CME Group Customer Forum Q2 2014

Transcription

1 CME Group Customer Forum Q Hong Kong April 3, 2014 Seoul April 8, 2014 Singapore April 10, 2014 New York April 24, 2014 London April 30, 2014 Chicago May 14, 2014

2 CME Group Product Focus: FX (CNH/CNY) and Overview of CME Europe Malcolm Baker Senior Director Foreign Exchange and Interest Rate Products, Asia

3 Key Product Features At a glance 3

4 USDCNH OTC and CME USDCNH FX Futures Pricing from Kalahari. 4

5 Why trade CNH futures on CME Group? CME Group is the largest regulated FX marketplace in the world CME Group offers a successful global suite of 61 Futures and 31 Options contracts that is trading over US$123 billion daily We have the largest FX Futures trading community in the world Potential efficiencies when cross margining between CNH Futures and cleared OTC FX RMB products become available We have a diverse set of global clients 23 hours of global trading access across 158 countries Globex, our single point of access to trade multiple asset classes 5

6 Turnover by Currencies and Currency Pairs CME Launched USDCNH FX Futures 25 th Feb There are Two Contracts Standard $100,000 Notional and a $10,000 Notional. Only Exchange to offer 23 Hours a day Liquidity in USDCNH. USDCNH Launch complements the Existing CNYUSD Cash Settled Future. Current ADV around $25million Notional. 3 Designated Market Makers Obliged to Provide 30 to 60 Pips Bid Ask spread out to 12 months. Record Daily turnover $121 Million notional in 9 Month Part of Curve. Total USDCNH traded $1.36 billion Mainly in Back Dated ( deferred contracts ) Block Market Makers Provide Liquidity Outside Globex in Larger trades. CME Group s USDCNH Monthly Volumes Since Launch Product Month Volume Notional CNH APR $ 28,300, CNH MAY13 10 $ 1,000, CNH JUN $ 244,900, CNH JUL $ 29,000, CNH AUG $ 21,200, CNH SEP $ 93,400, CNH OCT $ 27,500, CNH NOV $ 18,700, CNH DEC $ 237,000, CNH JAN $ 16,100, CNH FEB14 52 $ 5,200, CNH MAR $ 191,200, CNH JUN $ 347,800, CNH SEP $ 101,400, TOTAL: $ 1,362,700,

7 CME USDCNH Versus a competing Exchange s Similar USDCNH contract Versus OTC USDCNH Forward Curves FX Market Turnover by Instrument & CME FX ADV Over Last 6 months CME CNH curve resembles the OTC CNH Curve. CME Bid/Asks Frequently Narrow to 10 pips in the 9 to 12 month Part of Curve. In billions of US Dollars ($) CME USDCNH Provides Access to Centrally cleared Forward Curve. Cost Per Ticket Cheaper than OTC. Transparency Sticky Open Interest Globex Reaches over 150 different Countries Market Making Opportunities Capital Efficiencies of Listed FX Futures. 7

8 Spread of CME s CNYUSD and USDCNH March 2014 Contracts over 20 days. Last 20 days have provided a trading Range of 200 Pips between the two CME Products. 8

9 Spread of CME s CNYUSD and USDCNH March 2014 Contracts over 20 days. Last 20 days have provided a trading Range of 200 Pips between the two CME Products. Between Dec 31 and Jan 17 the March 2014 Expiry ( approx. 2month ) Trades in Range of +450 to Traders and Hedgers can access liquidity in the Central Limit Order book via CME s Globex and also access via Block Market Makers on Demand. A simple Spread between CNYUSD March 2014 ( Cash Settled FX Future ) USDCNH March 14 ( Hong Kong Physically Delivered Contract ) Global OTC RMB growth at 100 % of Jan 2013 Traders potentially could exploit these differentials utilizing both CNY and CNH Liquidity in a 23 Market Place with the transparency of the CME s Globex CLOB. A Plethora of Block Market Makers are available on request. 9

10 FCM s / Brokers Offering Clearing in USDCNH ADM Barclays CitiBank ED&F Man FC Stone GH Financial HSBC Securities JP Morgan New Edge Philip Futures R J Obrien Interactive Brokers UBS Securities As of 21 Jan

11 CME USDCNH Sep 2014 contract versus a Competing Exchanges similar USDCNH Sep 2014 contract. Viewed as a spread one minus other. 11

12 Re: CME USDCNH Sep 2014 contract versus a Competing Exchanges similar USDCNH Sep 2014 contract. Between Nov 11 and Dec 05 the Sep2014 Expiry ( approx. 9month ) Trades in Range of +200 to +300 and back down to -50 pips difference At the same time the March 2014 contract difference from a competing Exchange to CME trades in a range of +/- 20 pips at widest. Traders potentially could exploit these differentials utilizing Forward Forwards in a more Capital Efficient manner. (Fwd fwd meaning Mar14/sep14 FX Calendar spread. Which synthetically creates a IMM forward Dated Starting and Ending OTC USDCNH FX Swap. A Plethora of Block Market Makers are available. 12

13 Currency Futures established in 1972 (IMM) CME FX Futures Average Daily Volume and Notional Value Average Daily Volume (in contracts) 1,300,000 1,200,000 1,100,000 1,000, , , , , , , , , , Notional Value (in billions of dollars) Driven by - Electronic markets, growth of buyside, CCP model

14 Growth of User Base 1,000 CME Group Foreign Exchange Futures Aggregate Number of Large Open Interest Holders* plus 5yr moving Average Source: CFTC *The CFTC defines large open interest holders as having at least 400 open 14

15 Why the Growth? 15

16 Customer segments that will benefit from hedging with CME s CNH futures Institutional investors QDII, QFII Commercial/Corporate doing import/export Global asset managers (ETFs, Portfolio Managers) International hedge funds with China exposure Offshore financial institutions Individual investors 16

17 RMB/USD Futures Contract Size Contract Month Listings Daily Settlement Procedure Position Accountability Trigger Level Position Limit Ticker Symbol Minimum Price Fluctuation (Tick) Alternatively CME Group offers a CNYUSD FX future 1,000,000 Chinese renminbi Thirteen consecutive calendar months plus 2 deferred March quarterly cycle contract months Daily RMB/USD Settlement Procedure (PDF) 6,000 contracts 2,000 contracts for Spot month*** CME Globex Electronic Markets: RMB View product and vendor codes $ per Chinese renminbi increments ($10.00/contract). $ per Chinese renminbi increments ($5.00/contract) for RMB/USD futures intra-currency spreads executed electronically. Trading Hours CME Globex (ETH) Sundays: 5:00 p.m. 4:00 p.m. Central Time (CT) next day. Monday Friday: 5:00 p.m. 4:00 p.m. CT the next day, except on Friday closes at 4:00 p.m. and reopens Sunday at 5:00 p.m. CT. CME ClearPort Sunday Friday 5:00 p.m. 4:15 p.m. Central Time (CT) with a 45 minute break each day beginning at 4:15 p.m. (CT) Last Trade Date / Time View calendar April June 2014 expiries: Trading ceases at 9:00 a.m. Beijing time* on the first Beijing business day immediately preceding the third Wednesday of the contract month (i.e., In Chicago, 7:00 p.m. CT on Monday night during the winter and 8:00 p.m. CT on Monday night during the summer). Starting with the July 2014 expiry: Trading ceases at 9:00 a.m. Beijing time* on the second Beijing business day immediately preceding the third Wednesday of the contract month (i.e., In Chicago, 7:00 p.m. CT on Sunday night during the winter and 8:00 p.m. CT on Sunday night during the summer). Exchange Rule Block Trade Eligibility Block Trade Minimum EFP Eligibility These contracts are listed with, and subject to, the rules and regulations of CME. Yes. View more on Block Trade eligible contracts. 50 Contracts Yes. View more on EFPs. 17

18 Global Contact Information for CME Group FX Products Do you have additional questions or need more information? Please contact a member of the FX team or visit CHICAGO: Craig LeVeille craig.leveille@cmegroup.com Simon Burnham simon.burnham@cmegroup.com LONDON: Will Patrick will.patrick@cmegroup.com SINGAPORE: Malcolm Baker malcolm.baker@cmegroup.com

19 Overview of CME Europe Malcolm Baker Senior Director Foreign Exchange and Interest Rate Products, Asia

20 CME Europe Update Launching April 27, 2014 CME Europe Limited ( CME Europe ) is a London-based Recognised Investment Exchange ( RIE ) supervised by the Financial Conduct Authority ( FCA ). Wholly owned subsidiary of CME Group with a dedicated Board of Directors and Management Team. Available via CME Globex, the world s leading electronic trading system, as its trading platform. CME ClearPort available to enter block & EFRP trades, amongst others, to bring them under the rules of the exchange and for clearing. Clearing services are provided by CME Clearing Europe, a Bank of England recognized and supervised London-based clearing house. 20

21 CME Europe Update Benefits: Exchange model designed to meet local needs and best accommodate regional trading practises while providing transparent price discovery and risk management solutions Simple membership structure & criteria with a low, one-off cost to join Simple and competitive pricing approach Market Data fee holiday for one year from launch; appropriate licensing required CME Europe Ltd is a UK registered company that operates under English law. Simple Membership Approach: Two types of membership: Clearing Members & Non Clearing Members (Trading Participants) Low barriers to participation: one-off fee to become a member and no annual membership fees Straightforward set of membership documentation Fee Incentive Plans linked to volumes and not to equity membership 21

22 CME Europe Update Day 1 Products: 30 currency pairs* 16 currency pairs, CLS eligible 14 currency pairs, non-cls physically or cash settled Biofuels Biodiesel: European FAME 0 Biodiesel fob ARA (RED Compliant) (Argus) vs. European Gasoil (ICE) Spread Calendar Future Biodiesel: European RME Biodiesel fob ARA (RED Compliant) (Argus) vs. European Gasoil (ICE) Spread Calendar Future Five additional products, subject to FCA product approval Biofuels, Biodiesel, Grain & Oilseed, Refined products **Customer & vendor mock testing on Saturday, April 26** *(subject to final regulatory approval of certain operational clearing conditions) 22

23 CME Europe Access via Europe-based brokers Leverages CME Globex, based in Chicago, as its matching engine: Utilises existing infrastructure of CME Globex Used by CME Group, BM&F Bovespa, Dubai Mercantile Exchange (DME), the Korea Exchange (KRX), the Minneapolis Grain Exchange (MGEX) and Bursa Malaysia Derivatives (BMD) Connectivity: Available via co-location in London, clearing firm in Europe or 3 rd party in Europe CME ClearPort is being utilised for entering block & EFRP trades Equinix LD4/LD5 Data Centre access now live in UK Multiple Channel Partners certified and offer access. LICENSING - We are in ongoing dialogue with regulators in Singapore, Hong Kong and Australia to be licensed. Global Account Management (GAM) team, a single point of contact for the onboarding process and ongoing etrading requirements 23

24 CME Europe - Access Multiple channel partners have been certified for CME Europe: Channel Partner ATEO Order Routing Market Data Bloomberg X Computer Voice Systems X CQG X X ONIX Solutions EPAM X X Drop Copy ION X X X Options City X X Trading Technologies Sungard X X X Global Account Management (GAM) team, a single point of contact for the onboarding process and ongoing etrading requirements X X X 24

25 CME Europe - Contact To find out more about CME Europe: Felix Carabello, Head of Strategic Sales, CME Europe, Felix.Carabello@cmegroup.com David Emerick, Strategic Sales, CME Europe, David.Emerick@cmegroup.com For further information about Foreign Exchange products from CME Group: Will Patrick, CME Group, EMEA FX Products, Will.Patrick@cmegroup.com Sandra Ro, CME Group, FX Research and Product Development, Sandra.Ro@cmegroup.com For CME Clearing Europe s services, becoming a clearing member, and our multi-asset class offering: Adam Husted, Executive Director, Clearing Solutions, adam.husted@cmegroup.com, For CME Europe market access please contact Global Account Management at: Gamemea@cmegroup.com in Europe at , or in Asia at

26 Disclaimer Futures and swaps trading is not suitable for all investors, and involves the risk of loss. Futures and swaps are leveraged investments, and because only a percentage of a contract s value is required to trade, it is possible to lose more than the amount of money initially deposited for a futures and a swap position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade. The information and any materials contained in this presentation should not be considered as an offer or solicitation to buy or sell financial instruments, provide financial advice, create a trading platform, facilitate or take deposits or provide any other financial products or financial services of any kind in any jurisdiction. The information contained in this presentation is provided for information purposes only and is not intended to provide, and should not be construed as, advice. It does not take into account your objectives, financial situation or needs. You should obtain appropriate professional advice before acting on or relying on this presentation. The information contained in this presentation is provided as is and without any warranty of any kind, either express or implied. This presentation may also include or link to information that has not been devised, verified or tested by the CME Group or its officers, employees or agents. The CME Group does not take any responsibility for that information, nor endorse its accuracy or completeness. The CME Group does not guarantee that the information, or the provision of the hyperlinks to you, does not infringe third party rights. If this presentation contains a link to an external website, the CME Group does not endorse, recommend, approve, guarantee or introduce any third parties or the services and/or products they offer. CME Group is a trademark of CME Group Inc. The Globe logo, E-mini, E-micro, Globex, CME and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. ClearPort and NYMEX are trademarks of the New York Mercantile Exchange, Inc. Dow Jones is a trademark of Dow Jones Company, Inc. All other trademarks are the property of their respective owners. All matters pertaining to rules and specifications herein are made subject to and are superseded by official CME, CBOT, NYMEX rules. Current rules should be consulted in all cases concerning contract specifications. In addition to the above, the information contained herein does not constitute the provision of direct access with any foreign financial instrument market or clearing services for foreign financial instrument market transactions defined under the Financial Instrument & Exchange Act (Law No. 25 of 1948, as amended). Copyright 26