USFE | Spot Equivalent Futures 1. Which currencies trade as SEFs? USFE's six initial currency pair contracts include the U.S. dollar against the Euro, Japanese yen, British pound, Swiss franc, Canadian dollar, and Australian dollar. 2. Will USFE introduce SEFs on other currency pairs? USFE is continually evaluating the needs in the marketplace and seeking new products and currency pairs that have particular interest among investors. 3. How is USFE able to offer FX SEF products in a regulated environment? Recognizing the widespread use and familiarity of OTC platforms, USFE has created futures that replicate spot trading, but feature the security and clearing associated with a fully regulated exchange. In addition to price quotations that mimic the spot market, and daily settlement to spot prices, USFE has separated the daily cost-of-carry payment from the futures contract itself. At USFE, the payment is made separately and automatically on a daily basis, from contract buyer to contract seller. Separation of this payment allows the SEF contract to trade exactly as a spot contract does. 4. How is cost-of-carry calculated with FX SEF contracts? USFE separates the cost-of-carry payment from the future itself. The separate payment is made automatically overnight through existing clearing mechanisms. Interest rate values are based on applicable Repo rates as quoted by Bloomberg. 5. Where do the FX SEF contracts clear? All USFE trades are cleared through The Clearing Corporation. 6. What are the trading hours for FX SEF? FX SEF products trade 23 hours per day. Please refer our Trading Hours page for exact contract hours. 7. How did USFE design the FX SEF contract structure? The FX SEF product combines the best aspects of FX spot and exchange trading to create a unique futures contract. FX SEFs employ the familiarity of spot quotations and settlement to spot prices, but trade with the protections and securities of a regulated U.S. exchange venue. Futures trading also offers specific leverage opportunities and tax treatment (please consult your tax advisor). 8. Why does USFE believe the market is ready for FX SEF? The growing popularity of the global currency markets and the need for an easier to use and exchange-regulated product led USFE to develop and implement FX SEFs. USFE has also worked with back office vendors to facilitate smooth trading throughout platform interfaces, software requirements and The Clearing Corporation. 9. Who is the primary audience for FX SEF? FX SEFs are sized at 50,000 notional per contract, making them ideal for retail or individual investors. 10. What are the benefits of trading FX SEF rather than available spot products or traditional FX futures? FX SEFs offer the customer protections of a regulated exchange, which are significant advantages not found in the spot market. These include a central clearing counterparty and defined market regulation. As compared with traditional FX futures, FX SEFs are quoted in spot format, which is more widely known and straightforward. USFE's futures are also sized appropriately for a retail or individual trader, while traditional futures are much larger and therefore require more capital for trading. 11. How is this product different from other FX futures contracts? FX SEFs are sized for a retail or individual customer, with contract values of 50,000 of the denominator currency. SEFs are also quoted in line with spot markets and have long-dated expiries, making long-term investments more cost-effective. 12. How will FX SEF be quoted when compared to traditional futures and/or spot FX? FX SEF contracts are quoted in line with the spot market, allowing USFE's markets to replicate spot trading on-exchange. 13. What is the expiration cycle for FX SEF contracts? FX SEFs have five-year expiries, eliminating the need and cost to roll positions each quarter, as is done with traditional FX futures. As a result, FX SEFs are much more cost-effective as long-term investment vehicle.