BrokerTec Futures Exchange, the online futures market set up by leading US brokerages, is to cease trading later this month in the face of dwindling volumes.
The decision to shut up shop marks the end of a two-year attempt by the consortium-onwed screen exchange to steal liquidity from the dominant Chicago future markets. The closure comes ahead of a bid by Swiss-German derivatives exchange Eurex to establish a new US futures exchange in competition with the Chicago Mercantile Exchange and neighbouring Chicago Board of Trade.
It's understood that trading volumes over the BrokerTec futures platform had begun to dry up as the exchange failed to penetrate the wider market beyond its core owners. In a statement, BrokerTec said that it had made "no final decision regarding the future operations of the exchange".
The statement holds out the possibility that Eurex may yet make an offer for the BrokerTec business should its own bid for exchange status in the US stall in the face of demands by the Chicago exchanges for greater regulatory scrutiny.
Inter-dealer broker Icap completed the acqusition of BrokerTec's fixed income business in April. The sale of the business followed a US Department of Justice investigation into possible anti-competitive behaviour by the 30 brokerages backing the fixed income platform.