Nasdaq claims clearing costs ‘half of CME’
Haglind: greater transparency will be NFX’s unique selling point
Clearing costs at Nasdaq’s new NFX futures venue will be half those on rival CME, the exchange claims. NFX is due to launch later this summer.
Nasdaq NFX is a US-based designated contract market offering futures and options, initially based on futures benchmarks but later due to be expanded out to other products. One of the key selling points of the new venue is that the clearing services will be provided by specialist company the Options Clearing Corporation, rather than the integrated clearing house model provided by CME. The OCC, founded in 1973, claims to be the world’s largest equity derivatives clearing organisation.
“Why should you pay more, depending on what you’re clearing?” said Magnus Haglind, vice president of global transaction and market services and head of US commodities at Nasdaq. “Why pay two cents to clear one product, and pay two dollars to clear something else? Of course, on an integrated trading and clearing model, you don’t even know how much you paid for clearing. We are about bringing transparency, so that people do know.”
By setting a new futures trading venue, Nasdaq aims to benefit from the futurisation of derivatives markets, as new rules making uncleared bilateral trades more expensive push trading activity towards alternative hedging tools, such as futures. Founding market participants include ABN Amro, Advantage Futures, Goldman Sachs, JP Morgan, Morgan Stanley and Virtu Financial.
NFX will use Genium INET for its trading platform, and will be based in Chicago. The platform provides open and neutral access, and firms will be able to access the market through proprietary order management systems, broker platforms, and independent software vendors.
Nasdaq Futures is due to launch later this summer and is currently onboarding users for testing.
