The Chicago Board of Trade (CBOT) has responded to competition from Eurex by introducing a “permit programme” designed to make it easier for European market participants to trade financial, stock index and commodity derivatives on its electronic platform. CBOT also cut exchange fees by 50 per cent.
Qualified e-cbot member firms, including European proprietary trading firms and trading arcades, now have the ability to trade on CBOT’s electronic platform, without owning or leasing a seat, until 31c July 31, 2005. Exchange fees for e-cbot firms that take advantage of the permit program will be reduced by 50 per cent, from 90 cents to 45 cents per side. Additionally, e-cbot permit program participants will have the opportunity to qualify for a temporary waiver of the CBOT’s 15 cent per side delegate surcharge.
“The e-cbot permit program is evidence of the CBOT’s aggressive approach to increasing the exchange’s presence throughout Europe and the rest of the world,” says CBOT Chairman Charles P. Carey. “The CBOT, which is already a leading exchange globally, saw an explosion of volume in 2003 and set an all-time annual trading record. With the e-cbot permit program, even more European traders will have the opportunity to access the CBOT’s cutting-edge technology and deep pool of liquidity through our transparent and open markets.”
Scheduled to begin on 1 February, the e-cbot permit programme requires participants to have a clearing relationship with a CBOT clearing member and register for the e-cbot program with the CBOT by 31 March. Brokers for third parties are not eligible for the permit program. Those entities that are eligible for the e-cbot permit and choose to begin leasing a Full or Associate Membership or purchase an Associate Membership by 31 March will be eligible for a temporary waiver of the delegate surcharge. This 6-month delegate fee waiver will expire on 31 July. Exchange fees for e-cbot member firms that lease a full or associate membership will be reduced by 66 percent, declining from 90 cents to 30 cents per side.