CurveGlobal’s 3-month SONIA futures contract is expected to go live in Q2 2018, and will come shortly after the initial setting of the new benchmark rate, due to be implemented from 23 April 2018. The derivatives platform is making SONIA contract trading and clearing fee-free for the remainder of 2018.
The launch comes at a time of widespread attention on the establishment of new and liquid short-term benchmarks, as seen with the planned introduction of a Secured Overnight Financing Rate, or SOFR in the United States in the second half of 2018.
Andy Ross, Chief Executive, CurveGlobal said: “The migration to OIS-based contracts is a challenge for financial markets, so with LIBOR set to be replaced, it’s imperative that there are tight, liquid futures available to participants to manage the OIS/LIBOR spread risk.”
In addition, CurveGlobal is listing a simple native Inter-Commodity Spread contract (ICS) between the three-month SONIA and three month Short Sterling futures. The ICS “spread” means no legging risk when trading the spread, with fills in the underlyings. The ability to imply tradable prices in the ICS from orders in the outright markets and also imply from orders in the ICS out to the constituent leg will enhance liquidity in the new products. The ICS contract is also expected to be available for trading in Q2 2018.