year ago. That is helping to generate clearing revenues for the CBOT, which this year forged a “clearing link” with former cross-town rival the Chicago Mercantile Exchange. |
