CurveGlobal Markets, the futures exchange from London Stock Exchange wants to be a home of SONIA futures, the reformed reference rate for futures. Competing in futures markets is hard, and along the way we’ve all seen many who have attempted and failed. Why is this?
Well to build a marketplace you need people to come and shop, to try a buy and sell. In futures, like an online marketplace you also need clearing (think delivery capabilities). At CurveGlobal Markets, it’s exciting as we have a plethora of clearing banks and non-bank clearing members, see here, so clearing and netting your positions is as easy as trading. Would it be taking my metaphor too far to suggest that with LCH perhaps we’ve the equivalent of “Prime” delivery?
LIBOR replacement is a 2021 thing, with the pre cessation trigger announced last week. This means that you, as a risk holder know exactly the spread that will be applied to adjust your LIBOR positions into SONIA positions. Customers can trade CurveGlobal’s Inter commodity spread (ICS) between SONIA and SHORT STERLING at 1/10 of a tick. This means it can and actually is trading at a better price at all points on the short term interest rate Curve. Our members can benefit from best execution on the transfer of their positions at best price. That’s why we’re so excited to have new members joining, trading and clearing.
And…looking at our wider market we are seeing GROWING volumes.