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Eurex Total Return Futures get US approval

Release date: 14 Mar 2017 | Eurex Exchange

Eurex Total Return Futures get US approval

As of 13 March 2017, Eurex EURO STOXX 50® Index Total Return Futures (TESX) are certified by the US authority Commodity Futures Trading Commission (CFTC). Therewith, the products can now be offered to US persons via Eurex terminals with direct access in the US or sold to these customers. This extends the reach of the product significantly.

The US approval is the latest step in the successful introduction of Eurex Total Return Futures. Since their launch in December 2016, more than 83,000 contracts have been traded, representing 2.8bn notional. These figures show that the product meets the needs of market participants in the current regulatory environment.

"The US approval will be very good for current participants as it extends the range of users to US directional and global macro accounts, which can use the TRF to do longer-dated trades", says Stuart Heath, Director of product R&D at Eurex.

"This innovative product and implied repo as an asset class in its own right represents an exciting opportunity for US-based market players in the equity derivatives space," added Emmanuel Dray, head of equity derivative institutional sales & linear trading at BNP Paribas, which jointly developed the contracts. "We are happy to be a lead participant in the development of the TRF on EURO STOXX 50® in the US."

In line with current market convention, Eurex’ Total Return Futures trade in ‘spread’ basis points and allow the implied repo rate associated with cash basket replication to be traded for the first time. All maturities are actively quoted by market makers BNP Paribas, JP Morgan and Unicredit, assuring round-the-clock liquidity.