Intercontinental Exchange starts hunt for interest rates chief
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Intercontinental Exchange is preparing to deepen its push into off-exchange derivatives markets in Europe, beginning with the search for a head of its interest rates business.
The US derivatives operator has appointed Heidrick & Struggles to lead the search, according to three people familiar with the talks.
The new recruit is expected to head exchange-traded derivatives, part of the Liffe London derivatives exchange ICE bought last year as part of its $11bn purchase of NYSE Euronext. They will also be expected to lead ICE’s push into clearing interest rate swaps in Europe in the next year. David Peniket will remain as president and chief operating officer of Liffe. ICE declined to comment.
The group is in the middle of moving NYSE Euronext’s derivatives businesses to its own platforms from NYSE-owned systems. The shift will centralise ICE’s global interest rate portfolio on one exchange and cut the high cost for customers to connect to multiple venues.
It would also provide the platform for a deeper push into clearing interest rate swaps and a challenge to LCH.Clearnet, the dominant local market player. In particular ICE could offer customers large savings on the margin they must post to back their derivatives trades by netting their futures and OTC positions.
Rival CME Group, which offers the service in the US, has estimated saving one of its biggest customers $1bn a day by cross-margining positions.
ICE is expected to move the trading operations for Liffe’s European interest rates business switching over in the autumn.
Last year it transferred the open positions of fixed income, equity, currency and commodities trades made on NYSE Liffe to its own clearing house from LCH.Clearnet.
Comments