Last year Euronext’s London International Financial Futures and Options Exchange established a beachhead on the Chicago Mercantile Exchange’s home turf by supplying its technology to the Chicago Board of Trade. Then in February, Frankfurt’s Eurex encroached further by opening a derivatives exchange, the all-electronic Eurex US, in the city of broad shoulders and narrow financial instruments.
Now the Merc -- still the biggest of all futures markets -- is playing defense by going on the offense in Europe, where it has long had a presence. Last month the CME dispatched one of its top people, Arman Falsafi, head of electronic trading and data, to the U.K. “Having a senior person in London sends a clear signal that we are committed to Europe and our European clients,” declares Merc CEO Craig Donohue. Falsafi, whose new title is managing director for Europe and Asia, has been a key contributor to the Merc’s technology push since joining the company in 1999. The 37-year-old Iranian native holds a master’s in computer systems engineering from Northeastern University and an MBA in finance from the University of Chicago.
She isn’t exactly starting from scratch in her new assignment. International products like Eurodollar futures and options on futures and foreign exchange contracts accounted for much of the Merc’s 28 percent year-over-year surge in volume in August. The CME’s Globex electronic trading platform, which was rolled out to London in 2002 and six Continental cities over the past year, handled 62 percent of all CME trading in August, compared with 38 percent a year earlier. Touting its 24-hour trading, the Merc boasts that it has a bigger transaction volume than either Eurex or Liffe.
“In 2001 there were three people in the London office -- now there are 12,” notes Falsafi. “CME’s leadership had the foresight to realize that futures trading would go electronic. And now that we’ve laid the groundwork, it’s time to harvest our investments by bringing in serious volumes from around the world.”
