Eurex US, the Chicago-based futures market launched by the Swiss-German derivatives exchange has introduced a new package of trading incentives - including fee waivers and a revenue sharing programme - in an effort to boost flagging volumes.
Eurex US, which has been struggling to win market share from rival Chicago Board of Trade, says its new revenue sharing initiative will focus on high frequency smaller size trading for proprietary accounts. The programme will allow firms to share in 40% of Eurex US' 2005 revenues and 25% of 2006 revenues, up to $20 million each year. Two separate qualifying periods in 2004, the first beginning July 12, will be used to allocate 2005 revenues.
The exchange is also introducing a fee holiday for US Treasury futures for all market participants until the end of the year.
Eurex says it will additionally pay stipends to market makers who take on business during European trading hours, in a further effort to boost volumes from overseas.
Satish Nandapurkar, CEO of Eurex US, says: "This incentive plan reinforces our liquidity and will help to enhance the diversity of our order book."
Eurex is desperate to revive interest in its fledgeling US business, where average daily trading volume fell to 2578 contracts in May from 18,215 contracts at launch in February.
The Chicago Board of Trade remains scornful of Eurex' latest efforts.
Bernie Dan, CBOT president and CEO says the exchange is on course to post the most successful year in its history: "Our focus on offering customers the most superior technology available and our commitment to serving the broader interests of the marketplace define the CBOT's successful business model and explain why its imitators have been unable to launch an effective challenge to our highly liquid, transparent markets."