ELX Futures said on Thursday its stakeholders recently injected “many millions of dollars” into the small U.S. Treasury futures exchange to help it expand to incorporate over-the-counter swaps and other products.
Neal Wolkoff, chief executive of the year-and-a-half-old market which is trying to take on futures giant CME Group Inc., said they did this in the last 10 days. He called it “a generous amount of money,” but did not say how much.
Wolkoff said the injection should dispel the notion that ELX’s Wall Street stakeholders only intended it to be a short-term venture. “We’re not here to be a thorn in somebody’s side,” Wolkoff told reporters at a Futures Industry Association conference.
“We’re looking at other product areas…most likely in the regulated futures market,” he said, adding ELX could “introduce an off-exchange product” and interact with swaps, cash and options markets.
Over-the-counter swaps were blamed for exacerbating the 2007-2009 financial crisis. Global lawmakers and regulators now want to run most of the $615 trillion market through clearinghouses and even trading venues, posing a lucrative opportunity for exchanges at the expense of banks.
ELX now trades Treasury and Eurodollar futures, having in general grabbed less than 5 percent of the Treasuries since it launched in 2009. It is also engaged in a spat with CME over the regulatory approval of a rule that would make it easier for traders to move positions between the two venues.
ELX is owned by Goldman Sachs Group, JPMorgan Chase and others. Each of the backers contributed capital, ELX said.
