An official at Eurex pointed to regulatory changes as being behind the increase in volumes – particularly Ucits III, which extends the range of financial instruments that funds are able to invest in and introduces a ‘European passport’ system to facilitate cross border activity within the European Union. “In the past, single-stock futures were used to adjust for market inefficiencies or to bypass regulatory restrictions, such as stamp duty and missing or expensive stock lending facilities,” he says. “But recent regulatory changes, including particularly the implementation of Ucits III, have paved the way for the efficient use of delta-one derivatives.” In October 2005, Eurex listed futures on all components of the Dow Jones Euro Stoxx 50 and Dax indexes, as well as 10 components of the SMI Index. Eurex is the world’s largest futures and options exchange and is jointly operated by Deutsche Börse AG and SWX Swiss Exchange.
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