Eurex teams up with global index provider FTSE Russell to expand Total Return Futures

The international derivatives exchange Eurex has announced its partnership with FTSE Russell to extend its pioneering Total Return Futures (TRF) segment through a new contract on the FTSE 100 Index.

Through the cooperation with FTSE Russell, the member of the Deutsche Börse Group is further expanding its collaboration with leading index providers in its index segment. The launch is scheduled for 29 March. It reflects the goal of supporting the global shift towards regulated on-exchange trading with central clearing, as well as passive investments.

The move is a response to clients’ demand for a TRF contract covering the UK equity market.


Michael Peters, CEO of Eurex:

Michael Peters, Eurex

Michael Peters
Source: LinkedIn

Increased margin pressure, capital requirements and demand for electronic execution are moving OTC segments into futurized listed derivatives. Our innovative TRF offering provides great benefits to address these topics. We are pleased to partner with FTSE Russell to further expand this novel area in particular.

Waqas Samad, CEO FTSE Russell, head of Investment Solutions, LSEG:

Waqas Samad, FTSE

Waqas Samad
Source: LinkedIn

We are delighted to work closely with Eurex in meeting growing investor demand for risk management products on the widely used FTSE 100 benchmark index. Our collaboration with Eurex reflects LSEG’s commitment to supporting clients across the markets and communities that we serve, the strength of the FTSE Russell index franchise and the ability of Eurex to meet client needs with innovative solutions.

TRF’s goal is to replicate the returns of traditional bilaterally negotiated equity or equity index-based swaps. Compared to a bilaterally negotiated swap, however, central clearing enables portfolio margining, simplifies settlement and mitigates counterparty risk.

The new TRF contract is an addition to Eurex’s existing TRF suite including index TRFs, individual Equity TRFs and equity Basket TRFs. Eurex launched the TRF segment in 2016 with the listing of the first Total Return Futures on the EURO STOXX 50 Index. Equity Total Return Futures on 255 stocks and the new basket trade functionality were launched in October 2019. Eurex has managed to move more than 50%  of the EURO STOXX 50 OTC market to its product. The open interest currently stands at 1.5 million contracts.

Eurex will also add dividend futures and regular futures and options on the FTSE 100 Index to complementing the FTSE 100 index TRF. With the link products, participants can benefit from lower margins from the outset due to Eurex’s portfolio-based margining approach. The launch of additional dividend futures also addresses the increased risks that have observed recently.

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