Newcomers are always looking to disrupt the status quo or add value to the marketplace. And CurveGlobal, a product development joint venture of the London Stock Exchange Group, CBOE and seven global banks, is planning to do both when it goes live later this year.
While much is being made of the LSEG’s potential merger with Deutsche Boerse, Curve Chairman Michael Davie told JLN at the FIA Boca conference that the company is focused on continuing its work to pull the initiative and its customer base together.
Curve, which is technically a product development vehicle, plans to go live in Q3.
“The priorities for this year, which are well underway, are getting live and getting liquid,” Davie said. “There is a choreography with the member banks, GCMs (General Clearing Member firms), FCMs, market makers, prop clients and obviously the regulators who have a role in this. And then the London Stock Exchange prepares and presents the exchange itself.”
Looking at how the market is made up today, Davie said there are a variety of participants that are attracted to Curve, each for different reasons. Banks are attracted to the margin savings they can achieve, Davie said, but it also has been moving to bring in market makers on day one, looking for opportunities to interact with that banking group. Prop trading firms have also been signing up, in their search for new trading venues and opportunities in the financial futures sector, along with buy-side firms.
Davie is hoping to draw all of those participants to trade Curve’s products, which wild be listed on the LSE Derivatives Market. The first products offered will be Short Term Interest Rate (STIR) and Short Sterling and Long Term Interest Rate (LTIR) futures in British pound and euros. Participants may also achieve major margin offsets on LSEG’s LCH.Clearnet’s portfolio margining service.
“If that proposition works as we believe it does, and if the Street is keen to realize efficiencies and savings, we should be very attractive,” Davie said. “I think the capital pressures that the Street is under, and the efficiency needs that they have, mean that the old ways of doing stuff…have changed beyond recognition.”