Economics legend takes Fred Arditti award
Professor Eugene Fama, known as the father of efficient market theory, was awarded the CME Fred Arditti Innovation Award at the CME Center for Innovation (CFI) dinner in April.
Fama is the Robert R. McCormick Distinguished Service Professor of Finance at the University of Chicago Graduate School of Business. Fama is widely recognized for his innovative approach to evaluating investments and market behavior.
“While it is always gratifying to receive an award, it is especially rewarding to receive one that celebrates innovation,” Fama said during his acceptance speech. “Innovation has created new risk management tools, such as those offered at CME, which have transformed global financial markets. The ability to manage risks associated with future price fluctuation enables markets to operate more efficiently and efficient markets are a corner-stone of capitalism.”
In announcing the recipient, Nobel Prize-winning economist Myron Scholes said, “Eugene Fama has had path-breaking insights into the functioning of markets, asset-pricing theory and corporate finance that have benefited market participants worldwide. His innovative research has resulted in his participation in the development of many new finance products and in the development of new futures contracts for hedging risks.” Scholes is chairman of CME's Competitive Markets Advisory Council.
Fama's empirical and theoretical work on market efficiency changed and defined the way financial practitioners perceive markets. Recently, Fama worked with Kenneth French at the Tuck School of Business at Dartmouth College to develop the three-factor model for describing market behavior, which considers that market, size and value best explain performance and pricing. Practitioners and academics have adopted the model as the benchmark for asset allocation decisions.
The award is named after former CME chief economist Fred Arditti, who was instrumental in developing CME's S&P 500 and Eurodollar futures contracts – among the highest volume futures contracts in the world. Past recipients of the award are Leo Melamed, CME chairman emeritus, and Nobel Prize-winner William F. Sharpe.
www.cme.com/ardittiaward
CME = Exchange of the Year
Risk magazine named CME “Derivatives Exchange of the Year” for 2006 in its annual awards announcement. The awards recognize best practices and innovation in the risk management and derivatives markets in 24 categories across banks, brokerage houses, investors and market providers. Winners were named and profiled in the January edition of Risk magazine.
In 2006, CME recorded its seventh consecutive year of double-digit volume growth, became the sole provider of electronic trading of NYMEX and COMEX energy and metals products, launched new products ranging from contracts on weather and U.S. domestic real estate to currency derivatives for the Chinese renminbi and the Korean won, and announced a definitive merger agreement with the Chicago Board of Trade.
CME also expanded into the OTC derivatives space through FXMarketSpace – a joint venture launched in March with Reuters that offers centrally cleared electronic trading for cash FX (see story on FXMarketSpace on page 10). CME also acquired Londonbased swaps trading platform, Swapstream, and launched Clearing360, a clearing service for OTC products.
“We are pleased to be named as Risk's Derivatives Exchange of the Year,” said Terry Duffy, CME executive chairman. “The recognition of the derivatives community is particularly meaningful to us as our industry becomes more competitive globally and we strive to grow our business.”
“We continue to look for opportunities to develop the products and services our customers need in rapidly-evolving markets, and this award from Risk reflects our hard work in driving industry change,” said CME CEO Craig Donohue. “We look forward to delivering more innovative technologies and instruments in 2007 to our customers around the world.”
Risk magazine, read by more than 80,000 financial professionals monthly, is a leading publication for the global derivatives and risk management communities.
Good as Gold: CME Magazine and CME Annual Re port Win Gold Awards
CME Magazine and the CME 2006 Annual Report received Gold Tower Awards at the Business Marketing Association's 24th annual Tower Awards, a prestigious business-to-business marketing and communications competition, on May 9, 2007. The Business Marketing Association (BMA) is a premier national service organization for marketing professionals that focuses on improving business-to-business marketing communications and related marketing techniques.
CME Magazine was awarded the Gold Tower Award in the External Newsletter category for its Winter 2007 issue. This issue featured a cover story on Chris Gardner, the successful broker whose life story was the subject of The Pursuit of Happyness, a best-selling memoir and major motion picture. It also featured stories on customers and partners including DRW Trading, PIMCO and Nasdaq, as well as information about new CME products and technology.
The CME 2006 Annual Report, titled “Advance,” received the Gold Tower Award in the Annual Report category. Detailing the company's continued advancements through organic growth and new strategic alliances that help meet evolving customer needs, this is the third report in CME's annual report series that showcased customers and partners from around the world who use CME's benchmark products to manage risk successfully.
Up, Up and Away: European Inflation summit
Leading market participants across Europe discussed the evolution of the global inflation market at CME's second annual European Inflation Summit on May 15, 2007, held in London.
Following the successful inaugural event in 2006, this summit featured Dariush Mirfendereski, managing director, UBS head of inflation-linked trading, who opened the event by showcasing CME Eurozone HICP (Harmonized Index of Consumer Prices) futures and explaining how they fit within an inflation trading strategy.
“Interest in inflation-linked derivatives continues to grow and we are seeing steadily increasing volumes in the CME Eurozone HICP futures contract,” says Robin Ross, managing director, CME interest rate products.
The CME Eurozone HICP futures contract, launched in September 2005, is a cash-settled product that tracks annual changes in the HICP, excluding tobacco, for the Eurozone, as calculated by the European Statistical Institute (Eurostat). The index measures the level of prices for market goods and services consumed by households in the Eurozone, 12 European Union member states that use euro currency, and covers about 99 percent of all Eurozone household consumption.
“The advantages of trading exchange-listed and centrally cleared inflation futures are becoming more appealing to a wider variety of dealers and investors as new strategies and applications are developed,” says Ross. “We see this as a continuing area of growth in the years to come.”
