S&P futures span Atlantic
Standard & Poor’s, in conjunction with two derivatives exchanges, announced the launch of futures and options on the S&P Europe 350 index and on three of its industry sectors. The three sectors are the financial, information technology and telecom services.
Spanish futures and options exchange MEFF and the Chicago Mercantile Exchange said the products would be the first futures instruments to trade on a European exchange and clear on a US exchange.
The S&P 350 – Europe’s version of the S&P 500 – is a broad market equity index which takes in about 70% of the value of European equities. Together, the three market sectors on which futures contracts will be launched account for 46% of the market capitalisation of the S&P Europe 350.
Later this year, the three businesses said contracts would be launched on the other seven sector indices derived from the S&P Europe 350. These sector indices are consumer discretionary, consumer staples, energy, health care, industrials, materials and utilities.
Exchange officials said the S&P Europe 350 index and its sectors would appeal to investors that wanted to use regional portfolios as a proxy for the investable universe in the region and fund managers aiming to replicate an index portfolio but who preferred a representative index with no more stocks than necessary.
The products would also attract active investors looking for sector or regional indices with low turnover rates and equity derivatives groups using index futures to hedge index portfolio risk, they said.
The new futures and options on futures contracts will trade on the MEFF S/MART system, and transactions will be transmitted electronically to the CME Clearing House.
MEFF chief executive officer Jose Massa said: “The novel alliance of CME, S&P and MEFF answers the new demands that globalisation poses to international investors; by virtue of this alliance, these new products can be American in America and European in Europe.”