Santander Asset Management has started to expand its FX futures business on Eurex, with the support of Banco Santander as a clearing member and Deutsche Bank as a liquidity provider.
This move by Santander Asset Management highlights the trend towards listed foreign exchange businesses. More and more market participants are using listed currency derivatives as a tool to hedge their portfolio performance.
This is increasingly affected by the rising costs of counterparty risk and related regulations. Centrally cleared currency futures and options help market participants reduce counterparty credit risk, navigate unspecified margin rules (UMR) and optimize the cost of capital.
Jens Quiram, Global Head FIC Derivatives and Repo Sales at Eurex:
“We are proud to welcome Santander Asset Management. This is a great addition on our way to becoming the leading FX liquidity hub in Europe. By now trading and clearing listed FX derivatives on Eurex, Santander Asset Management benefits from low FX fees and regulatory certainty within the EU.”
Santander also plans to set up an FX options business on Eurex. Backed by Deutsche Bank, they traded the first FX block options transaction on Eurex.
Imanol Urquizu, Head of Derivatives at Santander Asset Management:
“We look forward to working with Eurex to expand our listed FX business in Europe. In addition to our commitment to forex futures, we are actively working with many forex dealers to explore forex options trading on Eurex. Integrating FX futures and options into the Eurex ecosystem unlocks operational efficiencies and enhances our hedging capabilities.”
Mario Muth, Global Head of Platform Sales and Listed Derivatives and Head of Fixed Income Market Structure at Deutsche Bank:
“Deutsche Bank is pleased to provide liquidity to the foreign exchange division at Eurex and is proud to partner with Santander Asset Management to deliver this important initiative. FX trading on Eurex allows clients to benefit from the efficiency of a listed derivatives market and this is a prime example of how Deutsche Bank works with clients and trading venues to provide liquidity and solutions to the evolving foreign exchange market.”
With more than 1.7 million contracts traded in 2023 on Eurex, volumes have almost tripled compared to 2020, when a total of 600 thousand contracts have been traded. Compared to the first quarter of 2023, the number of contracts traded increased by 16 percent to 586 thousand in the first quarter of 2024.