Eurex US has introduced an incentive programme to increase activity in US Treasury futures. A new revenue sharing initiative focusing on high frequency smaller size trading for proprietary accounts begins on 12 July.
The programme allows firms to share in 40 per cent of Eurex US’s 2005 revenues and 25 per cent of 2006 revenues, up to $20 million each year.
Two separate qualifying periods in 2004, the first beginning July 12, will be used to allocate 2005 revenues. Each qualifying period will count towards 20 per cent of 2005 revenues up to $10 million, with a minimum of $5 million per period.
Another component of the programme is a fee holiday for US Treasury futures for all market participants until the end of the year.
Additionally, with Eurex US recently obtaining regulatory authorizations in eleven European countries, most recently in the United Kingdom, it is introducing a European trading hours market making programme.
Eurex hopes the European market making program will incentivize participants to provide liquidity during European trading hours from 9:00am to 2:20pm CEST (2:00 am to 7:20 am CST). Currently, market makers on Eurex US are active between 7:20am and 2:00pm CST. Eurex US is also enhancing all of the market maker programmes to include stipends for complying market makers.
“Customers have been very supportive of Eurex US and with the receipt of regulatory approval in the UK, the exchange can now connect the European and US customer bases in U.S. Treasury futures,” says Satish Nandapurkar, CEO of Eurex US. “This incentive plan reinforces our liquidity and will help to enhance the diversity of our order book.”
Eurex US opened its market for trading on February 8, and currently lists futures and options on 2-, 5- and 10-year Treasury notes and on 30-year Treasury bonds. Pending approval of international regulatory authorities, Eurex US will expand its offering to include trading in futures and options on Euro-denominated interest rate and index products. These products will include the Bund future, the world’s most heavily traded futures contract, Bobl and Schatz futures, as well as products on the leading European indices DAX and DJ EURO STOXX 50.