Globex could be turned into open marketplace
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Your support makes all the difference.GLOBEX, Reuters' troubled after-hours derivatives trading system, would be transformed from a proprietary network into a marketplace open to all the main futures exchanges under a proposal announced yesterday by its chairman.
Control of trading on the electronic market, dominated by the two leading Chicago exchanges, should instead be shared by all exchanges that join, said Jack Sandner, who is also chairman of the Chicago Mercantile Exchange, one of the joint-venture partners.
Rivalries between the Chicago Merc and its partner, the Chicago Board of Trade, have hampered growth of the dollars 100m system, launched in June 1992.
While Globex has managed to attract listings from Paris's Matif, other important markets, including the London International Financial Futures and Options Exchange and the New York Mercantile Exchange, have refused to participate in a system controlled by competitors.
Officials of the Paris, London and New York exchanges and of Reuters, which developed and operates the system, all welcomed yesterday's initiative. Reuters has been openly disappointed at Globex volumes of 25,000 contracts a day, nearly 90 per cent in Matif contracts and just half the target.
But the CBOT, which favours restructuring, is believed to have reservations about the proposals, which would oblige all participants to commit themselves to the system at the expense of their own local after-hours trading systems.
Yesterday Pat Arbor, the CBOT chairman, issued a testily worded statement noting that the CBOT has had concerns about governance of Globex, but promising to 'sit down with our joint-venture partner (the Merc) to come up with an acceptable agreement'.
Mr Arbor last week said the Board of Trade was willing to surrender control to permit it to function more like a common utility.
Liffe pulled out of talks to join Globex in August. A spokeswoman said: 'Liffe believes the type of governance being proposed is along more satisfactory lines. However, this is the first of a number of hurdles.'
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