CME chief executive Phupinder Gill has highlighted the
exchange’s focus on expanding its global presence,
as the group prepares for the launch of its European platform
this week writes Jonathan Watkins.
CME Europe is set to go live on September 29 with
a suite of FX products as the derivatives
giant looks to take its business into Europe’s
Speaking at the FIA Burgenstock expo Gill discussed
CME’s ties with Asian exchanges and venues in the
emerging markets, but added that a London presence was what the
clients had demanded.
"We have been focused on expanding the business by
consolidating in the US and outside the US - with the exception
of London," said Gill.
"We have worked with exchanges in different parts of the
world – Malaysia, Korea, Brazil and Mexico.
"But what would the client want to see around the world?
London is interesting in that there is a demand for the
contracts we currently offer.
Competition in the FX market
CME Europe represents the most significant new launch in the
London futures market in years and according to Gill they will
look to expand their offering to other asset classes in the
Also speaking at the FIA event, CME Europe CEO Bob Ray, said
the venue would look at what the market needs and what its
"We will be definitely looking to Euro-denominated and other
currencies," added Ray.
The now London venue will have competition in the FX market
from Europe’s largest derivatives player
Eurex FX contracts are set to go live on October 7 in
response to CME’s launch which has been long
awaited in London.
Emerging markets focus
"We are very excited about this, particularly about client
feedback so once it does launch, the proof will be in the
"It’s going to take time but we’re
confident we will see some success."
CME also has its links with numerous other markets around
the world such as Malaysia and Brazil, while Gill added that
the exchange – along with the rest of the market
– is also keeping their eye on developments in India
In Brazil CME has an agreement to run orders between itself
and BM&F Bovespa, South America’s largest
A week ago, FOWi reported that CME was looking to increase
its staff in the Asia-Pacific region, with the area standing
out as holding the key for futures growth in the derivatives
"China is not the only place for growth, you have India,
Singapore, Hong Kong," added Gill.
"Look at Brazil there are some interesting things going on
"We are confident on a long term basis that Brazil will be a
very interesting from a trading perspective."
"Russia - talking about the black sea wheat contract. Our
involvement there has been providing hedging tools to Russian
"In India our involvement has been limited. We have an
arrangement with NSE and I believe all these relationships will
expand over time."
"India is a fascinating place but the regulatory environment
needs to be developed for us to get involved so now we just
have cross-licensing agreements."
On top of CME’s global quest, the exchange
group has also applied with the Commodity Futures Trading
Commission (CFTC) to become registered as a Sef.
The move followed its Atlanta-based rivals, ICE, into the
new market for the clearing and trading of swaps.
"Are they going to be widely used? Will there be
consolidation over time? These things are not sorted out