Eurex plans to expand its Partnership Program to include short-term interest rate (STIR) derivatives. With this latest step, Eurex strengthens its interest rate derivatives suite, enhancing its cross-product efficiencies while also supporting the European systemic stability and strategic autonomy agenda.

In addition to euro interest rate swaps and euro credit default swaps, euro STIR derivatives clearing has been identified by ESMA as being of substantial systemic importance for the EU’s financial stability.

Against this regulatory backdrop, Eurex’s Partnership Program together with major market participants aims to establish a viable alternative liquidity pool for trading and clearing EURIBOR Futures and Options within the EU. This will enable global clients to benefit from a comprehensive product offering including Eurex’s leading LTIR segment, the clearing of OTC interest rate swaps as well as repo transactions. At the same time, it will build out Eurex’s value proposition for euro-denominated derivatives and repo, delivering efficiencies to a global client base.

Matthias Graulich, Member of the Executive Board at Eurex Clearing:

“The extension of the Partnership Program is the latest step in Eurex’s efforts to provide the market with greater choice and bring more systematically relevant business into the EU. It helps customers not only to diversify risk across CCPs, but also to benefit from comprehensive cross-product margin efficiencies, lowest funding costs via the broadest range of securities collateral and attractive terms for Euro cash collateral.”

The program also includes Three-Month Euro STR Futures referencing €STR. Their launch in January marked an important milestone in establishing the new benchmark risk-free rate. The switch from the former short-term rate EONIA to €STR is part of the broader IBOR reform. Eurex’s Three-Month Euro STR Futures are supported by a dedicated group of market makers providing pricing in the order book as well as a few banks providing off-book from launch date.

The design of the program extension is complementary to the interest rate swaps segment, which started in January 2018. The performance-based program aims to build a balanced ecosystem where responsibilities and benefits are fully aligned between all participants in terms of economics and governance.

The STIR Partnership Program as well as the re-launch of EURIBOR Futures and Options are planned to go live in Q4 2023.

Market participants can now register their interest to join the new program components. BNP Paribas, Deutsche Bank, Goldman Sachs, J.P. Morgan and LBBW have already expressed an early interest to join. Clients who fully register for the program until 31 July 2023 will benefit from an extra reward within the Partnership Program performance framework.