Eurex dismisses imminent US expansion rumours

European derivatives exchange Eurex today dismissed rumours that it is accelerating its strategy to expand in the US.

A Frankfurt-based Eurex spokesman said the exchange’s situation with regard to the US has not changed since July, when it restructured an exclusive agreement it had with the Chicago Board of Trade (CBOT) to give Eurex customers access to dollar-denominated derivatives. The restructuring meant that Eurex was free to enter agreements with other US exchanges.

However, a Eurex spokesman dismissed press reports earlier this week that the exchange is gearing up for a big US expansion. “The story hasn’t changed since July,” said the spokesman.

One report claimed that Eurex is in talks with a number of US options exchanges, including the San Francisco-based Pacific Exchange.

Co-operation between the CBOT and Eurex began in October 1999 with the a/c/e (alliance/CBOT/Eurex) initiative, which was designed to give European customers access to CBOT products while providing the Chicago exchange with an electronic trading capability. But in July, Eurex acquired full ownership of the electronic trading platform, effectively ending the three-year partnership agreement that saw the European exchange publicly criticise its Chicago partner for failing to invest in the electronic trading system.

The exchanges agreed on new contractual arrangements that resulted in the CBOT paying Eurex a non-exclusive licensing fee for the use of a/c/e. The CBOT waived its co-ownership rights and was relieved of any obligations to fund development costs.

At the time, Rudolph Ferscha, chief executive of Eurex, admitted that the original agreements were too exclusive and too restrictive. “The two exchanges were getting in each other’s way without gaining anything,” Ferscha said.