Galen Stops takes a look at the new initiative from the CME that aims to bridge the gap between the OTC and listed FX markets.
It’s an old debate in the FX industry – will the market inevitably move towards an exchange model? Indeed, this question was the cover story on a 2001 edition of Profit & Loss.
As part of the response to the financial crisis, regulators favoured pushing more trading activity towards a centrally cleared model, while certain other regulations looked to add extra costs into bilateral trading. All of this led some market observers to predict that more trading activity would shift towards an exchange traded model.
The CME Group has delisted its EUR/TRY futures contract, effective immediately, and plans to delist its USD/TRY futures contract while also launching a new TRY/USD futures contract in September.
The EUR/TRY contract was listed for trading on CME Globex, as well as for submission for clearing via CME ClearPort. There was no open interest in the EUR/TRY contract at the time of delisting.
For the USD/TRY contract, all contract months that are listed beyond September 2018 have been delisted, meaning that although this contract will continue to be listed on CME Globex and CME ClearPort for the time being, after the market close on September 18 it will be permanently delisted. There is no open interest in the contract months after September.