Hedge funds back SEC proposal to ease access to EU bond futures

Hedge funds are supporting a proposal by the US Securities and Exchange Commission (SEC) to ease restrictions on trading European Union bond futures, according to a report by Bloomberg. This proposed change, backed by the Managed Funds Association (MFA) and supported by Eurex and the Futures Industry Association, could significantly impact fixed income arbitrage and risk management strategies for US investors.

By adding the EU to the list of exempted bond issuers, the SEC would allow US investors to trade EU debt futures under Commodity Futures Trading Commission oversight, removing current regulatory barriers that have limited access to these contracts. Eurex, which launched EU bond futures in 2025, has noted that the current rules have effectively prevented many US market participants from trading these products, resulting in limited liquidity.

With only around 40 contracts traded daily on average in the past 20 sessions, there is potential for increased participation to support liquidity and create new opportunities for hedge funds employing various strategies, such as cash-futures basis trades and relative-value strategies. The proposed exemption would be the first addition to the SEC's list of exempted issuers since 1999, further supporting the development of the EU's joint debt market as a more liquid alternative to major European sovereign bond markets.

Brief written by urgent.news from Hedgeweek's own syndicated text. Machine-written — may contain errors; check the original before relying on it.