The international derivatives exchange Eurex today announced that it has reached a license agreement with IPD (Investment Property Databank) and intends to launch futures on the total returns of Investment Property Databank (IPD) Property Indices. The new offering will be launched in the first quarter of 2009. The introduction represents for the first time that returns on European commercial property, one of the world's largest asset classes, will be available at an exchange.
Peter Reitz, member of the Eurex Executive Board, said, "I am very pleased that we will be the first European exchange to offer property derivatives to our customers. The scope and coverage of IPD indices, their consistency and transparency make them the ideal provider of independent and comparable data on which to build exchange listed property derivatives. Our offering will foster the property markets by adding liquidity, transparent pricing and effective risk management tools. Through our central clearing we eliminate counterparty risks."
Ian Cullen, IPD's co-founding Director, commented, "Since the growth in the use of OTC property derivatives began in 2004, IPD's central aim has been to support all market participants to the best of our abilities. We have become convinced over the past months that this exciting new market is now ready for the boost that can be provided by the introduction of standardized, homogeneous on-exchange products and services, and that Eurex will be a sympathetic partner in facilitating the next logical stage in the development of this new market."
Nick Scarles, Chairman of the Property Derivatives Interest Group (PDIG) and Group Finance Director, Grosvenor Group, said, "This is a crucial milestone in the evolution of the property derivatives market. An active property derivatives futures market provides a forum for liquidity and transparent pricing, and all using standardized contracts. This will facilitate the more efficient management of counterparty credit risk, with credit support being provided under an exchange's rules, and with more effective netting of credit exposures. Market participants will be able to increase their property derivatives trading activity, while maintaining counterparty credit risk at acceptable levels."
Eurex will initially introduce annual contracts that will capture the annual returns on the industry standard IPD UK All Properties Total Return Index. With the introduction of the IPD Index futures, Eurex aims to work with the current market participants to provide the benefits of an exchange-traded contract to existing OTC derivative players and to attract new market participants and liquidity to this asset class.
About Eurex
The international derivatives exchange Eurex, jointly owned by Deutsche Börse AG and SIX Swiss Exchange AG, organizes markets globally. Eurex is home to the Euro zone interest rate and equity index benchmark derivatives. Eurex's portfolio of markets includes International Securities Exchange, the world's largest equity options exchange. The ECNs Eurex Repo and Eurex Bonds round out Eurex's offering for repo and bond trading. In addition, Eurex provides an automated and integrated clearing house, Eurex Clearing AG. Eurex's global liquidity network comprises around 400 direct exchange members in 22 countries worldwide.
For more information about Eurex, visit www.eurexchange.com.
About IPD
IPD is a global information business, dedicated to the objective measurement of commercial real estate performance. As the world's number one provider of real estate performance analysis for funds, investors, managers and occupiers, we offer a full range of services including research, reporting, benchmarking, conferences and indices. We operate in over 20 countries including most of Europe, the US, Canada, Australia, New Zealand and Japan. Our indices are the basis for the developing commercial property derivatives market, and the most authoritative measures of real estate returns worldwide. For further information visit www.ipd.com.
About PDIG
Launched in September 2005, the Property Derivatives Interest Group (PDIG) is part of the Investment Property Forum (IPF). Its aim is to enhance the knowledge and understanding of property derivatives amongst key members of the property and financial services industries, in order to encourage the further development of an orderly and liquid market. PDIG is managed by a Steering Group, comprising a number of key individuals from the banking, broking, property and specialist financial industries.
Peter Reitz, member of the Eurex Executive Board, said, "I am very pleased that we will be the first European exchange to offer property derivatives to our customers. The scope and coverage of IPD indices, their consistency and transparency make them the ideal provider of independent and comparable data on which to build exchange listed property derivatives. Our offering will foster the property markets by adding liquidity, transparent pricing and effective risk management tools. Through our central clearing we eliminate counterparty risks."
Ian Cullen, IPD's co-founding Director, commented, "Since the growth in the use of OTC property derivatives began in 2004, IPD's central aim has been to support all market participants to the best of our abilities. We have become convinced over the past months that this exciting new market is now ready for the boost that can be provided by the introduction of standardized, homogeneous on-exchange products and services, and that Eurex will be a sympathetic partner in facilitating the next logical stage in the development of this new market."
Nick Scarles, Chairman of the Property Derivatives Interest Group (PDIG) and Group Finance Director, Grosvenor Group, said, "This is a crucial milestone in the evolution of the property derivatives market. An active property derivatives futures market provides a forum for liquidity and transparent pricing, and all using standardized contracts. This will facilitate the more efficient management of counterparty credit risk, with credit support being provided under an exchange's rules, and with more effective netting of credit exposures. Market participants will be able to increase their property derivatives trading activity, while maintaining counterparty credit risk at acceptable levels."
Eurex will initially introduce annual contracts that will capture the annual returns on the industry standard IPD UK All Properties Total Return Index. With the introduction of the IPD Index futures, Eurex aims to work with the current market participants to provide the benefits of an exchange-traded contract to existing OTC derivative players and to attract new market participants and liquidity to this asset class.
About Eurex
The international derivatives exchange Eurex, jointly owned by Deutsche Börse AG and SIX Swiss Exchange AG, organizes markets globally. Eurex is home to the Euro zone interest rate and equity index benchmark derivatives. Eurex's portfolio of markets includes International Securities Exchange, the world's largest equity options exchange. The ECNs Eurex Repo and Eurex Bonds round out Eurex's offering for repo and bond trading. In addition, Eurex provides an automated and integrated clearing house, Eurex Clearing AG. Eurex's global liquidity network comprises around 400 direct exchange members in 22 countries worldwide.
For more information about Eurex, visit www.eurexchange.com.
About IPD
IPD is a global information business, dedicated to the objective measurement of commercial real estate performance. As the world's number one provider of real estate performance analysis for funds, investors, managers and occupiers, we offer a full range of services including research, reporting, benchmarking, conferences and indices. We operate in over 20 countries including most of Europe, the US, Canada, Australia, New Zealand and Japan. Our indices are the basis for the developing commercial property derivatives market, and the most authoritative measures of real estate returns worldwide. For further information visit www.ipd.com.
About PDIG
Launched in September 2005, the Property Derivatives Interest Group (PDIG) is part of the Investment Property Forum (IPF). Its aim is to enhance the knowledge and understanding of property derivatives amongst key members of the property and financial services industries, in order to encourage the further development of an orderly and liquid market. PDIG is managed by a Steering Group, comprising a number of key individuals from the banking, broking, property and specialist financial industries.
