NYSE Euronext has agreed to acquire the CME Group’s metals business, with trading of gold and silver futures and options on futures contracts set to begin later this year on Liffe Connect,
NYSE Euronext has agreed to acquire the CME Group’s metals business, with trading of gold and silver futures and options on futures contracts set to begin later this year on Liffe Connect, NYSE Euronext’s derivatives trading system, subject to regulatory approval.
Precious metals derivatives currently trade on e-CBOT, an electronic trading platform managed by Atos Euronext Market Solutions and powered by Liffe Connect. As part of NYSE Euronext, precious metals trading will continue to be cleared at CME Clearing on an interim basis for up to one year, after which NYSE Euronext will provide an alternative solution.
Under the agreement, NYSE Euronext will acquire the CBOT Metals Complex, including its volume and open interest. The market was launched in October 2001 by the Chicago Board of Trade, which merged with the Chicago Mercantile Exchange last year to create the CME Group. CBOT will continue to act as the designated contract market for the products until NYSE Euronext establishes its own designated contract market.
‘The addition of CME Group’s precious metals market gives NYSE Euronext a point of entry into the US futures business,’ says Duncan L. Niederauer, chief executive of NYSE Euronext. ‘With Liffe, NYSE Arca Options and our pending acquisition of the Amex Options business, NYSE Euronext has a strong global derivatives franchise.’
Terry Duffy, executive chairman of the CME Group, says: ‘This transaction is beneficial for our current metal customers, and at the same time maintains the integrity of our exclusive agreement to list Nymex and Comex products on our CME Globex electronic trading platform.’
CME Group chief executive Craig Donohue adds: ‘We will work closely with NYSE Euronext to ensure a seamless transition in the trading of these products. With the continuation of the Liffe Connect technology and the retention of CME Clearing in the interim, we believe our customers will encounter minimal, if any, inconvenience.’
The precious metals market was the first all-electronic gold and silver complex with an electronic delivery system when it was launched in 2001. In 2007, the market traded some 11 million contracts, representing an average daily volume of more than 45,000 contracts from a highly focused product mix consisting of gold futures (mini-and full-sized), gold options, silver futures (mini-and full-sized) and silver options.
NYSE Euronext operates exchanges in six countries including the New York Stock Exchange, the world’s largest cash equities market, Euronext, the eurozone’s largest cash equities market, and Liffe, Europe’s leading derivatives exchange by value of trading, and offers a financial products and services for issuers, investors and financial institutions in cash equities, options and derivatives, exchange-traded funds, bonds, market data and commercial technology solutions. Its nearly 4,000 listed companies represented a combined USD30.5trn in total market capitalisation at the end of last year.
Formed by the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade, the CME Group comprises the CME Globex electronic trading platform as well as its trading floors. The group offers benchmark products in asset classes including futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, and alternative investment products such as weather and real estate.
