Nasdaq, the leading global provider of trading, clearing, exchange technology, listing, information and public company services, has announced the launch of a new equity derivatives product that enables investors to create a cash settled forward contract on a customized equity basket selected from a broad stock universe1.
The product, called Custom Basket Forwards (CBF), combines the flexibility and bespoke elements of uncleared derivatives with the benefit of central counterparty (CCP) clearing and trading on a regulated market. This means that investors can gain access to tailored equity exposures globally with a standardized contract, while enjoying capital and cost efficiencies1.
CBF is also a customized tool for environmental, social and governance (ESG) and climate investments, as it allows investors to create ESG and climate investment themes or track a benchmark and apply their own screening criteria1.
CBF supports both exchange and off-exchange (OTC) transactions. Exchange transactions are done in forward contracts on public baskets, where the composition of the basket is publicly available. Off-exchange transactions can be done in forward contracts on either public or private baskets, where the composition of the basket is not publicly available but instead available only to the requesting parties2.
The trading venue is Nasdaq Stockholm AB and the CCP is Nasdaq Clearing AB (Nasdaq Derivatives Markets) for both exchange and off-exchange transactions. The market is a block market only (i.e. no order book trading), and transactions are registered in the same way as existing equity derivatives transactions2.
The CBF service was launched on June 19, 2023, following the regulatory approval from Nasdaq Clearing AB on June 14, 20233. The service is expected to attract interest from institutional investors, hedge funds, asset managers and other market participants who are looking for simple and efficient ways to gain exposure to global equities.
For more information about CBF, please visit Nasdaq Custom Basket Forwards or contact Nasdaq Market Operations at +46 8 405 7050 or email@example.com.