The Chicago Mercantile Exchange (CME) has slashed transaction fees for all products traded electronically on Globex in Europe, bringing its costs in line with rivals the Chicago Board of Trade (CBOT) and Eurex. However, the cut of 73% to 44 cents, from the current fee of $1.60, for e-FX futures and options contracts is available only for 18 months and will not be applied to brokers acting for third parties.The CME said it will also establish six new telecommunications hubs in European financial centres to reduce the transatlantic communications charges Globex users incur.
Craig Donohue, who will become chief executive of the CME on January 1 2004, said the e-FX contracts are growing fast on Globex, with 46% of forex trading completed through the platform in the thrid quarter. “This new low-fee structure will pave the way for further European initiatives,” he said.
Transaction fees for eurodollar futures and options and e-mini stock index futures and options will also be cut to 44 cents from $1.44 and $1.14 respectively.
Competition between the CME, the CBOT and Eurex derivatives exchanges has been increasing since Eurex announced plans to launch a US exchange earlier this year. The CME and the CBOT both oppose the plan, which has still to receive official approval, before its planned launch on February 1 2004.
The CBOT transaction fees range from between $1.25 and 15 cents for electronically traded financial contracts. Eurex charges between €1.10 ($1.30) and 20 cents per derivatives contract traded, with lower fees for market makers.
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