The new future will be denominated in US dollar, settled in cash and will have quarterly expiration dates
The international derivatives exchange Eurex has said that it would launch a new equity index future based on the MSCI Japan on 26 October 2009. With this extension, it continues to broaden its coverage of major foreign benchmark indices. Reportedly, the new future will be its first derivative based on an Asian equity index.
Eurex has said that the new future will be denominated in US dollar, settled in cash and will have quarterly expiration dates. As underlying it uses the net total return version of the MSCI Japan, which is the standard in the OTC market (Total Return Swaps) as well as with investment funds and exchange-traded funds.
To support order book trading, a market making scheme will be initiated to ensure on-screen liquidity. Trading hours will be from 8 am until 10 pm CET. In order to be in line with the Japanese market, settlement day will be the second instead of the third Friday, usually used for other Eurex index futures.
Peter Reitz, member of the Eurex executive board, said: “The MSCI Japan future extends our existing suite of foreign equity indices, among them the MSCI Russia future. Nowadays, many participants in financial markets invest globally. The Japanese cash market is the largest and most important market in Asia. With our MSCI Japan future we enable our European and US customers, in particular, to better hedge their Japanese equity exposure and offer at the same time new trading opportunities.”