Eurex To Launch U.S. Exchange

Eurex, the international derivatives market is expanding its existing U.S. business to include products based on U.S. underlyings. On Thursday, the company announced plans to launch a registered U.S. exchange operated under U.S. regulation in order to offer a full range of derivatives on U.S. interest rates, indexes and equities. It said it has been in advanced talks with regulators and market participants to prepare this launch. Through the new U.S. exchange Eurex adds another step to its successful global growth strategy by directly entering the market based on U.S. underlyings thereby expanding its global benchmark range into U.S. products.

This move was started with the restructuring of the a/c/e alliance with the Chicago Board of Trade (CBOT) in July 2002: Eurex and CBOT had agreed to shorten the remaining term of the a/c/e alliance from October to January 2004 and to eliminate by the same date all product and co-operation restrictions previously in place until 2008. This liberates Eurex to fully compete in the U.S. market in all products and to establish new partnerships. Eurex CEO Rudolf Ferscha said: "Eurex will offer a full range of U.S. fixed income, equity and index products to customers worldwide in early 2004."

Eurex has developed and operated the successful a/c/e trading platform which trades more than 70 percent of all U.S. bond futures already. a/c/e and Eurex utilize the same trading platform and the global Eurex network. Eurex will continue to use this infrastructure for the new exchange. Currently a/c/e has over 150 members linked to the system and out of the 430 Eurex members 72 are based in the U.S. In 2002 a total of 130 million contracts were traded on a/c/e, making it the second largest electronic platform in the U.S., and 801 million contracts changed hands on Eurex, the world´s largest electronic market.

With the launch of the new exchange customers will benefit from a market model that establishes a level playing field for all participants as well as open access, seamless integration of OTC market and a low cost pricing structure. These features have helped Eurex to develop the European market in bond futures from a level of 35 percent of the U.S. market in 1997 to 170 percent in 2002, creating unprecedented levels of access and liquidity. Since all products and services will be available through existing infrastructures, customers will be able to use them without migration costs. Rudolf Ferscha emphasized: "Our customers worldwide will be able to leverage their existing Eurex and a/c/e infrastructures to benefit from low cost open access to the full range of U.S. and European products."

Eurex currently operates the world's most liquid fixed income markets, with 450 million contracts traded in the 2, 5 and 10 year euro interest rates. At the same time, Eurex is the leading exchange in European index products with a market share of over 70 percent. Furthermore, in the equity options business Eurex has traded contracts with an underlying value of 583 billion in 2002, making it the largest equity options market worldwide.