CME Europe

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CME Europe
Cme-europe-logo.png
Founded 2013; Closed 2017
Headquarters London, UK
Products FX, diesel, cocoa futures

CME Europe Limited was a London-based futures exchange that launched on Sunday, April 27, 2014, offering futures contracts in 30 different foreign currencies and biodiesel. The exchange and its clearinghouse, CME Clearing Europe, were closed in 2017 and their licenses from the U.K. Financial Conduct Authority and the Bank of England, respectively, were revoked on October 12, 2017.[1][2] It was the CME Group's first European exchange. The launch was originally scheduled for September 9, 2013 but was delayed while the exchange negotiated with regulators.[3] The exchange's contracts are traded on the CME Globex electronic trading platform and cleared through CME Clearing Europe.[4]

On April 12, 2017, CME Group said it planned to close the exchange and its clearing house, CME Clearing Europe, by the end of 2017. CME Group said it would work closely with market participants and regulators to ensure a smooth transition and an orderly wind down of business operations, including the provision of CME Group market alternatives for actively traded products on CME Europe.[5]

CME Group received approval for the exchange from the U.K.'s Financial Conduct Authority on March 11, 2014. [6] The exchange began by launching 30 FX futures products and seven biofuels products.[7]

The initial strategy and build-out was led by the late Robert Ray, who passed away in March 2014. In January 2015, former NYSE Euronext executive Cees Vermaas took over as CEO.

Trading Technologies International, Inc. was the first independent software vendor (ISV) to pass conformance with CME Europe to provide access to the exchange.

The exchange used the Libor interbank lending rate as a basis for its derivatives contracts.

John Lothian News Video

London Exchange View: CME Europe
Video from the John Lothian News special report, London: On a Pedestal.

History

CME Europe launched with 30 foreign-exchange futures products and a suite of commodities contracts.[8][9]

The exchange received regulatory approval from the Bank of England to launch FX futures in April 2014, a few days before the platform was scheduled to go live. [10]

According to a notice published on August 14, 2015, CME Europe was to select five trading firms to be a part of a year-long incentive program for market-makers in FX futures set to launch on October 1, 2015. The move was intended to boost liquidity in the contracts. In return for the liquidity provision, the exchange would pay a flat execution and clearing fee of one U.S. cent for all FX products listed. It also gave firms the option of an advance stipend to cover the cost of setting up a market-making practice on the exchange, or a monthly stipend to help with ongoing costs, or both.[11]

The exchange had a number of other incentive programs in place, including discounts for clearing members, a long-term revenue share program and a six-month liquidity provider program.

Products and Services

In November 2014 CME Group said it would launch a European swap future contract in early 2015, a move that would put CME Europe among several exchanges interesting in breaking into this new market.[12]

In April of 2015, CME Group launched trading in a new physically delivered cocoa futures contract.[13] On the first day of trading a total of 240 contracts traded through four delivery months out to March 2016, with most trades taking place in the new crop December 2015 and March 2016 contracts.

On June 16, 2015, CME Europe traded the first of its new European Power Contracts. The trade, comprising five megawatts (totalling 60 contracts) of German base load Calendar Year 2016, was brokered by GFI Brokers Limited, and involved Mercuria Energy Trading SA and Freepoint Commodities Europe LLP as the counterparts. CME had a suite of eight European Power cash-settled futures for the leading electricity markets, with base load and peak load available for Germany, France, Italy, and Spain.[14] They are available on CME ClearPort and CME Globex, and were distributed via the Trayport platform alongside other exchange products. The new power contracts are subject to the rules of CME Europe and cleared via CME Clearing Europe, CME Group's European clearing house.[15]

Key People

Cees Vermaas, CEO
William Knottenbelt, Senior Managing Director
David Feltes, Chief Operating Officer
Paul Richardson, Chief Regulatory and Surveillance Officer
Mark Spanbroek, Chairman

References

  1. Futures giant begins trading at its new London exchange. The Independent.
  2. Closing CME Europe and CME Clearing Europe. CME Group.
  3. CME Group delays London exchange launch. Reuters.
  4. Introducing CME Europe. CME Europe.
  5. CME Group Intends to Close CME Europe and CME Clearing Europe by Year-End. CME Group.
  6. CME Group Receives Regulatory Approval For Launch Of Its European Exchange. Mondo Visione.
  7. CME Group Appoints Cees Vermaas As Managing Director And CEO Of CME Europe Limited. CME Group.
  8. CME Europe Products. CME Group.
  9. CME delays London exchange launch for second time. Reuters via MrTopStep.
  10. CME Europe gets green light on FX futures. FOW Intelligence.
  11. CME out to tempt European market-makers. Financial News.
  12. CME Europe plans Q1 swap future launch. FOW.
  13. Cocoa Futures and Options. CME Europe.
  14. CME Europe Products. CME Europe.
  15. CME Group Announces First Trade of New European Power Contracts on CME Europe. CME Group.


Last modified on 28 February 2020, at 19:08