Key Takeaways
- • The Managed Funds Association (MFA) urged the SEC to finalize a proposal adding the European Union to its list of exempted bond issuers, which would move EU bond futures under sole CFTC oversight, according to Bloomberg and MFA's comment letter.
- • Eurex, which launched EU bond futures in 2025, and the Futures Industry Association back the proposal, arguing existing dual-oversight rules have deterred US participants and constrained liquidity.
- • EU bond futures on Eurex averaged just over 40 contracts per day over the past 20 sessions, versus more than 2 million contracts on some days for German 10-year Bund futures.
- • The exemption would be the first addition to the SEC's exempted issuers list since 1999, opening room for cash-futures basis and relative-value strategies.
Summary
Hedge funds are backing a US Securities and Exchange Commission proposal to ease restrictions on trading European Union bond futures, according to a report by Bloomberg. The Managed Funds Association (MFA), which represents the alternative asset management industry, has urged the SEC to add the EU to its list of exempted bond issuers. The change would allow US investors to trade EU debt futures under Commodity Futures Trading Commission (CFTC) oversight, removing regulatory barriers that currently restrict access to the contracts. In a comment letter, the MFA called on the SEC to finalize the proposal, stating that the change would make it easier for American investors to hedge risk. Futures on EU debt currently face dual oversight.
The proposal has also received support from Deutsche Börse's Eurex and the Futures Industry Association. Eurex, which launched EU bond futures in 2025, said existing rules have effectively prevented many US market participants from trading the products, contributing to limited liquidity. Trading activity remains subdued, with Eurex's EU bond futures averaging just over 40 contracts per day across the past 20 sessions. By comparison, German 10-year government bond futures have traded more than 2 million contracts on some days.
Greater US participation could support liquidity and create new opportunities for hedge funds employing cash-futures basis trades and relative-value strategies. Eurex has highlighted the potential for arbitrage between EU and individual sovereign bond markets, while the contracts could also provide more precise hedging tools for investors holding EU debt.
The proposed exemption would mark the first addition to the SEC's list of exempted issuers since 1999. It supports broader efforts to develop the EU's joint debt market into a more liquid alternative to major European sovereign bond markets.
The proposal has also received support from Deutsche Börse's Eurex and the Futures Industry Association. Eurex, which launched EU bond futures in 2025, said existing rules have effectively prevented many US market participants from trading the products, contributing to limited liquidity. Trading activity remains subdued, with Eurex's EU bond futures averaging just over 40 contracts per day across the past 20 sessions. By comparison, German 10-year government bond futures have traded more than 2 million contracts on some days.
Greater US participation could support liquidity and create new opportunities for hedge funds employing cash-futures basis trades and relative-value strategies. Eurex has highlighted the potential for arbitrage between EU and individual sovereign bond markets, while the contracts could also provide more precise hedging tools for investors holding EU debt.
The proposed exemption would mark the first addition to the SEC's list of exempted issuers since 1999. It supports broader efforts to develop the EU's joint debt market into a more liquid alternative to major European sovereign bond markets.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.