markets in the region. By becoming the fi rst Asian securities deposi- tory to offer this service, we strengthen and enhance ’s position as a leading fi nancial center.” “Together with SGX, we will be able to develop a tailor-made LSE Revamps Its Italian and U.K. Derivatives solution for Singapore in a very short time-to- Markets market. High quality collateral is scarce and increasingly expensive; The London Group has rolled out two initiatives making it available is also a top industry priority in Asia. SGX and to revitalize its futures and options . Clearstream will soon be able to jointly address this major industry In Italy, the exchange has launched a new set of single stock challenge for the Singapore and Asian markets,” said Jeffrey Tessler, futures that are cash-settled in order to help investors avoid double chief executive offi cer of Clearstream. taxation. Under Italy’s new fi nancial transaction tax law, which took effect with equities in March and with equity derivatives in Septem- ber, trades in physically settled single stock futures could incur taxes twice—once on the futures themselves and once on the underlying stock if held to expiration. In the U.K., LSE has completed its acquisition of Turquoise Deriv- Deutsche Börse Introduces Cloud-Based atives. The platform has been renamed the Service for Historical Market Data Derivatives Market and will operate as a regulated exchange rather Deutsche Börse on Sept. 30 announced the introduction of a than a multilateral trading facility. LSE says this will provide custom- new cloud-based service for the delivery of historical market data. ers with better and arrangements in light of the The new service, called Data on Demand, gives clients direct ac- requirements under the European Market Infrastructure Regulation. cess via the internet to historical trade data from trading venues in- LSE also has rolled out a new equity index , the cluding Eurex and Xetra as well as Deutsche Börse index data. The FTSE UK Large Cap Super Liquid index, and has signed up BNP service aims to reduce the latency time for obtaining data as well as Paribas and Timber Hill Europe to act as market makers. the infrastructure costs for the storage of large amounts of data. “This marks an important step in growing a strong, diverse derivatives “Cloud-based services like Data on Demand provide users with a business in the U.K.,” said Nicolas Bertrand, head of equity and deriva- cost-effective and effi cient option to meet their data needs without tives markets at London Stock Exchange Group. Bertrand also pointed directly investing in infrastructure,” said Sascha Rangoonwala, head to the roll-out of new products in the Italian market in recent months, of back offi ce data and services, Deutsche Börse. “Our new offering including durum wheat futures and single stock dividend futures. allows fi nancial analysts, developers of fi nancial applications and vendors to get fast and fl exible access to historical trading data for back-testing and analyses.”

SGX and Clearstream Explore Collateral Management Partnership CME Targets Nanosecond Accuracy and Clearstream, a subsidiary of Deutsche CME Group has announced a new service called “High Precision Börse, have signed a letter of intent to explore the launch of a col- Time” offered in conjunction with Perseus Telecom. Customers will lateral management service that will enable customers to use assets be able to synchronize their time systems across data centers where held at SGX’s securities depository for their collateral needs. Perseus offers this service, starting with CME Group’s data center in Under the agreement, SGX uses Clearstream’s collateral man- Aurora on the outskirts of Chicago. agement infrastructure to enable collateral to be allocated, optimized The service is aimed at trading fi rms and vendors that need and substituted on a fully automated and real-time basis. extremely precise time-stamps on market data. The service includes “We are pleased to partner with Clearstream in providing our cus- access to a National Institute of Standards and Technology-certifi ed tomers a collateral management offering which meets their needs at GPS antenna as well as Network Time Protocol (NTP) and Precision a time when they are increasingly concerned about risks and regula- Time Protocol (PTP) connectivity with nanosecond accuracy to the tory changes,” said Muthukrishnan Ramaswami, president of SGX. Coordinated Universal Time UTC timescale. “We will also work with Clearstream to expand this offering to other “We are committed to providing the CME Group trading commu-

56 Futures Industry | www.futuresindustry.com nity with the proper and relevant technology needed in a high-tech funds and electronic market makers. GMEX said its contract tracks datacenter environment,” said Craig Mohan, Managing Director, the real exposure to the changes in the interest rate swap curve Co-Location and Data Center Services for CME Group. “We have more accurately than existing swaps and swap futures. partnered with Perseus Telecom to make this service available to all customers located in Aurora at a time when regulatory changes and the need to have more precision in reporting trading events are crucial to sound risk management.”

Clarus Financial Launches Swap Index Derived from SDR Data CBOE Extends Trading Hours for VIX Futures London-based Clarus Financial Technology on Sept. 11 an- Responding to demand from European customers, CBOE Fu- nounced SDRFIX, a new index based on swap data sourced from tures Exchange has extended trading hours for CBOE volatility index DTCC’s swap data repository. The new index is based on actual futures to cover more of the European trading day. The extension, transactions sourced from DTCC DDR. which took effect in late October, follows several other initiatives “By releasing SDRFIX, which we believe is the first index deter- designed to boost the appeal of the VIX contract, including the mined only from transactions reported to an SDR, we are showing opening of a communications hub in London in February. the additional value that can be extruded from the reporting require- “Volatility traders have eagerly anticipated the expansion of ments,” said Amir Khwaja, chief executive officer of Clarus. “The trading hours for our highly successful VIX futures contract,” said financial industry has invested a lot of time and effort in complying Edward Tilly, the chief executive officer of CBOE Holdings. “We are with the Dodd-Frank Act and EMIR Directive requirements to report pleased to provide our European customers with the opportunity OTC derivatives transactions to an SDR. We believe the value of this to trade VIX futures during local trading hours, but we also believe investment should not be solely for the benefit of regulators.” our entire global base of VIX users will benefit by extended trading Clarus said it has benchmarked how SDRFIX performs over a hours.” period of time against the comparable ISDAFIX index. The index and The exchange extended the trading day in two ways—by begin- methodology are available to the public, it is based on cleared inter- ning the trading session five hours earlier and by adding 45 minutes est rate swaps with standard tenors and conventions and currently at the end of the day to provide a post- trading period. available for interest rate swaps in U.S. dollars, euro and British Trading hours for VIX futures now run from 2:00 a.m. through 3:15 pound sterling. p.m. Chicago time and then from 3:30 p.m. to 4:15 p.m. The index is determined daily at 11:00 a.m. EST and published by VIX futures have become an increasingly popular way for inves- 11:35 a.m. tors to take a position on equity market volatility, As of September, the number of VIX futures traded year-to-date had reached 30 mil- lion, 86% ahead of the previous year.

Telx Expands Data Center in NY Telx announced in September the addition of 69,000 gross square feet within its NYC1 data center located at 60 Hudson New Swap Futures Contract Introduced in Street in New York. The additional space expands Telx’s capacity in London the building by 71 percent. Telx now encompasses 620,000 gross Global Markets Exchange Group, a London-based company square feet across 6 facilities in the greater New York/New Jersey recently formed by Chi-X Europe Co-Founder Hirander Misra, has metro area. developed a new type of interest rate swap futures contract that it “We have experienced tremendous growth this year in the greater intends to offer for trading. GMEX did not disclose a launch date but New York/New Jersey metro area,” said Chris Downie, chief execu- said it has applied to the U.K.’s Financial Conduct Authority for ap- tive officer of Telx. proval and to U.S. regulators for patent protection on the contract. Telx, based in New York, provides interconnection and data The new product, called a constant maturity future, has been de- center services in strategic, high-demand North American markets. signed to address the complications for hedging interest rates that It serviced 13 U.S. markets with six facilities across the New York / arise from standard quarterly expirations. The contract is linked to a New Jersey Metro area, two facilities in Chicago, two facilities in Dal- proprietary index based on tradable interest rate swap inputs from las, four facilities in California, two Pacific Northwest facilities, and a diverse range of market participants including banks, investment facilities in Atlanta, Miami, Phoenix and Charlotte.

Futures Industry | November 2013 57