LSE Group shuts derivatives platform as CurveGlobal Markets fails to woo traders

London Stock Exchange Group is set to shutter its CurveGlobal Markets platform amid a lack of trader appetite for the derivatives exchange.

LSEG first announced it would launch the exchange in 2015. A host of banks, from Barclays, Citigroup and Goldman Sachs to JP Morgan and Societe Generale all backed the project with around £30m in funding, as the LSE looked to rival continental exchanges by building a fully-fledged futures market.

LSEG roped in a powerhouse top team to lead the venture, with Morgan Stanley veteran Andy Ross taking on the chief executive role and the likes of JP Morgan’s Bruno Nehmé serving on its board.

CurveGlobal Markets officially launched on 26 September 2016, with an offering that included short-term interest-rate futures in Euribor and Short Sterling and long-term interest-rate futures in Bund, Bobl, Schatz and gilts.

However, a notice published on LSEG’s website late on 21 September confirms that some markets, including German government debt and long-dated UK gilt futures, currently have no open positions, so will be shut immediately.

The remainder of the market will close on Friday 28 January 2022, with users still able to trade short-term interest rate derivatives such as sterling and Euribor futures until that time.

No trading fees will apply until the final day of trading.

READ LSE’s CurveGlobal comes out fighting on day one

CurveGlobal Markets will work with members firms to manage the transfer or closure of all open interest in these contracts as efficiently as possible,” an LSEG spokesperson said. We encourage member firms to trade out of open positions ahead of the final trading day. ”

Intercontinental Exchange and Deutsche Börse’s Eurex, continue to lead the market in trading in shorter and longer-dated fixed income futures.

LSEG’s competitors have also found it hard to rival their dominance in the derivatives exchange space. Nasdaq’s European interest-rate futures business lasted only four years before it too was shuttered in 2017.

READ Derivatives challenger raises £20m to take on ICE and Deutsche Börse

CurveGlobal Markets turned to its bank backers again in 2018 to raise another £20m to support new products, including the launch of futures linked to the Sterling Over Night Index Average, and then another £20 the following year, as trading volumes continued to lag Europe.

While CurveGlobal Markets saw some 5.6 million interest-rate derivative contracts change hands over the first 11 months of 2019, this was still only around 1% of the amount traded on ICE Futures Europe and Eurex respectively.

To contact the author of this story with feedback or news, email Justin Cash

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