German exchange set to take over Nasdaq’s commodities futures business

on Nov 18, 2019
Updated: Jun 1, 2022
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  • Nasdaq to sell commodities futures business to a German exchange
  • Energy exchange EEX Group plans to finalize the integration of the US exchange’s futures and options business into its platform by next month
  • EEX Group is keen on expanding its global investments especially in the US

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Nasdaq confirmed on Tuesday last week that it was indeed
finalizing plans to sell off its commodities futures
line of business to a German entity, Energy exchange EEX Group. Sources
familiar with the matter confirmed that a sale agreement was reached between
the two exchanges to offload Nasdaq’s core assets relating to futures and
options, which include the portfolio of open interest in NFX contracts to EEX
Group.

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Details of
the agreement indicate that Nasdaq will transfer all open positions currently in
U.S. Power, U.S. Natural Gas, Crude Oil, Ferrous Metals and Dry Bulk Freight
futures and options contracts to Nodal Clear and European Commodity Clearing
(ECC), the clearinghouse of EEX Group.

The acquisition
marks another major milestone for German’s EEX
expansion plan
, as it hopes to increase its global investments mainly in
the US.

EEX CEO Peter
Reitz commented on the matter saying, “This is a landmark deal for EEX Group as
we continue to follow our global expansion strategy and one which will bring
significant benefits for our client base worldwide by creating an even larger
liquidity network and offering higher capital efficiencies.”

Nasdaq Senior
Vice President of North American Market Services Kevin Kennedy comments: “Nasdaq
entered the U.S. futures marketplace in response to clients who wanted to
develop new ways to innovate around energy and freight trading. After
evaluating the steady progress, we made to expand our client base and grow open
interest, the next step forward is for EEX and Nodal to continue this mission.”

Both
parties immediately began handling the technicalities involving in finalizing
the deal including facilitating the open interest transfer to guarantee a
smooth transition for position holders. The two exchanges are committed to ensuring
investor services remain uninterrupted at all levels such as customer support
during and after the transition.

Handlers
of the deal remain optimistic that the integration of the two platforms would
be finalized by next month. Both Nasdaq and EEX Group hope to finalize the
transfer of all open Dry Bulk Freight positions by next year February.

However, contracts
for Crude Oil, Natural Gas, and Ferrous Metals will be transferred in spring 2020.

“Nodal continues to grow its power futures market, and we expanded into natural gas in September,” Chairman and CEO of Nodal Exchange and Nodal Clear Paul Cusenza said.

“We are extremely pleased to be able to build upon the business NFX successfully created, to further expand our products and services in power and gas and to introduce oil and ferrous metals contracts thereby further broadening the commodity markets we serve.

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