CME Group, the world’s leading and most diverse derivatives marketplace, and trueEX, LLC, the first CFTC‐regulated electronic exchange for swaps, today announced a non‐binding agreement to forge a strategic partnership to develop trueEX Credit Spread Futures contracts based on the newly created S&P Indices that would be distributed to the global futures markets on CME Globex, subject to a final agreement.
Under the strategic arrangement, CME Clearing will also provide trueEX with clearing services for these products. The product set will include trueEX Credit Spread Futures contracts based on the newly‐launched S&P Credit Spread Indices. On April 10, 2013, S&P Dow Jones Indices launched three new credit spread indices; the S&P 150 Investment Grade Credit Spread Index which is a combination of the Corporate Credit Spread Index (S&P 120 Credit Spread Corporate Index) based on the largest 120 investment grade issuers of long‐term debt outstanding in the S&P 500, and the Financials Credit Spread Index (S&P 30 Credit Spread Financials Index) based on the largest 30 financial investment grade issuers of long‐term debt outstanding in the S&P 500. The trueEX Credit Spread Futures contracts will be cleared in the same clearinghouse as the S&P Equity 500 Futures Contracts.
“Along with CME Group’s large IRS and Equity futures complex as well as OTC IRS and CDS clearing solutions, these credit spread futures will further complement the products we offer to help customers manage their credit market risk,” said Laurent Paulhac, CME Group’s Senior Managing Director of Interest Rate and OTC Products and Services. “By distributing the contract on the CME Globex electronic trading platform, and clearing through the CME Clearing, it will reach the broadest client community very efficiently.”
“The investor community is in need of an independently constructed broad–based credit spread index which is based on the largest corporate and financial debt issuers in the S&P 500. trueEX has created a contract which will provide a transparent, standardized way for the global investor community to express a view on corporate credit spreads in futures form – something that has never previously been offered before to the futures client community.” said Sunil Hirani, CEO of trueEx.