Chicago Mercantile Exchange (CME) is reducing the cost of its Globex electronic trading customer fees in a bid to increase the number of dealers using the system to trade its benchmark products.
Effective from 2 September, the Exchange will reduce fees associated with calendar spread 'rolls' in its E-mini stock index contracts for accounts from $0.50 to $0.10 per side. As a result, the overall customer rate for these roll trades, when executed as a spread, will be reduced by 35% from $1.14 to $0.74 per side.
At the same time, CME is reducing electronic trading fees for its flagship Eurodollar contracts and other interest rate products by 60% for members, clearing members and their affiliates.
In addition, the Exchange will establish a marketmaker programme for Eurodollar futures traded on Globex during non-floor trading hours. To participate, dealers will be required to post bids and offers in designated Eurodollar futures contracts during non-floor trading hours. Participants will have Globex system fees waived for these hours and will also be eligible for a waiver of connectivity fees up to a maximum of $2500 per month for the duration of the programme. Those meeting all eligibility criteria for the full year of the programme will have non-floor trading hour fees waived for an additional year.
Furthermore, CME is to reduce Globex fees for members, member firms and lessees - or those conducting the vast majority of Eurodollar trades - from $0.25 per side to $0.10 per side. This fee cut applies to firms facing interest rate risks from lending and borrowing, their activities as dealers in OTC interest rate swaps and structured derivatives products and proprietary trading activities. There will be no change to clearing fees.
Exchange president and CEO, Jim McNulty, says: "In our experience, increasing the attractiveness of our electronically traded products has enhanced the appeal in open outcry as well: "In the case of our E-mini equity products and foreign exchange, we have significantly grown the electronic trading business while maintaining or growing the trade in open outcry."
The new pricing schedule is expected to be implemented before the end of the third quarter.