CME Group Announces the Launch of a Suite of European Natural Gas Contracts on CME Europe

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Dec 18, 2014, 04:30 ET

LONDON, Dec. 18, 2014 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives market place, announced today the launch of the first suite of physically and financially settled European natural gas cleared futures contracts. The contracts will be listed on CME Group's European exchange, CME Europe for first trade date on 19 January, 2015 and are authorised and approved by the United Kingdom (UK) Financial Conduct Authority.

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The new suite of physically and financially settled European natural gas contracts, are the first to be introduced on CME Europe since its launch in April with foreign exchange and biofuel contracts. There will be four physically delivered and eight financially settled exchange-traded natural gas futures on CME Europe. The physically delivered futures contracts are in the two major natural gas hubs in Europe: the UK National Balancing Point (NBP) and the Dutch Title Transfer Facility (TTF). The financially settled futures will be based on the ICIS Heren Natural Gas Indices for UK, Dutch, Austrian and German natural gas hubs. The natural gas contracts will be available on Clearport and Globex and distributed via the Trayport platform alongside other exchange products.

"While the European Gas landscape is shifting, these new cleared futures contracts will give our customers access to the enhanced risk management contracts they have asked us to provide in a volatile marketplace," said Martin Fraenkel, Global Head of Energy, CME Group. "We are launching these contracts now to serve the risk management needs of the gas market participants who are showing an increased interest in using cleared futures alongside their traditional over-the-counter positions. A large percentage of trades in the European natural gas market are brokered and executed on a bilateral basis so these contracts have been designed with that in mind. They offer the market the opportunity to execute their trades bilaterally and submit them to the exchange and clearing house. This increases capital efficiencies because it means clients do not have to rely on bilateral credit lines."

Natural gas is a key component in Europe's energy supply chain and is widely used across a number of different industrial sectors. The method of delivery includes pipelines, liquefied natural gas vessels and regasification terminals. The latter two are likely to play an increasingly important role for in the market as more infrastructure is built to cope with expectations of rising supply. These contracts will be based on the most liquid of the underlying European Natural Gas markets.

CME Group offers cleared futures and options for the most extensive and liquid energy complex in the world including: a suite of natural gas led by our Henry Hub future that is recognised as the most widely traded benchmark for natural gas in the world; all three global crude oil benchmarks; refined products; biofuels; coal and electricity contracts.

These contracts will be subject to the rules of CME Europe and cleared via CME Clearing Europe, CME Group's European clearing house. A complete list of products, members and product specifications can be found at http://www.cmegroup.com/europe/.

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform, its trading facilities in New York and Chicago, and through its London-based CME Europe derivatives exchange. CME Group also operates one of the world's leading central counterparty clearing providers through CME Clearing and CME Clearing Europe, which offer clearing and settlement services across asset classes for exchange-traded contracts and over-the-counter derivatives transactions. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. KCBOT, KCBT and Kansas City Board of Trade are trademarks of The Board of Trade of Kansas City, Missouri, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at www.cmegroup.com.

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SOURCE CME Group