Eurex gains control of a/c/e as alliance with CBOT is ‘restructured’

European derivatives exchange Eurex has acquired full ownership of a/c/e, the electronic trading platform it shared with the Chicago Board of Trade (CBOT). The move restructures a partnership agreement with the Chicago exchange which has been in place for the past three years, during which time Eurex publicly criticised the CBOT for failing to invest in the platform.

The exchanges have agreed on new contractual arrangements that will see the CBOT pay Eurex a non-exclusive licensing fee for the use of a/c/e, which stands for alliance/CBOT/Eurex. The CBOT will waive its co-ownership rights and will be relieved of any obligations to fund development costs.

“The original agreements from today’s perspective were too exclusive and too restrictive,” said Rudolph Ferscha, chief executive of Eurex. “The two exchanges were getting in each other’s way without gaining anything.”

The first a/c/e initiative, which started in October 1999, was designed to give Eurex customers access to CBOT products while providing the Chicago exchange with an electronic trading capability.

Both exchanges were originally committed to financing the development costs of a/c/e, but in April last year Ferscha said the CBOT had not implemented its part of an agreement to upgrade software systems. “It’s up to them to deliver what they owe,” he said in an interview with a British newspaper.

Eurex and the CBOT claimed the new arrangement gives them more flexibility to serve their customers.

David Vitale, chief executive of the CBOT, said now that the relationship with Eurex was “less close”, his exchange is free to talk to other groups with regard to potential alliances. “There aren’t any on the table, but we have the flexibility to do that today,” he said.

The CBOT’s licence covers the current version of a/c/e and a new software version – a/c/e 1.1, which is due for implementation in the first quarter of next year.