Eurex US, Europe’s attempt to capture Chicago

In January 2003, German-Swiss derivatives giant Eurex announced plans to launch a U.S. futures market that would compete against the Chicago Board of Trade—its one-time partner—in the U.S. Treasuries arena.

Launched a year later, Eurex US runs on its proprietary a/c/e platform, which the CBOT abandoned to adopt Euronext’s Liffe Connect.

Eurex US debut has been less smooth than its successful Frankfurt-based parent had hoped for. Obtaining U.S. regulatory approval took longer than expected and a partnership with a number of Wall Street gathered in Exchange Place Holdings, has not resulted in much order flow. The Exchange Place partners were investors in the failed BrokerTec Futures Exchange.

An important part of Eurex US’s strategy was to offer clearing on either side of the Atlantic, another project that was faced with regulatory hurdles. The exchange’s Global Clearing Link started operating in mid-November 2004 and is expected to boost cross-border clearing efficiency.

The Global Clearing Link is also expected to lead to a more efficient use of capital through portfolio margining and the use of a common pool of euro- and dollar-denominated collateral.