The Swiss-German derivatives exchange Eurex has filed antitrust charges against the Chicago Mercantile Exchange and Chicago Board of Trade, accusing them of trying to keep it out of the US market.
The lawsuit reflects the intense jockeying for competitive position as Eurex, the world's largest derivatives exchange, prepares to take on the venerable Chicago exchanges. The European company is planning to open an all-electronic exchange in Chicago in February that will allow anyone to trade derivatives such as the US T-bond futures for the same fees.
The vast majority of trade in US Treasury futures currently goes through the CBOT, which still operates the traditional, and more expensive "open outcry" pit trading that has been made obsolete by electronic trading in Europe.
Eurex alleges in the suit, filed in the US District Court for the District of Columbia, that the CBOT and CME had offered illegal financial inducements worth more than $100m (£60m) to shareholders of The Clearing Corp to vote against a restructuring. The Clearing Corp is set to provide clearing services for Eurex's new customers in the US, while Eurex will take a minority stake in the clearing house under the deal.
The Clearing Corp is owned by 87 futures brokers, who are due to vote on the proposed restructuring next Thursday. The Board of Trade is set to switch its clearing business from the Clearing Corp to the Mercantile Exchange next month.
The lawsuit claims that the Chicago exchanges collaborated to launch the offer to Clearing Corp's shareholders to preserve its monopoly position in clearing. "We feel that the financial offer is improper and is a financial inducement that is anti-competitive," Michael McErlean, the director of Eurex's US exchange, said.
"This suit is absolutely without factual or legal foundation," Craig Donohue, who is set to become CME's chief executive next year, told Bloomberg News.
The potential for Eurex to open a US branch in February was thrown into disarray yesterday as regulators took its application off a 60-day "fast track" for review.