CME Group Inc. rival ELX Futures L.P. got the regulatory green light to open an electronic exchange offering futures on U.S. Treasuries.
On board for the planned June launch will be ELXs founders including BCG Partners Inc., Citadel Investment Group, Citigroup Inc., Deutsche Bank A.G., Bank of America-Merrill Lynch, Barclays PLC, Credit Suisse Group, Getco, J. P. Morgan Chase & Co., Peak6, and Royal Bank of Scotland PLC as well as a number of high-volume traders that ELX has signed on, executives say.
We are confident that ELX Futures will be a strong and needed competitive alternative in the mainstream futures exchange marketplace that will benefit all market participants, CEO Neal Wolkoff said in a statement Wednesday announcing approval by the Commodity Futures Trading Commission.
But bad blood between a Chicago software executive and one of ELXs New York-based founders may keep some traders from accessing the new market.
Harris Brumfield, a former Treasury futures floor trader at the CME-owned Chicago Board of Trade, sued BCG Co-CEO Howard Lutnick several years ago over alleged patent infringement. Mr. Brumfield, who runs software firm Trading Technologies International Inc., claimed that Mr. Lutnicks firm, known at the time as eSpeed Inc., illegally copied Mr. Brumfields software.
Now, Mr. Lutnicks firm is the technology provider to ELX. And Mr. Brumfield whose website claims that half of the volume at the worlds five biggest exchanges goes through Trading Technologies trading platform has refused to connect to the fledgling exchange.