CBOE Takes Minority Stake in Interest Derivatives Venture CurveGlobal

CBOE Holdings has engaged in the venture with the hopes of securing growth in the longer term that will justify

CBOE Holdings, Inc. (NASDAQ: CBOE) is slated to take a minority investment stake in CurveGlobal, an interest rate derivatives venture of the London Stock Exchange Group (LSEG), as well as a number of major dealer banks, according to a CBOE statement.

In the most immediate timeframe, CBOE’s investment in CurveGlobal will not be substantiated from a financial perspective strictly speaking, per company officials. However, CBOE is engaged in the venture with the hopes of securing growth in the longer term that will justify its present investments. At the present, the financial terms of CBOE’s current investment were not disclosed.

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With a vitalizing investment stake via CBOE, CurveGlobal will be initially offering trading in Short Term Interest Rate (STIR) futures in both Euribor and Short Sterling and Long Term Interest Rate (LTIR) futures across such instruments as Bund, Bobl, Schatz and Gilts. The company has also alluded to the rollout of an expanded product suite moving forward, most likely after its initial launch.

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Moreover, CurveGlobal’s product suite was engineered and supported for trading on LSEG’s wholly owned subsidiary, London Stock Exchange plc’s London Stock Exchange Derivatives Market, cleared through LCH.Clearnet. Pending the requisite regulatory approvals, the exchange is expected to launch as recently as Q2 2016.

According to CBOE Holdings CEO, Edward T. Tilly, in a recent statement on the investment and upcoming launch, “CBOE’s investment in CurveGlobal provides our company with a stake in an innovative venture that responds to a growing need in the marketplace. CurveGlobal represents a unique value proposition for interest rate futures users, and CBOE is pleased to be its U.S. anchor exchange. We look forward to leveraging our trading and product development expertise to help CurveGlobal drive new trading opportunities and marketplace efficiencies.”

Earlier this month, CBOE Holdings reported its volumes for the month ending September 2015. During September, the group reported a total trading volume for options contracts on Chicago Board Options Exchange, C2 Options Exchange, and futures contracts on CBOE Futures Exchange of 104.0 million, plunging lower by -16.9% MoM from 125.2 million contracts in August 2015.

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