Chicago Board of Trade (CBOT) chairman Charles Carey urged the Commodity Futures Trading Commission to conduct a full and careful review of the application by Eurex to establish a US subsidiary yesterday. Carey’s comments are the latest in an ongoing dispute, which has seen the CBOT and the Chicago Mercantile Exchange line up against Eurex.Speaking to the US House of Representatives’ Agricultural Committee, Carey criticised the “incompleteness” of Eurex’s application and the “lack of transparency” in the Swiss-German exchange's proposed US business model. He denied Eurex’s claim that the CBOT was a monopoly, and the claim that Eurex could deliver a fully electronic market-place.
“That is more ruse than reality," said Carey. "The fact is that the Eurex trading software is not capable of accommodating liquid and transparent options trading, complex futures trading or combination orders involving both futures and options,” he said.
Meanwhile Eurex, the world’s largest futures exchange by number of transactions, continued preparations for its US launch. It unveiled a three-year agreement with the National Futures Association (NFA) this week. The NFA will provide regulatory services, including trade practice and market surveillance, along with background checks on traders. The NFA has previously held similar arrangements through deals with commodities exchange The Merchants’ Exchange and Brokertec, an electronic bond trading platform. The deal includes automatic one-year renewals, according to Eurex officials.
Eurex also disclosed plans for its planned US exchange’s board of directors. At least six of its 12 members would be senior executives from across the US futures industry. Eurex said this should ensure the company operates as an entirely separate entity from its European parent.
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