BGC Group has obtained investments from ten global investment banks and market-making firms for its new Treasuries and interest rate futures trading platform. Bank of America, Barclays, Citadel Securities, Citi, Goldman Sachs, JP Morgan, Jump Trading Group, Morgan Stanley, Tower Research Capital, and Wells Fargo are now minority stakeholders in FMX.
The trading platform, valued at $667 million, focuses on US Treasury and interest rate futures trading. It merges BGC’s US cash treasuries and spot foreign exchange platforms with a US interest rate futures exchange.
US Treasury and Interest Rate Futures Trading
Howard Lutnick, the Chairman and CEO of BGC Group and Chairman of FMX, mentioned: “We have brought together ten of the most important global investment banks and market-making firms to create a premier trading venue for the interest rate markets. We offered ownership to this incredible investment group, knowing the enormous value they bring to FMX, which will benefit all market participants.”
According to the press release, FMX Futures has secured CFTC approval and is scheduled to launch in September 2024. The platform's cash US Treasury arm, FMX UST, has experienced remarkable growth, capturing a market share of 28% by the end of the first quarter of 2024.
Lou Scotto, the CEO of FMX, highlighted the platform's potential for rapid expansion with support from key financial players. Through partnerships, including with LCH, FMX aims to offer portfolio-margining capabilities in the US interest rate markets.
Positive Financial Performance
In February, BGC Group released its financial results for the fourth quarter and full year of 2023. The firm reported a double-digit growth in both revenue and earnings. The group's revenue reached $516.8 million in Q4, representing an uptick of 18.4%. This achievement represented the highest performance ever recorded for the fourth quarter.
BGC Group's positive financial performance was driven by business operations in the Americas and EMEA region, which experienced substantial improvements of 21.9% and 20.5%, respectively.
Pre-tax adjusted earnings surged 27.3% to $110.8 million, with margins improving 149 basis points to 21.4%. Post-tax adjusted earnings also saw a substantial increase of 29.2% to $101.3 million, translating to $0.21 per share and representing an improvement of 31.3%.
