By Laura Matthews
(Reuters) – Brokerage BGC Group launched its FMX Futures Exchange on Tuesday, the latest attempt by billionaire Howard Lutnick to challenge the dominance of CME Group and increase competition for market share in U.S. Treasuries.
The new exchange now enables clients to trade Secured Overnight Financing Rate (SOFR) futures. U.S. Treasury futures will be added in the first quarter of 2025, BGC said.
According to BGC, FMX will introduce “significant capital savings” through its partnership with LCH Limited, an approved derivative clearing organization and large clearer of interest rate swaps.
LCH has $225 billion of interest rate swap collateral securing those swaps, and LCH members expect to cross-margin eligible U.S. interest rate futures traded on FMX against them, it added.
Earlier this year, BGC revealed that 10 of the world’s leading investment banks and market-making firms including Bank of America, Citadel Securities, Goldman Sachs and JPMorgan Chase made minority equity investments into FMX, valuing it at $667 million.
BGC got regulatory approval in January to operate the futures exchange.
(Reporting by Laura Matthews; Editing by Mark Porter)
