BGC (BGC.US) launches FMX futures exchange to challenge the dominant position of the Chicago Mercantile Exchange (CME.US)

It is noted that the newly established FMX Futures Exchange is created by BGC (BGC.US) and has the support of top investment banks and market makers. The exchange was launched later on Monday with the aim to challenge the dominant position of the Chicago Mercantile Exchange (CME.US) in the interest rate futures trading arena. The platform initially launched secured overnight financing rate (SOFR) futures, with US Treasury futures set to join in the first quarter of 2025. The exchange is part of the FMX Holdings company, which also operates the FMX UST and FX platforms. The company is backed by Wall Street giants including Bank of America Corp, Citadel Securities, and JPMorgan Chase. FMX will clear its futures through LCH, a clearinghouse controlled by the London Stock Exchange. Interest rate futures are the most widely traded contracts in the world, with daily trading volumes exceeding $40 trillion last year. The FMX exchange is the third attempt by BGC and Cantor Fitzgerald CEO Howard Lutnick to challenge the Chicago Mercantile Exchange (CME) in the interest rate futures market. Analysts at Bank of America Corp recently warned: "We believe this poses the most credible threat to CME's decades-long monopoly in interest rate futures." The exchange may force CME to lower its interest rate futures pricing by more than 10%, as a defensive strategy. Terry Duffy, CEO of the Chicago Mercantile Exchange (CME), said in an interview in July: "I'm not sure what Lutnick's issuance will result in." He mentioned potential issues the exchange may face relying on London LCH. Lutnick responded: "I have great respect for CME and Terry Duffy." "I think it is now their turn to show us the respect we deserve at BGC. FMX and BGC will continue to stay here."