CME Europe announces the introduction of new FX liquidity incentive programs


CME Europe, a wholly owned subsidiary of CME Group Inc (NASDAQ: CME) has been busy enhancing their offering of FX futures contracts since its launch back in April of 2014. Looking to mimic the success of CME across the Atlantic, the exchange initially launched with 30 FX futures products and a suite of commodities contracts. The London-based derivatives exchange, provides regionally tailored access to new, differentiated products to better meet the evolving risk management needs of local participants within Europe.

Since the launch the exchange has introduced FX aggregation and discount incentive programs and circuit breakers on FX contracts. The exchange was busy again today looking to drum up volume and liquidity throughout its suite of Forex products with new liquidity incentive programs.

CME Europe just announced the introduction of a new FX Liquidity Creation Programme (LCP), which will replace the existing Long Term Revenue Share Programme (LTRSP). The LTRSP will terminate on 30 June 2016 and as a result, the terms on which any participants currently take part in the LTRSP will cease to have effect after the close of trading on 30 June 2016.

The LTRSP will effectively be replaced by the LCP, which will launch on 1 June 2016. Members and their customers are invited to apply for participation in the LCP from the date of this Notice. Members wishing to take part in the LCP from the initial start date of 1 June 2016 are required to apply to the Exchange by 27 May 2016.

CME Europe is introducing a six month incentive programme to grow liquidity across its FX futures products. The Programme will be open to an unlimited number of participants.

Participants will be able to compete for a percentage of a monthly bonus pool, which is currently set at $100,000. The monthly bonus pool shall be allocated between the top eight participants by points allocation within the participating population, provided that the overall total monthly volume in FX Products on the Exchange equates to at least 100,000 points based on monthly volume, calculated as set out in the Schedule below:

So as you can see, it isn’t just retail brokers who offer incentives in order to increase volume, institutional players looking to jumpstart business offer the same sort of bonus and trading incentive schedules. It is noted that CME Europe will review transactions that qualify for the LCP in order to check that trades have a genuine economic rationale.

Complete details of the Liquidity Creation Program are available here.

To view the CME Europe FX fact sheet click here.

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CME Europe announces the introduction of new FX liquidity incentive programs

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