CME Group Inc, the world's largest futures exchange, is pushing to expand its European business as it starts a new London-based market and IntercontinentalExchange Inc (ICE) advances its planned purchase of NYSE Euronext.
CME’s new London operation will compete with Deutsche Boerse AG (DB1)’s Eurex and Liffe, the largest derivatives venues in Europe. NYSE Euronext (NYX)’s London-based Liffe offers gilts, short-sterling and Euribor futures, while Frankfurt-based Eurex has contracts on German and French bonds. ICE announced plans to buy NYSE on December 20. Nasdaq OMX Group Inc (NDAQ) is also setting up a new European derivatives market called NLX.
Exchanges and brokers including CME are trying to win business and customers by capitalising on regulations that will push over-the-counter products onto electronic systems. The world’s biggest exchanges, including CME, ICE and Deutsche Boerse, also have their own clearing houses, which operate central counterparties that stand in the middle of trades to guarantee they are completed.
CME approached Frankfurt-based Deutsche Boerse (DB1) at the end of last year to consider talks on a merger, four people familiar with the situation said in February. Deutsche Boerse, which had its takeover of NYSE Euronext (NYX) blocked by European regulators a year ago, is hesitant about entering discussions, the people said. Deutsche Boerse has said it’s not in merger talks.
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