Crunch time for Eurex US

The board of Eurex agreed on Friday to give its troubled Chicago-based Eurex US operation a month's grace before the boards of the joint venture's owners, Deutsche Borse and the SWX Swiss Exchange, decide on its ultimate fate.

Eurex refused to discuss the details of Friday's meeting, saying the board was "discussing different options" on how best to position Eurex in the US. "This process should be completed in September," the company said. Deutsche Borse's interim chief executive Mathias Hlubek, meanwhile, said in an interview with a leading German newspaper last month: "I can rule out that we will withdraw from the US."

The US market represents a quarter of Eurex's total transactions, Eurex said. However, its attempt to serve this market in the US, rather than from Germany, has not gone well. Eurex US has faced heavy competition from the established derivatives exchanges, notably the Chicago Mercantile Exchange and the Chicago Board of Trade. In March 2005 it filed a second antitrust suit against its two rivals, claiming they had attempted to block its entry to the US market.

Eurex US was set up in February 2004 at a cost of up to €60 million, according to Hlubek. In late 2004 it broke the 100,000 trades-per-day barrier for the first time. However, this is still a small share of the US market: the Chicago Board of Trade reported 2.3 million trades a day in July.