Eurex Postpones Entry to Currency Market on Settlement

Eurex, Europe’s largest futures market, postponed its entry to the foreign-exchange market after the bank it planned to use for access to the settlement system said it needed more time.

“The third-party service-provider bank that will give access to the continuous linked settlement system required for the settlement of FX futures and FX options has requested additional time to further strengthen the control framework,” Eurex said in a notice to members on Oct. 4. The document did not say when foreign-exchange trading would become available.

Deutsche Boerse AG-owned Eurex had intended to offer exchange-listed derivatives on the six currency pairs where the bulk of over-the-counter trading takes place from today. The exchange proposed futures and options contracts based on euro-dollar, euro-pound, euro-Swiss franc and pound-dollar, according to a notice on Aug. 20. It also planned contracts based on the pound-Swiss franc and dollar-Swiss franc pairs.

The company intends to benefit from increased volumes in currency markets and regulators’ insistence on greater transparency. Trading in the world’s biggest financial market averaged $5.3 trillion a day in April, according to the Bank for International Settlements.

Eurex, Europe’s largest derivatives exchange, wants to expand into an asset class dominated by its American rival CME Group Inc. CME has also delayed setting up its London-based European exchange offering currency derivatives.

Eurex plans to offer physical settlement of the derivative contracts through CLS Bank. When it opens, investors will be able to trade futures from 8 a.m. Frankfurt time to 10 p.m and options from 8 a.m to 7:30 p.m. The exchange will offer revenue sharing to increase liquidity, Eurex said Aug. 20.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE