Custom Basket Forwards
Global Equity Exposure Made Simple
Providing investors with tailored exposure to global equities as well as security of multilateral trading and central counterparty clearing on Nasdaq Nordic.
On June 14, 2023, Nasdaq Clearing AB received the necessary regulatory approvals for Custom Basket Forwards (CBF). Following the regulatory approval, the trading and clearing systems is ready to support CBFs as of June 19, 2023.
CBF is 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 universe.
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Define your equity basket by currency and return type such as gross, net and price.
Select your composition by defining the individual stocks and weights from a broad global stock universe.
A cash-settled forward contract is issued in Nasdaq's trading and clearing systems.
You're now able to transact the custom basket in a single instrument in one transaction.
Custom Basket Forwards allow investors to create a cash-settled forward contract on a customized equity basket, combining tailored and bespoke elements with the benefits of CCP clearing and trading on a regulated market.
Custom Basket Forwards are for investors seeking tailored and cost-efficient equity exposures without bilateral risk, dependency in liquidity provision and entering/maintaining ISDA agreements. Nasdaq has developed Custom Basket Forwards to address an increasing demand for a simpler and more efficient way to handle equity exposures with standardized contracts on a regulated market.
For buy-side:
For firms who are finding equity swaps increasingly difficult due to the pressure of regulations and changes in the industry, CBFs offer a simple and cost-effective alternative that gives them tailored equity exposure to a broad universe of stocks in a single contract with the benefit of CCP clearing and trading on a regulated market.
For sell-side:
For banks who are looking for new ways to reach buy-side clients locked in ISDA agreements with other banks, clients who don’t want to trade swaps/bilateral or clients who want more cost-efficient ways to create tailored equity exposure, CBFs offer a simpler and more efficient way to handle equity exposures with standardized contracts on a regulated market.
Exchange and Clearing members of Nasdaq Stockholm AB can submit basket requests following the signing of a license agreement and subject to the Exchange Rules and Clearing Rules of Nasdaq Derivatives Markets.
The following elements can be customized:
The referenced derivatives are traded and cleared in the same currency as the defined base currency of the basket.
The Nasdaq Custom Basket Calculation Service is a fully managed solution that empowers members of Nasdaq Stockholm AB and/or Nasdaq Clearing AB to design and set up equity baskets with customized features such as currency, return type, composition, and weights from a pre-approved universe of stocks.
The calculation service responds to the increasing demand for a simpler and more efficient way of managing proprietary indexes, thematic baskets, and ESG investments.
The result of close collaboration between Nasdaq and S&P Global Market Intelligence, Nasdaq Custom Basket Calculation Service provides investors with a scalable solution managing corporate actions over time.
Nasdaq Custom Baskets are administered by Nasdaq Copenhagen A/S, a registered benchmark administrator under the Benchmarks Regulation.
Julian Butterworth, Head of European Sales: julian.butterworth@nasdaq.com
Håkan Walden, Product Manager, Equity Derivatives: hakan.walden@nasdaq.com
Exchange Brokers Desk: eb.mps@nasdaq.com