CME to Launch Euroyen Libor Futures under Mutual Offset

The Board of Directors of the Chicago Mercantile Exchange has approved a new Euroyen futures contract based on the London Interbank Offer Rate (LIBOR) calculated by the British Bankers Association. The new contract will complement the Merc's existing Euroyen contract that is pegged to the Tokyo Interbank Offer Rate (TIBOR), and will mirror the Euroyen LIBOR contract currently traded at the Singapore International Monetary Exchange (SIMEX). The contract will also be subject to the mutual offset system between the CME and SIMEX in which positions in selected contracts are fungible between the two exchanges. The CME will submit its Euroyen LIBOR contract to the Commodity Futures Trading Commission for approval and hopes to begin listing the new contract within weeks. The contract will be traded via open outcry alongside the existing Euroyen TIBOR contract during regular trading hours at both the CME and SIMEX. "There has been growing interest in the banking community to have a Euroyen contract pegged to interest rates set by London banks in addition to a contract based on rates set in Tokyo," said CME Chairman Scott Gordon in a statement. "This modified Euroyen contract will result in our customers having an even broader range of products from which to choose in determining how to hedge their interest rate exposure." SIMEX Chairman Victor Liew said "SIMEX is pleased with the addition of our new Euroyen LIBOR futures contract to the range of interest rate products under our mutual offset agreement with the CME. With the Euroyen futures contracts trading side-by-side and around the clock, the CME-SIMEX Euroyen market will provide the most comprehensive risk management for the Yen."