Exchange Looks to the Future

Terry Flanagan

With the dominance of CME Group in the derivatives space, competitors will look toward new avenues of growth to chip away market share.

“We’re looking to be stronger, there is a lot of opportunity to grow the market,” Richard Jaycobs, the newly appointed chief executive officer of ELX Futures, told Markets Media. “There are so many variables in the industry. Market volumes come and go, from the impact of MF Global to the ongoing events in Europe, to inflation expectations and the upcoming election.”

“We have some ideas on what others have done in the past that didn’t work, so we will try new ideas and we’ll look to expand our customer base,” added Jaycobs. “The futures space is very competitive, and we’re looking to get to the next level.”

CME Group currently trades about 95% of all U.S. Treasury futures. ELX’s share of the pie is under 1%, while NYSE Liffe U.S., which launched early last year and is the other significant player in the space, is at about 1%.

ELX for now will continue to focus on growing its customer base beyond its core community through broadening its product line.

NYSE Liffe U.S. is also pushing forward in its effort to gain market share from the CME. Earlier in the month, it announced a host of new products, including new interest rate futures contracts, as well as metals and stock index derivatives.

Jaycobs replaces the outgoing Neal Wolkoff, who will resign from the position effective April 30. Wolkoff had been CEO of ELX since the company’s launch in July 2009. “At this point, I am ready for new challenges and opportunities,” said Wolkoff in a statement. Prior to joining ELX, Jaycobs held top positions at several smaller derivatives platforms.

ELX Futures is a fully electronic, regulated futures exchange, founded as a faster and more cost effective alternative to existing futures platforms, including CME Group. Its founding partners include Bank of America, Barclays Capital, BGC Partners, Breakwater, Citi, Credit Suisse, Deutsche Bank Securities, Getco, Goldman Sachs, JPMorgan, Morgan Stanley, PEAK6 and The Royal Bank of Scotland. Its trading platform is provided by BGC Partners’ eSpeed platform, and its trades are cleared by the Options Clearing Corp.

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