Montréal Exchange and Eris Exchange announce Canadian Dollar swap futures licensing agreement

Montréal Exchange (MX), Canada’s derivatives exchange, and Eris Exchange, a US-based futures exchange, today announced a licensing agreement for MX and Canadian Derivatives Clearing Corporation (CDCC) to offer trading and clearing of Canadian Dollar swap futures and options based on the Eris Methodology, Eris Exchange’s unique product design and intellectual property for constructing swap futures as a capital-efficient alternative to OTC swaps.

“Recent regulatory reforms have led to the emergence of the global swap futures market and the regulatory landscape here in Canada continues to evolve,” said Alain Miquelon, President and CEO, Montréal Exchange and Group Head of Derivatives Markets, TMX Group. “As MX evaluates alternatives to meet the needs of this growing market, we are pleased to announce this agreement with the Eris Exchange, which will leverage their proven expertise to futurize swaps for the Canadian interest rate market.”

The patent-pending Eris Methodology replicates the economics of interest rate swaps through capital efficient futures products by combining the component cash flows of swaps into a single futures price, allowing payments to flow through variation margin. Swap futures based on the Eris Methodology remain futures throughout the full life-cycle of the position, allowing market participants to operate within the familiar eco-system of futures market regulations, back-office processes, agency execution and software tools.

“With its distinguished track record in developing deep and liquid markets for Canadian interest rate futures, Montréal Exchange is an ideal partner to deliver the value of the Eris Methodology to the Canadian-dollar denominated interest rate market,” said Neal Brady, CEO of Eris Exchange. “Bolstered by recent growth in our U.S. Dollar-denominated Eris Flex and Eris Standard Swap Futures, including last Friday’s volume and open interest records, Eris Exchange is looking to extend the reach of its innovative methodology for futurizing swaps to new jurisdictions and asset classes.”

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