CME Strives to Expand European Business Before New Exchange

CME Strives to Expand European Business Before New Exchange

The world’s largest futures exchange, CME Group Inc., is pushing to expand its European business as it begins a new London-based market, while IntercontinentalExchange Inc. advances their planned purchase of NYSE Euronext.

CME, a Chicago based exchange, intends to open a new London exchange this year. Bloomberg reports that CME has been in talks with 12 cities, including Milan, Lisbon, Madrid, Zurich, and Stockholm. The group’s meetings, which will be held for the next two months, are for fund managers and traders and aimed at new and existing customers. CME’s William Knottenbelt told Bloomberg, “There is sometimes a lack of awareness of how big CME is in the region…A lot of regional banks are actually looking at what they can do in the region.”

CME’s new London exchange is set to compete with Deutsche Boerse AG’s Eurex and Liffe — the largest derivatives venues in Europe. NYSE Euronext’s Liffe offers gilts, short sterling and Euibor futures, whereas Frankfurt-based Eurex has contacts on German and French bonds.

Many exchanges and brokers, including CME, are looking to win business and customers by capitalizing on regulations that will push over-the-counter products onto electronic systems. Many of the worlds largest exchanges have their own clearing houses that operate central counterparties which stand in the middle of trades to guarantee they are completed.

Speaking to the new venture, Knottenbelt said, “London is a huge market…And there’s huge liquidity at the end of the Asian and European day that isn’t reflected in the U.S., so there’s an opportunity.

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About The Author


Felix Shipkevich

Felix Shipkevich

Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

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