CurveGlobal Market Open
Groundbreaking new interest rate derivatives venture CurveGlobal, launched by LSEG in conjunction with a number of major dealer banks and the Chicago Board Options Exchange, provides one of the most powerful examples yet of our Group’s open access philosophy in action.
In this short film, recorded around the London Market Open ceremony held on 26th September 2016 to mark the venture’s launch, key members of CurveGlobal’s leadership team explain why they see this as such a revolutionary step forward in derivatives trading. And joining them to provide their own perceptive insights are senior representatives of other CurveGlobal stakeholders.
"What Curve is trying to do is something that is unique. It is trying to revolutionise the market. And what we’re doing there is trying to crash together OTC and listed derivatives. These vertical siloes that exist – if you have to trade bonds you go to Germany, if you have to trade gilts you come to London, and you have OTC that exists in this separate pool – what Curve is aiming to do is pull all that together. And that is because it solves problems for our customers."
(Andy Ross, Chief Executive, CurveGlobal)
"Currently in the world today, there is very inefficient margining in the sense that, because of the siloes that exist where you’re doing your bond futures in one place, your STIR futures in another, but your OTC derivatives are in LCH, you’re essentially margining three ways in what could be a very risk-flat position. Curve, through offering clearing into LCH, will provide the ability to put the futures and the OTCs in one single place, and realise the capital benefits – the initial margin savings – that those represent."
(Somerset Pheasant, Goldman Sachs)
"Now’s the right time to launch a venture like Curve, that attempts to pull all of that disparate risk in different currencies together; to unleash the amount of capital that can be deployed; to allow people to do more trading with the same amount of capital."
(Richard Walker, Head of Business Development, CurveGlobal)
"Really, the end users – the asset managers, insurance companies and pension funds – will in time, we hope, find this helpful and interesting."
(Michael Davie, Chairman, CurveGlobal)
"Curve is the first exchange ever to launch with a US$100 billion of open risk. We’re really transforming the way that the market trades and transfers risk."
"The proof is in the pudding, if you like. Spider delivers the margining advantages; but more than that, it will give a very clear picture as to where the capital savings are."
(Myriam Condron, Business Development, CurveGlobal)
"By moving away from the vertical siloes that are currently in the market, and moving to a much broader participation of shareholders and market participants, we hope to look a little more like the mutual exchanges of old which were there to serve the market participants."
(Steve Hamilton, COO, CurveGlobal)
"Being an initiative run by the industry for the industry, I think it has a very good chance of providing good solutions for those."
"CurveGlobal’s not just about banks. I know that the banks see some benefits in capital, but actually Curve is about the fact that this is owned by a variety of people – this is competition for the markets, and people like competition. It helps control costs, it innovates, and generates new market structure."
"I think this is the wave of the future for what is going to happen in the exchange space. I think the bifurcation between the OTC and the listed market is something that has to be broken down, and I think CurveGlobal is taking us in that direction."
(Andrew Lowenthal, CBOE)
"It’s not about listed or OTC; it’s about the symbiotic relationship between those two. And pulling those together with portfolio margining offsets solves capital problems, and should lead to better prices and lower costs."