Montréal Exchange and Eris Exchange Announce Swap Futures Licensing Agreement
MX Licenses the Eris Methodology™ for Canadian Dollar Swap Futures
September 10, 2014 (MONTRÉAL) - Montréal Exchange (MX), Canada's derivatives exchange, and Eris Exchange, a US-based futures exchange, today announced a licensing agreement for MX and Canadian Derivatives Clearing Corporation (CDCC) to offer trading and clearing of Canadian Dollar swap futures and options based on the Eris Methodology, Eris Exchange's unique product design and intellectual property for constructing swap futures as a capital-efficient alternative to OTC swaps.
"Recent regulatory reforms have led to the emergence of the global swap futures market and the regulatory landscape here in Canada continues to evolve," said Alain Miquelon, President and CEO, Montréal Exchange and Group Head of Derivatives Markets, TMX Group. "As MX evaluates alternatives to meet the needs of this growing market, we are pleased to announce this agreement with the Eris Exchange, which will leverage their proven expertise to futurize swaps for the Canadian interest rate market."
The patent-pending Eris Methodology replicates the economics of interest rate swaps through capital efficient futures products, by combining the component cash flows of swaps into a single futures price, allowing payments to flow through variation margin. Swap futures based on the Eris Methodology remain futures throughout the full lifecycle of the position, allowing market participants to operate within the familiar eco-system of futures market regulations, back-office processes, agency execution and software tools.
"With its distinguished track record in developing deep and liquid markets for Canadian interest rate futures, Montréal Exchange is an ideal partner to deliver the value of the Eris Methodology to the Canadian-dollar denominated interest rate market," said Neal Brady, CEO of Eris Exchange. "Bolstered by recent growth in our U.S. Dollar-denominated Eris Flex and Eris Standard Swap Futures, including last Friday's volume and open interest records, Eris Exchange is looking to extend the reach of its innovative methodology for futurizing swaps to new jurisdictions and asset classes."
About TMX Group (TSX: X)
TMX Group's key subsidiaries operate cash and derivative markets and clearinghouses for multiple asset classes including equities, fixed income and energy. Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Alpha Group, The Canadian Depository for Securities, Montréal Exchange, Canadian Derivatives Clearing Corporation, NGX, BOX Options Exchange, Shorcan, Shorcan Energy Brokers, Equicom and other TMX Group companies provide listing markets, trading markets, clearing facilities, depository services, data products and other services to the global financial community. TMX Group is headquartered in Toronto and operates offices across Canada (Montréal, Calgary and Vancouver), in key U.S. markets (New York, Houston, Boston and Chicago) as well as in London, Beijing and Sydney. For more information about TMX Group, visit our website at www.tmx.com. Follow TMX Group on Twitter at http://twitter.com/tmxgroup.
About Eris Exchange
Eris Exchange is a futures exchange registered as a Designated Contract Market with the Commodity Futures Trading Commission. Eris Exchange lists cash-settled interest rate swap futures with current open interest exceeding 129,000 contracts. Eris Exchange contracts are cleared by clearing firms through CME Clearing, the global leader in derivatives clearing. Eris SwapBook™, Eris BlockBox™, and Eris Methodology™ are trademarks of Eris Exchange. For more information, visit Eris Exchange online at www.erisfutures.com or follow us on Twitter @erisfutures.
Senior Manager, Communications and Public Affairs