By Terry Flanagan

NYSE Liffe to Launch Russell Index in Europe

A new pan-European futures contract is to be launched by NYSE Liffe, based on an index that contains the 300 most rapidly traded small and mid-cap listed European companies, in a bid to boost liquidity in the segment.

From October 1, futures contracts based on the Russell Europe SMID 300 Index, which has been created by Russell Investments, a U.S. indices compiler, will be listed on NYSE Liffe’s Bclear wholesale derivatives service. NYSE Liffe is the European over-the-counter derivatives arm of transatlantic exchange operator NYSE Euronext.

Seattle-based Russell, a leading provider of U.S. equity indices, wants to establish a firmer footing in the European market. Many U.S. investors use mutual funds or exchange-traded funds based on the Russell Indexes as a way of gaining exposure to certain portions of the U.S. stock market, while U.S. investment managers use the Russell Indexes as benchmarks against their own performance. For example, the Russell 2000 Index is by far the most common benchmark used to measure the performance of the small-cap segment of U.S. equities.

“We are very excited that NYSE Liffe is launching futures on the Russell Europe SMID 300 Index, a highly tradable index of small and mid-cap European stocks,” said Scott Stark, head of Russell Indexes Europe. “We designed our new index to meet a clear need in the marketplace, and are pleased we are already seeing a strong acceptance.”

NYSE Liffe says it will be the first index of its kind in European equity markets for highly liquid constituents covering the small and mid-cap segment. The index, which was designed with input from leading broker-dealers—including Barclays, Deutsche Bank, Goldman Sachs and UBS—for ease of use, represents a low implementation cost alternative to existing indexes, according to NYSE Liffe. The index has also been built to minimize the length of time it takes to trade a basket of stocks that replicates the index constituents and their weights.

“With the launch of this futures contract on the Russell Europe SMID 300 Index, we are providing our customers with a unique product to access Europe’s small and mid-cap companies,” said Ade Cordell, executive director of equity derivatives at NYSE Liffe.

Bclear has processed over 1.4 billion equity derivative contracts since its launch in 2005 with a value of €15.4 trillion. Bclear is NYSE Liffe’s service for processing and clearing OTC derivatives within the secure environment of a Recognised Investment Exchange and a Recognised Clearing House.

Related articles

  1. 2021 marked the fourth consecutive year of record-setting trading activity.

  2. Outlook 2016: Alexander Lehmann, LSEG

    LCH SwapAgent registered over 10,000 trades in 2021, a five fold increase.

  3. There is growing interest in actionable insights into market data.

  4. The next focal point of the crypto market will be over-the-counter derivatives.

  5. Overall trading volumes across all products fell 8% from 2020.