Chicago Board of Trade
agreed to become makers in the exchange's five- and 10-year interest rate swap futures contracts.
The two firms will join the existing electronic market maker, which the CBOT declined to name, to provide liquidity for trades on the exchange.
"Citigroup and Goldman Sachs & Co. are two of the most respected participants in the financial markets," the CBOT said in a statement. "Their participation as electronic market makers in CBOT swap futures ensures that both firms will take a leading role in the convergence of cash securities, over-the-counter derivatives and now the listed futures markets."
The news comes as the
New York Stock Exchange
works to complete a merger with European exchange operator Euronext. Euronext runs a derivatives exchange in London that could compete with the CBOT and the
Chicago Mercantile Exchange
if the NYSE integrated the product in the U.S. Still, futures specialists aren't concerned.
"The exchanges are able to piggyback the existing liquidity that they have, as opposed to the NYSE starting from scratch in the U.S." said John Lothian, futures broker at Price Futures Group in Chicago.
The CBOT has had other professional market making groups at the firm, including Wolverine. But it is a "newer phenomenon" to have established broker-dealers, such as Goldman and Citigroup, making markets on the exchange, as opposed to off the exchange, Lothian said.
"We believe the timing is right for the success of the CBOT swap futures complex," Citigroup said in a release. Said Goldman: "CBOT Swap futures will provide us with an opportunity to better serve the marketplace and the ever-evolving requirements of our customers."