Eurex, the International Securities Exchange (ISE), and The OptionsClearing Corporation (OCC) plan to create a transatlantictrading and clearing link that will allow Eurex customers to access ISEs options market using their existing Eurex connections.
Through this link, Eurex members will have access to the full range of options products available at ISE and be able to execute orders in the ISE order book using their existing connectivity to Eurex.
As part of this initiative, ISE, Eurex and Eurex Clearing, the clearinghouse of Eurex, have signed a Term Sheet with the OCC, the central counterparty for all US listed securities options contracts. This Term Sheet is the first step toward signing a definitive agreement that will enable Eurex customers to clear contracts traded via the link to ISE through their existing clearing accounts at Eurex Clearing.
Eurex, ISE and OCC expect the transatlantic link will be implemented by the second half of 2009, subject to all necessary regulatory approvals.
“By establishing the first modern transatlantic trading and clearing link between the US and European options markets, our customers will benefit from full and seamless access to the worlds largest equity options market. Eurexs established trading and clearing distribution will greatly simplify US market access for our customers and generate additional trading volume. We are very pleased to expand Eurexs product coverage through this link and deliver a key component of the cross-selling revenue synergy opportunities that we identified from our combination with ISE,” says Andreas Preuss, CEO, Eurex.
“This connection will significantly broaden the distribution of the approximately 2,000 options products currently traded at ISE. We are excited to extend our reach internationally to Eurexs global customer base. As a result of the link, ISE members will also benefit from interaction with a new set of order flow providers who will deepen the liquidity pool on our exchange,” adds Gary Katz, CEO, ISE.
“This link will expand distribution and increase the reach of the optionsproduct. Non-US market participants will now find it easier to tradeand clear US products that will be offered through this link,” says Wayne Luthringshausen, chairman and CEO, OCC.
Eurex currently has approximately 400 exchange members while ISE hasapproximately 170 members. The two membership bases are complementary, with a current overlap of only 16 firms.