London Stock Exchange launches CurveGlobal derivatives venture

London Stock Exchange Group has launched a new interest rate derivatives venture, CurveGlobal, with a number of major dealer banks and the Chicago Board Options Exchange.

LSE said it has signed definitive terms with the lenders – Bank of America Merrill Lynch, Barclays, Citi, Goldman Sachs, J.P. Morgan, Société Générale – in respect of the venture and additional shareholders are expected to join in the coming months.

CurveGlobal plans to initially offer trading in short-term interest rate futures in Euribor and short sterling and long-term interest rate futures in bund, bobl, schatz and gilts.

LSE said additional products are expected to be rolled out following the launch phase. The products will be traded on the London Stock Exchange Derivatives Market, and cleared through its LCH.Clearnet subsidiary, subject to regulatory approvals and necessary licences.

The FTSE 100 group said it will make an initial investment of £9.5m in the venture, which is about a third of the expected total funding capital requirements for the venture, in exchange for a 31.67% stake. It said the shareholding would drop to around 25% as additional shareholders join.

Chief executive Xavier Rolet said: “CurveGlobal is an exciting and innovative initiative for our customers and one that complements the recently announced portfolio margining solution from LCH.Clearnet's SwapClear business.”