exchange CME Group Inc. will temporarily waive fees for five
ferrous derivatives contracts in a bid to attract further
liquidity to the exchange.
The six-month fee waiver started
Nov. 21 and will run until May 21, 2013, the Chicago-based
Fees have been waived for the
CMEs 62-percent Fe c.f.r. China iron ore futures and
c.f.r. China average price options priced off the Steel Index
(TSI), which is owned by Platts. Fees have also been waived for
62-percent Fe c.f.r. North China futures and c.f.r. China
futures contracts priced off Platts iron ore index.
The CMEs Chinese steel
rebar HRB400 swap futures contract, priced off Chinas
Mysteel, has also had its fee waived.
"We wanted to put in a fee
waiver to encourage increased volumes," CME metals products
director Martin Evans told AMM sister publication
CME Group will not waive fees
for its U.S. and Turkish ferrous scrap, Black Sea steel billet,
U.S. and European steel coil, and Australian coking coal swaps
contracts. The CMEs U.S. scrap futures contract is
financially settled against
AMMs Midwest Ferrous Scrap Index for No. 1
Traders said that the fee
holiday could attract new participants to the market as well as
those looking to trade the arbitrage between different steel
The move comes as ferrous
derivatives traders assess the implications of new U.S.
financial regulations on their activities.
Under the Dodd-Frank Act, all
clearers of swaps for U.S. customers must be registered as
designated clearing organizations (DCOs). The Singapore
Exchange, the iron ore swaps contracts most popular
clearing venue, is not yet registered as a DCO, meaning that
U.S.-registered market participants will not be able to clear
on the exchange when the legislation goes into effect.
The change in regulation,
coupled with CMEs ferrous contract fee waiver, could see
some iron ore swaps market participants moving over to the U.S.
exchange, market sources said.