MSCI index futures to trade in Europe Institutional investors will be able to trade some of their key MSCI benchmark indices as futures in Europe after the index provider announced plans on Thursday to list them on the region's two main derivatives exchanges. In the coming weeks the US-based group will launch futures and options of popular benchmark indices on NYSE Liffe, part of NYSE Euronext, and Eurex, owned by Deutsche Börse. MSCI indices are frequently used by pension funds and asset managers to provide the framework for their investments. Institutional investors and fund managers wanting to use derivatives to offset their risk to an MSCI index have historically had to either use an over-the-counter (OTC) product like a swap, or a listed derivative offered by a rival such as FTSE or DJ Stoxx. The move comes as asset managers and exchanges are faced with sweeping changes to derivatives trading by global regulation. More of the vast but opaque off-exchange derivatives market is set to move on to transparent electronic trading venues as part of a G20 push to safeguard markets against systemic risk. "In the light of the upcoming regulatory changes, it is very positive for us to have listed, liquid alternatives to OTC swap transactions," said Eicke Reneerkens, head of derivatives trading at Union Investment. MSCI is also looking to expand its business in the face of fierce competition from rivals. Last year it suffered a blow when Vanguard, one of the world's largest mutual fund managers, switched six of its key index-tracking funds to rival FTSE International, owned by the London Stock Exchange. Eurex will offer futures and options based on the MSCI World, MSCI Europe, MSCI All Countries Asia Pacific ex-Japan and futures on the MSCI Frontier Markets. Liffe will add the MSCI Europe index to its central order book. Further derivatives of MSCI indices will be added on both exchanges later this year. Eurex also said it would explore letting investors net the margin they are required to post when trading other benchmark index derivatives at the exchange, such as the Euro Stoxx 50. By contrast, NYSE Liffe has steadily been building market liquidity via bClear, its cleared service for OTC equity derivatives, since 2009. It has open interest of around $7.9bn from more than 220,000 contracts on more than 40 MSCI index-linked contracts. BNP Paribas and Credit Suisse have indicated they will be early users of the contracts.