A dozen financial institutions, including Bank of America JPMorgan, Merrill Lynch and Chicago hedge fund firm Citadel Investment Group, have joined together to launch a new futures exchange, a company spokesman said on Friday.
The group also includes Credit Suisse, Barclay's Barclay Capital, Citigroup, Deutsche Bank, eSpeed, GETCO LLC, PEAK6 and the Royal Bank of Scotland.
The exchange is being formed to create a competitive, low-cost alternative in the futures market. The spokesman declined to say if the group intends to compete directly with CME Group's Chicago Mercantile Exchange.
CME is the world's largest futures exchange, controlling more than 85 per cent of US futures and options-on-futures volume after its July takeover of CBOT Holdings Inc.
Early next year, the new exchange plans to roll out US Treasury futures as its first product, the spokesman said.
Paul Saltzman, currently chief operating officer of eSpeed, is to be the exchange's acting chief executive.
The group's board will meet early in 2008 to name the venture, and launch a management search.
eSpeed will be the technology provider for the fully-electronic futures exchange. (Reuters)
Financial firms plan new futures exchange