Key banks, brokerages and high-frequency trading firms are backing a new London derivatives market set up by Nasdaq OMX , which the exchange is launching to shake up competition in trading European interest-rate products.
Nasdaq said in a statement on Thursday banks supporting the venture were BNP Paribas , Citi , Nomura <9716.T>, Royal Bank of Scotland and UBS , while brokerages and traders included Newedge, DRW Trading and Getco Europe.
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NLX, which gained regulatory approval this week to launch from Friday, will allow participants to trade a range of short-and long-term interest rate euro and sterling-denominated derivative products, such as futures in three-month Euribor or the 10-year Bund, on a single market.
Interest-rate derivatives have traditionally traded and cleared on two separate platforms, but NLX will allow clients to clear products on the same market as they trade.
"Regulatory change is driving the need for us to look closely at how we create capital efficiency in all parts of our business," Adrian Averre, global head of G10 flow rates trading at BNP Paribas, said in the statement.
"NLX has the potential to create significant margin savings in the short, medium and long term, which enables our clients to invest those savings into growth activities that support the global economic recovery and higher returns," Averre said.
(Reporting by Tommy Wilkes; Editing by David Holmes)