FIA backs Eurex US launch

FIA backs Eurex US launch

The Futures Industry Association (FIA) has come out in support of Eurex's plans to set up a US futures exchange, despite continued opposition from Chicago's Merchantile Exchange (CME) and Board of Trade (Cbot).

In a statement, John Damgard, president of the FIA, called the decision by Eurex to establish an Exchange in Chicago as a logical step in "the natural evolution of the international derivatives marketplace".

Furthermore, Damgard states that a significant number of non-US customers will choose to trade Eurex products through the new Exchange and "billions of dollars that otherwise might be transferred overseas to support trading on Eurex will remain in US clearing banks."

"This is good news for the US derivatives industry, good news for Chicago and good news for the US economy generally," he adds.

Last week Frankfurt-based Eurex filed an antitrust lawsuit against CME and Cbot, claiming that the Chicago exchanges illegally attempted to block its entry to the US market.

The suit alleges that the exchanges violated the antitrust Sherman Act by offering financial inducements - valued at over $100 million - to shareholders of The Clearing Corporation to vote against a restructuring of the company.

At the vote, due to take place on Thursday, shareholders will be asked to decide on a restructuring that would allow Eurex to become a shareholder in the clearing house - a crucial step in its plans to set up a new Exchange.

Following Eurex's legal action, US regulator the Commodities Futures Trading Commission (CFTC) rejected its application to become a US Exchange under its fast-track programme, saying more time was needed for public comment. In his statement Damgard criticised the move, saying the CFTC had approved the applications for four new contract markets - OneChicago, Nasdaq-Liffe, Island Futures Exchange and CBOE Futures Exchange - all without requesting comment from the public.

Both Cbot and CME denied Eurex's allegations and, in open letters to the CFTC, have urged the regulator to reject Eurex's application.

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