Cboe SEF Expands Offering with Two Newly-Listed NDFs

The newest NFDs to be included on Cboe SEF include the USD/Russian ruble (RUB) and USD/Peruvian Sol (PEN).

Cboe Global Markets, Inc. (Nasdaq: CBOE) has launched trading of several new non-deliverable forwards (NDFs) on its swap execution facility, Cboe SEF. This includes the support of two newly-listed NDFs following strong interest from buy-side firms.

In December 2017, Cboe SEF began supporting non-deliverable FX forwards. Since then, the expanded FX offering has grown to reflect the group’s broadest foray into the NFD market to date. Following today’s expansion, the SEF now supports trading for a total of twelve currency pairs.

Growing demand fueling offering

Bryan Harkins

The newest NFDs to be included on Cboe SEF include the USD/Russian ruble (RUB) and USD/Peruvian Sol (PEN). Bryan Harkins, Executive Vice President and Co-Head, Markets Division, at Cboe, commented: “We have seen success in trading non-deliverable forwards, which launched on Cboe SEF late last year.”

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Interest for NFD trading on the Cboe SEF has indeed increased since its inception. One of the main impetuses for the offering has been regulatory obligations surrounding the trading of NDFs. Dodd-Frank legislation stipulates that select market participants trade swaps on SEFs. To help reconcile these requirements, the group has facilitated this trading using proprietary CBOE technology, namely across emerging markets currencies.

“As we continue to build this new market, we have received strong interest from firms across the globe, particularly buy-side firms, many of which have been interested in trading these newly-listed currency pairs. We will continue to work with our customers to expand our currency pair universe to meet their diverse needs,” added Mr. Harkins.

While Cboe has not presently disclosed any plans to strengthen its NDF offering, the current demand for these instruments remains quite high. With volatility and emerging markets in focus in 2018, it is likely that Cboe SEF will see the support of an additional tranche of currency pairs in the near-future.

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