London Stock Exchange launches CurveGlobal to take on derivatives duopoly

Challenger: The London Stock Exchange wants to rival Liffe and Deutsche Börse

Reuters/Suzanne Plunkett

Nick Goodway16 October 2015

London Stock Exchange has teamed up with six bulge bracket banks and the Chicago Board Options Exchange to launch an interest rate futures market to rival Liffe and Deutsche Börse.

CurveGlobal will offer trading and clearing in short interest rate futures in Euribor and short sterling, and long term interest rate futures in German bonds and gilts.

For years Liffe and Deutsche Börse have held a duopoly in these markets which are worth billions of euros a day.

The £30 million venture, to which the LSE is giving £9.5 million, is backed by Bank of America Merrill Lynch, Barclays, Citi, Goldman Sachs, JPMorgan and Société Générale.

Xavier Rolet, the LSE’s chief executive, said: “We have a proven track record of partnering with our customers to deliver open access solutions that provide greater choice to the market as a whole.

“CurveGlobal is an exciting and innovative initiative for our customers.”

CurveGlobal hopes to undercut competitors by saving them costs on covering the risk of the futures through its ownership of clearing house LCH.Clearnet.