BGC Group, Inc., a prominent global brokerage and financial technology company, recently unveiled that the FMX Futures Exchange has secured the coveted approval from the Commodity Futures Trading Commission (CFTC) to commence operations as an exchange specializing in US Treasury and SOFR (Secured Overnight Financing Rate) futures.
These futures contracts stand as some of the most extensively traded financial instruments worldwide.
A key facet of FMX’s operational prowess lies in its clearing agreement with LCH SwapClear, a heavyweight in the realm of interest rate collateral holdings.
This strategic alignment endows FMX with a unique competitive edge in the US interest rate market. Robert Allen, the President of FMX Futures Exchange, highlighted this advantage, asserting, “FMX’s global reach and expansive distribution, coupled with LCH’s highly efficient cross-margining advantages, will pose a formidable challenge to CME’s highly valuable U.S. interest rate complex.
FMX is the first and only exchange equipped with all the requisite tools to thrive and expand in the world’s most pivotal market.”
Howard W. Lutnick, the Chairman and CEO of BGC Group, expressed his enthusiasm, stating, “With the CFTC’s seal of approval, we will amalgamate our leading Fenics UST cash Treasury platform with our FMX Futures Exchange, thereby introducing competition into CME’s U.S. interest rate complex.
This marks the first instance where the world’s most valuable futures market will experience genuine competition.”
Lutnick underscored the accomplishments of Fenics UST in the US Treasury market, noting, “Much like U.S. interest rate futures, the wholesale U.S.
Treasury market had traditionally been dominated by the CME until the advent of Fenics UST.
Since our inception, Fenics UST has enjoyed substantial growth, capturing a 25 percent market share during the third quarter of 2023, up from 18 percent just a year ago. We plan to employ the same playbook with our FMX Futures Exchange.”
In the third quarter of 2023, BGC Group witnessed remarkable financial results, with a notable 15.9% surge in revenue, reaching $482.7 million.
This growth was particularly pronounced, with a 19% uptick across the Americas, a 16.9% increase in the EMEA region, and a 5.9% expansion in the Asia Pacific, as highlighted by Finance Magnates.
The Rates and Credit revenues witnessed a 12.1% improvement, FX revenues rose by 8.6%, and Energy and Commodities revenues exhibited robust growth, soaring by 35%.
The pre-tax adjusted earnings of BGC Group also posted a robust increase of 23.1%, totaling $101.9 million, accompanied by a 125 basis points enhancement in margins, which stood at 21.1%.
Post-tax adjusted earnings recorded a 21.4% rise to $94.1 million ($0.19 per share), and adjusted EBITDA experienced a remarkable surge of 27% year-on-year, reaching $135.9 million, marking the twelfth consecutive quarter of year-on-year margin expansion.