Eurex launches a new first: STOXX Semiconductor 30 Index Futures
“Recent global uncertainties have prompted nations to prioritize the secure production and distribution of semiconductors. Consequently, our STOXX Semiconductor 30 Index Futures are reflecting the growing appetite for semiconductors as a new investment theme. We are seeing a noticeable demand from Asia in particular, as Taiwanese companies are well represented in the index.”
Eurex, Deutsche Boerse’s derivatives arm, has introduced a new addition to its sector index futures with the launch of the STOXX Semiconductor 30 Index Futures contract.
The introduction of this futures contract, the first by Eurex on the semiconductor sector, comes in response to the sector’s growing influence in areas such as communication, technology, and defense, spurred by advancements in artificial intelligence and autonomous driving.
30 largest global semiconductor listed in the US, including Nvidia
Developed in collaboration with Deutsche Boerse’s index provider ISS STOXX, the new index captures the performance of the 30 largest global semiconductor companies listed on U.S. exchanges, including prominent names like Nvidia.
The index is denominated in USD and operates as a price return index. With its recent launch, the STOXX Semiconductor 30 Index Futures will be available for trading continuously from 1:00 CET to 22:15 CET, aligning with trading hours in the U.S. and Asia.
This initiative is supported by a liquidity provider scheme from its inception, featuring incentives such as rebates and revenue sharing. The launch has garnered significant interest, particularly from Asian investors, due to the presence of Taiwanese companies in the index and recent global challenges emphasizing the need for secure semiconductor production and distribution.
Strong investor demand from Asia
Randolf Roth, Member of the Eurex Executive Board: “Recent global uncertainties have prompted nations to prioritize the secure production and distribution of semiconductors. Consequently, our STOXX Semiconductor 30 Index Futures are reflecting the growing appetite for semiconductors as a new investment theme. We are seeing a noticeable demand from Asia in particular, as Taiwanese companies are well represented in the index.”
Axel Lomholt, General Manager at STOXX: “The STOXX Semiconductor 30 Index represents the leading companies within a rapidly flourishing industry, all meticulously selected through a rules-based and transparent methodology. Our great collaboration with Eurex reflects a terrific opportunity to further enrich the derivatives market, particularly in combination with themes and sectors, leveraging our innovative index-based solutions.“
In a significant move within the trading industry, Eurex, Europe’s leading derivatives exchange, has announced the launch of new derivatives focused on Environment, Social, and Governance (ESG) indices. This development comes closely on the heels of the International Swaps and Derivatives Association (ISDA) introducing a comprehensive sustainability-linked derivatives (SLD) clause library.
ISDA’s pioneering effort for SLDs
ISDA’s new clause library aims to standardize the burgeoning field of SLDs. These derivatives incorporate sustainability-linked cash flows, relying on key performance indicators (KPIs) to ensure adherence to ESG targets. The initiative, led by ISDA Chief Executive Scott O’Malia, promises to streamline negotiation processes and reduce risks in this highly bespoke market segment.
“By their nature, SLDs are highly bespoke transactions, but the language that describes the terms and the objectives doesn’t have to be. The ISDA SLD Clause Library is designed to eliminate unnecessary differences and bring greater standardization to this market. This will bring more efficiency to the negotiation process and reduce risks, setting the foundations for this market to develop further,” said O’Malia.
ESG: Eurex launched suite of Socially Responsible Investing (SRI) futures
Earlier this year, Eurex launched new derivatives focused on Environment, Social, and Governance (ESG) indices. This development came closely on the heels of the International Swaps and Derivatives Association (ISDA) introducing a comprehensive sustainability-linked derivatives (SLD) clause library.
ISDA’s new clause library aims to standardize the burgeoning field of SLDs. These derivatives incorporate sustainability-linked cash flows, relying on key performance indicators (KPIs) to ensure adherence to ESG targets. The initiative, led by ISDA Chief Executive Scott O’Malia, promises to streamline negotiation processes and reduce risks in this highly bespoke market segment.
The ISDA SLD Clause Library, available on the ISDA MyLibrary platform, includes provisions for evidence of sustainability performance, mechanisms for adjusting cash flows based on ESG target compliance, and options for handling disruptions.
Aligning with these industry advancements, Eurex has broaden its ESG derivatives offerings with the introduction of futures on various Socially Responsible Investing (SRI) indices, including STOXX Europe 600 SRI, MSCI SRI Europe, USA, World, and Emerging Markets. These derivatives are designed to meet the needs of investors with stringent ESG mandates, such as asset managers for endowment funds or foundations.
Eurex’s product suite already includes sustainable versions of established benchmarks, with a methodology ranging from negative ESG screening to best-in-class approaches. Since introducing its first ESG derivatives in 2019, Eurex has seen a steady increase in trading volumes, cementing its position as a leading liquidity pool for ESG derivatives globally.
