Changes from Exchanges: Interesting Developments from the LME, Eurex and MGEX
You can’t spell “exchange” without “change” and the first half of 2025 is slated to deliver some highly anticipated changes at several exchanges. The launch of LME 10, an enhanced drop copy service at Eurex, and migration of MGEX trading to MIAX technology are all interesting developments that not only bear watching but also may signal new business opportunities.
LME 10
Long delayed and eagerly anticipated, the launch of LMEselect v10 will deliver a number of new benefits along with several challenges for market participants. It represents a much needed updating of technology and offers lower latency, new pre-trade risk management capabilities, and new functionality including persistent and GTC orders. At the same, v10 is entirely new technology and will have impacts that affect the full stack of middle and back office functions. The large and diverse members of the LME trading community have work to do to ensure that all processes function smoothly after the switch over.
LMEselect v10 is scheduled to launch on March 24, 2025.
Enhanced Drop Copy at Eurex
There has long been a gap when it comes to trading data at Eurex and the Enhanced Drop Copy (EDC) / Exchange Drop Copy Interface (EDCI) will rectify this omission.
Specifically, data pertaining to “Lean” orders has not been available in previous drop copy versions. Lean orders were designed to improve throughput and reduce latency for high-frequency trading but their exclusion from drop copy services left a gaping hole in order, transaction, and risk management for internal risk managers, brokers, and FCMs. EDC “is designed for participants seeking to enhance their pre-trade risk monitoring capabilities, or who specifically want to gain a comprehensive overview of their order inventory including lean orders, e.g. for the purpose of reconciliation.” As such, it is a valuable missing piece from the Eurex risk puzzle and its inclusion will enhance insights for traders, risk managers, and executives.
EDCI is also slated to go-live on March 24, 2025.
MGEX and MIAX
When it comes to futures exchanges, the Minneapolis Grain Exchange (MGEX) isn’t very near the big leagues. Their largest contract, Minneapolis Hard Red Winter Wheat, traded a record 3.1 million contracts in 2024 but, in an industry where monthly volume in agricultural futures regularly tops 250 million contracts, that barely moves the needle for most industry participants.
However, MGEX is of interest at least in part due to who their parent is. Miami International Holdings (MIAX) is a dynamic exchange operator and technology firm beyond MGEX and they have shown themselves to be capable innovators as they have grown volumes, primarily in equity options, and evolved their corporate structure. The migration of MGEX from CME Globex to its homegrown MIAX Futures Onyx platform could set the stage for continued innovation and growth. It bears paying attention to what MIAX is up to.
Migration to the Onyx platform is expected in Q2 2025.
Staying on top of exchange changes
The trading industry is always in a state of evolution and it is important to stay on top of what’s new because today’s innovation often becomes tomorrow’s opportunity. The upcoming changes at the LME, Eurex, and MGEX/MIAX vary in degree of importance from major to minor but all deserve the attention of industry professionals. It pays to be prepared for where the next opportunity may be coming from and BornTec is here to assist in making the most of those opportunities.
For more information
Andy Jennings is EMEA Director of BornTec, a technology solutions firm that provides data management and tools to support operational resilience and surveillance, risk, compliance, and regulatory reporting functions in financial markets. Contact us to learn more.