In partnership with JPMorgan, London-based derivatives exchange Liffe is introducing for the first time a bespoke product on Bclear, its processing and clearing system for wholesale equity derivatives.
The JPMorgan IPOX Europe 50 Index Futures contract is based on the IPOX Europe 50 Index, which measures the share price performance of the top 50 European companies drawn from the underlying IPOX Composite Europe Index, a benchmark for the performance of European IPOs and spin-offs.
The top 50 companies, which are ranked quarterly by market capitalisation, are listed on the Athens, Madrid, Copenhagen, Euronext (Amsterdam, Brussels, Paris and Lisbon), Frankfurt, Helsinki, Irish, London, Luxembourg, Milan, Oslo, Reykjavik, Stockholm, Swiss, Vienna and Virt-x stock exchanges.
According to Liffe, the launch on September 10 marks the next step in the development of Bclear, in which Liffe will work with member firms and their clients to create sponsored products alongside the existing portfolio of standard derivatives contracts. The JPMorgan IPOX Europe 50 Index Future is available to all Bclear users and their clients.
'We are delighted to meet JPMorgan's need for this innovative product,' says Liffe chief executive Hugh Freedberg. 'We hope to see Bclear becoming a vehicle for a wider variety of bespoke products tailored to the needs of individual member firms and their clients, and we welcome approaches from any of our customers who would like to investigate a similar partnership.'
Adrian Valenzuela, head of equity derivatives investor sales for Europe, the Middle East and Africa at JPMorgan, says: 'Bclear combines the flexibility of trading OTC with the efficiency and credit control of trading on-exchange, giving us the best of both worlds. We are pleased to be able to launch this index future on Bclear in conjunction with Liffe and see this as the start, with many more JPMorgan indices to come.'
JPMorgan has licensed rights to the IPOX Europe 50 Index, which was developed by IPOX Schuster and is maintained and calculated by Standard and Poor's. IPOX Schuster is an independent, research-driven financial services firm specialising in financial products design related to initial public offerings, with an underlying philosophy that involves classifying IPOs as a separate equity sector for a substantial period of time in aftermarket trading.
'We are pleased to team up with JPMorgan and Liffe to make the index available as a derivatives contract,' says Dr Josef Schuster, chief executive of IPOX Schuster, which owns a global series of 17 IPOX IPO indices. 'This is the first product of its kind in Europe, offering a scaleable opportunity to participate in the performance of the highly dynamic European IPO and spin-off sector.'
Liffe is the derivatives business of Euronext, part of NYSE Euronext, comprising derivatives markets in Amsterdam, Brussels, London, Lisbon and Paris. Business worth more than EUR1.6trn is traded through Liffe every day, making it the world's second largest derivatives exchange by value of transacted business.
Bclear, which is operated by Liffe Administration and Management, is part of a trio of wholesale services offer by Liffe, Afirm, Bclear and Cscreen. Bclear provides a low-cost means of processing and clearing wholesale equity derivatives within the framework of an exchange and clearing house. Users can register OTC business as an exchange contract for futures and options on more than 700 European and US blue-chip stocks and 13 indices. Variance futures on the FTSE 100, CAC 40 and AEX indices are also available.