News Release

CME Swaps on Swapstream to be the First Centrally Cleared Interest Rate Swaps Available to All OTC Market Participants

Tue Jul 17 2007

CHICAGO and LONDON, July 17 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse exchange, today announced plans to offer the market a cleared interest rate swap product through its subsidiary, Swapstream, a market-leading multilateral electronic trading platform for interest rate swaps. The exchange plans to launch the product early in the first quarter of 2008. CME Swaps on Swapstream will be the first interest rate swap to offer the OTC marketplace the full benefits of central counterparty clearing. The product will trade exclusively on Swapstream's sPro™ platform and will be centrally cleared through CME using its OTC clearing solution, CME Clearing360™.

CME Swaps on Swapstream combines unparalleled direct, anonymous access to high-volume customer groups through Swapstream's platforms, with the regulatory protection and risk management previously only available with exchange-traded products. The product will include forward-dated interest rate swaps denominated in U.S. dollars and Euros with maturities out to 30 years, as well as short-term overnight index (OIS) swaps ending on monthly International Monetary Market (IMM) start dates. Their fixed coupons will be reset at the end of every day and positions will be marked to market daily.

"CME Swaps on Swapstream brings the benefits of central counterparty clearing, such as position netting and risk offsets, to the $207 trillion interest rate swaps market," said Robin Ross, Managing Director, CME Group Interest Rate Products. "Combining the strengths of CME Clearing360 services and Swapstream's cutting edge trading technology is part of CME Group's broader strategy of providing greater operational and cost efficiencies to trading vanilla over-the-counter products."

"Together CME Group and Swapstream are providing a revolutionary OTC solution that meets the needs of swaps traders and other market participants, such as hedge funds," said Stephane Rio, CEO, Swapstream. "For the first time users of plain vanilla and forward swaps will have the opportunity to trade standardized, centrally-cleared interest rate swaps on a multilateral, neutral electronic platform."

The new product will offer the balance sheet and operational efficiencies of central counterparty clearing and straight through processing to the interest rate swap market. In particular, benefits of CME Swaps on Swapstream include:

-- Automatic netting of offsettable positions
  -- Operational simplicity through provision of the daily Swap Value Factor
     and use of standard FIXML
  -- The use of SPAN (Standards Portfolio Analysis of Risk), a methodology
     developed by CME in 1988 for calculating performance bond requirements,
     provides simple and appropriate provisioning of risk offset
  -- Favorable capital treatment through marking the swaps to market daily
     and banking these amounts

For more information on CME Swaps on Swapstream please visit or to learn more about connecting to Swapstream.

CME Group ( is the world's largest and most diverse exchange. Formed by the 2007 merger of the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on its trading floors. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and alternative investment products such as weather and real estate. CME Group (NYSE: CME)(NASDAQ: CME) is traded on the New York Stock Exchange and NASDAQ under the symbol "CME."

The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex and E-mini, are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. Standard & Poor's, S&P 500 and S&P, S&P MidCap 400, Standard & Poor's Depositary Receipts and SPDR are trademarks of The McGraw-Hill Companies, Inc. NASDAQ, NASDAQ-100 and the NASDAQ-100 Index are trademarks of The Nasdaq Stock Market, Inc. Nikkei and Nikkei 225 are trademarks of Nihon Keizai Shimbun Inc. The Russell 2000 Index and Russell 1000 Index are registered trademarks of Frank Russell Co. TRAKRS and Total Return Asset Contracts are trademarks of Merrill Lynch & Co., Inc. GSCI is a trademark of Goldman Sachs & Co. Morgan Stanley Capital International, MSCI, and EAFE are trademarks of MSCI. FTSE/Xinhua China 25 is a trademark of FTSE Xinhua Index Limited. Dow Jones and Dow Jones Industrial Average are trademarks of Dow Jones & Company, Inc. CDR Liquid 50 NAIG is a trademark of Credit Derivatives Research LLC. These trademarks are used herein under license. All other trademarks are the property of their respective owners. Further information about CME Group and its products can be found at



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