BGC Group has confirmed that its FMX Futures Exchange will launch on 23 September, just one week from today.
The US interest rate futures exchange will initially launch with SOFR futures, with US Treasury futures incorporated in Q1 2025, the firm said.
FMX has been the source of great controversy thanks to the very public feud between BGC CEO Howard Lutnick and Terry Duffy, the CME CEO keen to defend his exchange’s hold over the interest rate futures market.
READ MORE: Duffy remains confident in face of FMX challenge
A particular bugbear of Duffy’s has been BGC’s clearing partnership with the London-based LCH, which he says will jeopardise markets and inhibit US regulators’ oversight. In CME’s Q2 earnings call earlier this year, he was confident that US regulators would prevent FMX from going ahead. Addressing this less than a week later, Lutnick stated in the BGC results call that “[We’re approved], no ands ifs or buts, and our expectation is: we’re opening in September”. Evidently, Duffy’s belief that the exchange would never make it off the ground was misguided.
READ MORE: “Complete misunderstanding … or try[ing] to baffle people”; Lutnick counters Duffy
In its announcement, BGC shared its expectations that clients will receive “significant capital savings thanks to the LCH clearing partnership. LCH holds US$225 billion of interest rate swap collateral securing its interest rate swaps, it continued, “against which LCH members expect to cross margin eligible U.S. interest rate futures traded on FMX Futures Exchange”.
FMX is backed by 10 equity owners, namely Bank of America, Barclays, Citadel Securities, Citi, Goldman Sachs, J.P. Morgan, Jump Trading Group, Morgan Stanley, Tower Research Capital, and Wells Fargo.
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