PHILADELPHIA – September 13, 2006
- The Philadelphia Stock Exchange (PHLX) and its wholly owned
subsidiary Philadelphia Board of Trade (PBOT) announced today
that it will list for trading products on British Bankers’
Association (BBA) LIBOR reference rates on October 6 subject
to final regulatory approval. Through an agreement with Derivative
Designs, PBOT will become the global exchange host for an entirely
new line of short-term interest rate futures products. PBOT’s
first product listing will be Daily Expiry™ US Dollar
BBA LIBOR™ Futures with the initial listing of a daily
maturity for every business day the U.S. Federal Reserve is
open for eleven and a half years (for example, October 2006
through April 2018). The Options Clearing Corporation (OCC)
will clear all PBOT trades.
" PBOT introduces a new market model for
the benefit of traders seeking the opportunity to choose specific
daily LIBOR maturity dates supported by PHLX streaming quote
technology and OCC’s AAA credit rating,” said PHLX
vice president of new products, Daniel Carrigan. “By partnering
with Derivative Designs, the British Bankers’ Association
and the Options Clearing Corporation, PBOT is positioned to
offer an exchange-traded alternative to the OTC interest rate
swap market with each trading day covered for the next 11 ½
years,” he said.
Ian Mullen, chief executive of the British Bankers'
Association said: "I am delighted that the British Bankers'
Association has been able to grant an exclusive license to Derivative
Designs to enable this innovative product to be launched on
the Philadelphia Board of Trade. The derivatives industry will
now be able to provide a seamless hedge covering every single
trading day of the year. This first product in a forthcoming
range of new BBA LIBOR™ based derivatives offers increased
efficiency to the financial markets and creates new opportunities
for all participants."
“We are pleased to be the clearinghouse
for the Philadelphia Board of Trade as it provides an innovative
approach to interest rate futures,” said Michael Cahill,
president and chief operating officer of The Options Clearing
Corporation. “The OCC stands ready to support the PBOT
product launch with a fully functional, efficient and cost effective
futures clearing system.”
Pierre Wolf, a founding partner of Derivative
Designs and Managing Director of the Derivative Products Group
at Fimat, LLC states: “The futures market has waited years
for this innovative solution - complete anonymity to trade LIBOR
swaps and options, an exclusive BBA license to ensure credibility
and symmetry with the over the counter market, an open platform
to the entire industry ensures equality of access and liquidity,
and a AAA credit counterparty with the OCC.”
Todd McCormick, also a managing director of the
DPG group at Fimat, LLC and founding partner of Derivative Designs,
said, “We have designed a series of hybridized fixed income
derivatives, taking the best aspects of both the OTC and listed
worlds, while eliminating the counterpart credit management
matrix. This solution is elegant in its simplicity. Subsequent
to the product launch, we will roll out D.E.L.T.A., the Daily
Expiry LIBOR Trading Assistant, a block-execution portal to
replicate Fixed / Floating swaps for two or more reset periods.
The portal will have innovative private negotiating tools for
deal terms and execution. Further, executed trades will be reported
to PBOT for straight through processing to OCC to clearing firms
utilizing Sungard bookkeeping software. We believe this technology
will streamline multi contract trading.”
About the PHLX
The Philadelphia Stock Exchange was founded in 1790. The PHLX
trades 1,943 stocks, 2,231 equity options, 19 sectors index
options and currency options and futures. For more information
about the PHLX and its products, visit www.phlx.com.
About the PBOT
The U.S. Commodity Futures Trading Commission certified the
Philadelphia Board of Trade as a Designated Contract market
on May 26, 2006. For more information about the PBOT and its
products, visit www.phlx.com/pbot
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