News Release

CME Group Statement

Wed Feb 06 2008

CHICAGO, Feb. 6 /PRNewswire-FirstCall/ -- CME Group welcomes the opportunity to participate in industry discussions concerning market structure and the organization of clearing and settlement services. CME Group believes that market driven solutions and a range of choice in execution and clearing services best serves the interests of market participants. In execution services, the global futures and options industry offers a wide range of choice, from open auctions, central limit order books and call markets on fully regulated exchanges, exempt platforms and other markets with varying levels of regulatory oversight, depending on the types of products, customers and trading interests involved. Similarly, the global derivatives industry offers trading and clearing services through both exchange owned, vertically integrated and independently operated clearing organizations, as well as bilateral trading with no central counterparty clearing services, or central counterparty clearing services for OTC derivatives transactions that are unbundled from execution services.

CME Group believes that Congress, in enacting the Commodity Futures Modernization Act of 2000, appreciated the merits of a free market solution to the organization and ownership of clearing houses. It rejected suggestions that clearing houses be taken from exchanges and converted into user owned utilities. Congress adopted an extremely flexible approach to regulation that promoted innovation and competition by avoiding a one-size-fits-all model. More importantly, CME Group believes that the Commodity Futures Trading Commission, the House and Senate Agriculture Committees and Congress itself, understands the following critical distinctions between securities and options markets versus derivatives and futures markets:

  -- Vertical Clearing is the Industry Standard.  Unlike domestic stock and
     options exchanges, domestic futures exchanges compete directly with
     non-U.S. futures exchanges, where 70% of all futures and options
     contracts traded globally are cleared on or through exchange owned or
     controlled clearing facilities.  Any failure to recognize that fact
     would create an un-level playing field for U.S. futures exchanges at a
     time when U.S. futures exchanges are the strongest example of how to
     maintain our overall competitiveness in global financial markets -- a
     key area of concern in recent times.

  -- Horizontal Clearing Providers do not Permit Fungibility.  Even
     independent clearing providers have commercial agreements with their
     exchange and platform customers that do not permit fungibility across
     competing contracts without the consent of the exchange/platform
     customer.  The absence of cross-exchange fungibility has not impaired
     innovation or competition in the derivative industry.  New product and
     system innovation is unparalleled and customer fees and costs are close
     to insignificant in relation to the value of the services

  -- Current Market Trends Favor Increased Vertical Clearing.  The current
     trend in the marketplace is toward integration of clearing facilities
     into futures and options markets (e.g., ICE's acquisition of NYBOT,
     NYCC Clearing and its announced separation from LCH.Clearnet and the
     creation of ICE Clear in Europe).  This trend is not an accident.
     Markets operate more efficiently when they control their own clearing

  -- Derivatives and Futures Products are Inherently Different than
     Securities and Equities Options Products.  Unlike securities and equity
     options instruments, futures products are not identical.  Unlike equity
     exchanges that simply trade an instrument issued by a corporation,
     futures exchanges invest considerable time and capital in creating new
     products and designing trading methods and specifications that appeal
     to customers.

  -- Government Does Not Control Privately Owned Clearing Facilities.
     Vertically-owned clearing houses already exist and cannot simply be
     "taken" by government action.  The futures industry has long permitted
     the development and growth of exchange owned clearing houses.  Any
     decision that would result in the taking of that property would require
     extensive legislative review and discussion to ascertain the impact
     such a decision would have on the ultimate users of futures products.

  -- Publicly Owned Clearing Houses Better Serve the Public Interest.  There
     is no public purpose served by attempting to transfer ownership of
     exchange-owned clearing facilities to intermediaries who will simply
     operate such facilities for their own benefit and not the benefit of
     market users.

  -- Exchange Owned Clearing Houses Enhance Transparency and Reduce Systemic
     Credit Risk.  Intermediaries may limit central counterparty clearing
     services to selected products and markets, limiting greater
     transparency and exacerbating credit risks in swap and credit markets
     in order to maintain proprietary trading profits or prime brokerage
     revenue streams at the expense of market integrity and the safety and
     soundness of our financial markets.

  -- Futures Exchanges Generally Offer Lower Total Transaction Costs than
     Securities and Equity Options Markets in Comparable Products.  Claims
     that independent clearing arrangements in futures markets will increase
     market efficiency are false.  Evidence amply demonstrates that total
     liquidity costs in futures and options markets are considerably lower
     than in securities and equity options markets.  Moreover, decreased
     spreads in equity options markets following multiple listing
     initiatives reflect the increased competition associated with breaking
     down designated primary market maker or specialist order allocations or
     trading preferences that increased transaction costs for customers in
     those markets.  Unlike securities and equity options markets, futures
     exchanges do not employ such systems.

CME Group will hold a conference call to discuss this topic at 12:30 PM CST today. Dial in numbers are as follows: Domestic -- 1-888-233-8078; International -- 1-913-312-1399. A live audio Webcast of the call will be available on the Investor Relations section of CME Group's Web site at An archived recording will be available for up to two months after the call.

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, and alternative investment products such as weather and real estate. CME Group 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



CONTACT: Media, Anita Liskey, +1-312-466-4613,, or
Investors, John Peschier, +1-312-930-8491, both of CME Group

Web site:

Corporate Communications

+1 312 930 3434