Nasdaq is aiming to shake up the exchange landscape with the launch the new Nasdaq Futures energy market. The launch of the new market, which was announced on the sidelines of the 40th Annual FIA International Futures Conference, has the support of leading participants and will offer clearing for options and futures based on benchmarks for oil, natural gas, U.S. power and other key energy commodities.
Founding participants in the new market include ABN AMRO Group, Advantage Futures, Goldman Sachs, JPMorgan, Morgan Stanley and Virtu Financial. In addition to these founders, Nasdaq Futures has the support of other major trading firms, futures commission merchants and inter-dealer brokers. The products will be cleared through The Options Clearing Corporation.
Nasdaq CEO Bob Greifeld acknowledged the move as a challenge to existing powers in the energy futures space by joking with the press pool, “What do CME, ICE and Hillary Clinton all have in common? They all think they have a monopoly on their exchanges.”
“Our strategy is always to meet demand where competition is lacking, and our global benchmark product suite will provide commodity market participants across the planet with a new solution to meet their trading and hedging needs.” said Hans-Ole Jochumsen, president of Nasdaq. “The interest in being able to trade this venue from day one is pretty huge.”
Magnus Haglind, head of commodities Americas for Nasdaq, said the plan is to have a fee structure that is below the CME Group member rate. “We are going to do our piece very efficiently and then OCC is going to work to reduce the overall transaction cost,” Haglind said.
Asked about the announcement during a panel of exchange CEOs, ICE Chairman and CEO Jeff Sprecher likened the move to a similar foray by ELX years ago. CME Group CEO Phupinder Gil added that competition is about more than just pricing.
The new platform will be located in Chicago under NFX as its designated contract market and will be powered by Genium INET technology providing open and neutral access to proprietary broker platforms, order management systems and independent software sellers.
Contributing writer: John Davis