Global Markets Exchange Group International LLP

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Global Markets Exchange Group
GMEX Logo.png
Headquarters London
Key People Hirander Misra, CEO and Co-Founder

Global Markets Exchange Group International LLP (GMEX) is a London-based company offering consulting and technology services as well as derivatives exchanges, pending regulatory approval from the U.K’s Financial Conduct Authority. [1] It plans to launch original interest rate swap futures contracts, derivatives indices and emerging markets exchange business partnerships enabled by multi-asset trading technology.

In 2016, GMEX was rebranded as the London Derivatives Exchange ("LDX").[2] GMEX split into two companies, one exchange and one technology focused.

GMEX Group includes Forum Trading Solutions, which it bought, and GMEX Technologies. The London Derivatives Exchange is a combination of GMEX's exchange business and GMEX Derivatives Indexes.[3][4]

It was created to take advantage of market opportunities made possible by changes to international regulation in developed markets and by growth in emerging markets, according to a press release.[5]

In December 2014, GMEX entered into a licensing agreement with Eurex to list euro-denominated swap futures based on GMEX's Constant Maturity Future (CMF) methodology.[6] Under the terms of the agreement, Eurex will list contracts on its multilateral trading facility and trades will clear via Eurex Clearing. [7]

Simulated trading began in April 2015, and the actual launch is scheduled for August 7th, 2015.[8] The electronic arranging of CMF contracts will take place on GMEX’s platform with trade confirmation and central clearing taking place at Eurex. GMEX CMF is based on the Interest Rate Swap Index Average (IRSIA) and tracks the interest rate exposure at each point on the yield curve by removing the expiry date and marking the contract to market against an IRSIA Constant Maturity Index on a daily basis. Thereby the contract facilitates the management of interest rate exposure without a constant need to re-adjust and maintains the liquidity of a given maturity from 2 to 30 years.[9]

In addition to the deal with Eurex, in 2014 GMEX also made deals with Tradition and Tullett Prebon Ltd, and in January 2015 GMEX signed up the electronic market maker Virtu Financial as a liquidity provider.[10]

On February 17, 2015 Societe Generale Prime Services (formerly Newedge) announced that it had acquired a minority stake in GMEX, becoming the second minority investor in the group after Deutsche Boerse Group. [11]

Products and Services

GMEX Group is divided into three divisions:

  • Global Markets Exchange Group, a holding company for planned securities, commodities, and derivatives exchanges.
  • GMEX Technologies, which includes a matching engine, surveillance system and several front-end trading platforms. This division also provides technology services to exchange users.
  • Global Derivatives Indices, which will produce indices based on OTC markets.

History

GMEX Group, which had already established exchange consulting, technology and index divisions, announced on August 12, 2013 the launch of Global Markets Exchange Group Limited (”GMEX”), a wholly-owned subsidiary, as a Multilateral Trading Facility (“MTF”), pending regulatory approval.

On September 9, 2013, GMEX announced the expected launch of Constant Maturity Futures (CMF). Designed to address the complications for hedging interest rates that have been associated with the standard quarterly expiring futures contracts, the products await regulatory approval.[12]

In October 2013, Deutsche Boerse purchased a minority stake in Global Markets Exchange Group. The exact terms were not disclosed, except that DB said it had paid a "single digit million GBP sum" for the stake. [13]

On November 5, 2013 Newedge announced plans to become a trading and clearing member of GMEX Group.[14]

On December 5, 2013, GMEX Technologies, together with Paris-based consultancy CoDiese, launched a trade reporting service to assist European market participants' compliance with EMIR.[15]

In December of 2013, GMEX Technologies launched a derivatives trading reporting service called Global Reporting Company, formed in partnership with Paris-based CoDiese, a regulatory and market infrastructure advisory firm.[16]

In July 2014, a research study at University College London determined that the overnight process that maintain constant maturity of the GMEX CMF contract has not produced any significant "novation costs" for any tenor during the period analyzed, thus validating the contract as a viable alternative to interest rate swaps.[17]

Key People

References

  1. Misra Starts London Derivatives Venue as Rival to Nasdaq. Bloomberg News.
  2. Rebranding. London Derivatives Exchange.
  3. GMEX Group separates exchange from technology business amid restructure. The Trade News.
  4. GMEX exchange rebrands as London Derivatives Exchange amid restructure. The Trade News.
  5. Global Markets Exchange Group announces new innovative Derivatives Exchange. GMEX.
  6. Eurex and GMEX cooperate in swap futures trading and clearing. Automated Trader.
  7. Eurex Adds to Swap-Future Lineup as Rules Reshape Market. Bloomberg.
  8. GMEX interest rate swap futures launch for trading in August at Eurex. GMEX.
  9. GMEX interest rate swap futures launch for trading in August at Eurex. FTSE Global Markets.
  10. GMEX readies for launch with Virtu deal. The Trade.
  11. SocGen Prime Services acquires minority stake in Gmex Group. Finextra.
  12. GMEX announces pioneering swap futures contract to allow effective hedging of interest rate exposure. PRLOG.
  13. Press Release: Deutsche Boerse supports market innovation by acquiring a stake in GMEX Group. GMEX Group.
  14. Newedge to join forces with GMEX Group. Newedge.
  15. GMEX Launches Trade Reporting Service, Mulls Data, Analytics. Waters Technology.
  16. GMEX Unveils Trade Reporting Service for Derivatives To Comply with EMIR. Wall St. & Technology.
  17. Press Release: University College London validates GMEX Constant Maturity Future. GMEX.