Santander Asset Management, backed by Banco Santander and Deutsche Bank, has expanded its listed FX derivatives business to Eurex, as part of a growing trend to centrally clear FX futures and options.

Interest in the growing volume of FX derivatives traded on the European Futures Exchange (Eurex) is evident, which has nearly tripled since 2020, with a 16% increase in Q1 2024 compared to Q1 2023.

Santander Asset Management explores FX options trading on Eurex

The Spanish asset manager's decision to trade and clear listed FX derivatives on Eurex highlights the growing market demand for centrally cleared FX futures and options. Market participants are increasingly turning to these instruments to reduce counterparty credit risk, comply with unliquidated margin rules (UMR) and optimize the cost of capital.

By joining the Eurex FX ecosystem, Santander Asset Management aims to benefit from low transaction costs and regulatory certainty within the European Union.Jens Quiram, Global Head of FIC Derivatives and Repo Sales at Eurex said, "This is a great boost for us to become a leading FX liquidity center in Europe."

Santander Asset Management's expansion plans are not limited to FX futures, as the company also intends to establish a FX options business. Santander Asset Management, in partnership with Deutsche Bank, is already swapping.

Imanol Urquizu, Head of Derivatives at Santander Asset Management, added: "In addition to our participation in FX futures, we are actively working with a number of FX dealers to explore FX options trading on Eurex." "Integrating FX futures and FX options into the Eurex ecosystem improves operational efficiency and enhances our net risk capacity."

Eurex's FX Derivatives Trading Volume Soars 16% in Q1 2024

The volume of FX derivatives traded on Eurex has grown significantly in recent years. in 2023, more than 1.7 million contracts were traded on the exchange, almost triple the 600,000 contracts traded in 2020. in the first quarter of 2024, the number of contracts traded increased by 16% to 586,000 compared to the same period in 2023.

"Trading FX on Eurex enables clients to benefit from the efficiencies of the listed derivatives market, which is where Deutsche Bank works with clients and trading venues to provide liquidity Mario Muth, Global Head of Platforms and Listed Derivatives Sales and Head of Fixed Income Market Structuring, Deutsche Bank, concludes.

The good performance of Eurex was also confirmed in a report earlier this year, when the derivatives exchange announced its January 2024 trading volumes. Compared to the previous year, trading volumes increased by 6%.

This year also saw a change of CEO at Eurex, with Robbert Booij becoming the new CEO at the end of January, replacing Michael Peters, who had held the position since July 2020 and was scheduled to retire in September.