CME, CBOT to merge
The 2007 merger of the two largest futures exchanges in the
The merged exchange hopes to be the leading market for trade in all major asset classes and will give wider access to benchmark exchange-traded derivatives based on
The merger between CME and CBOT will create one of the world’s most liquid marketplaces, with average daily trading volume approaching 9 million contracts per day, representing approximately $4.2 trillion in notional value. It will be the world’s leading derivatives clearing facility based on volume.
Earlier this year CME announced a deal with Nymex making it the exclusive electronic trading services provider for Nymex’s energy futures and options contracts through 2016. The agreement encompassed side-by-side trading of Nymex standard-sized and Nymex “miNY” energy futures contracts for crude oil, natural gas, heating oil and gasoline with Nymex’s floor-based products during open outcry trading hours and when the Nymex trading floor is closed.
Once completed the merger will see Terrence Duffy, currently chairman of CME, become chairman of the combined organization. Current CBOT chairman Charles Carey will become vice-chairman of the combined organization while Craig Donohue, chief executive officer of CME, will become chief executive officer of the combined organization.
The merger is expected to shave off $125 million annually in costs by the end of the second full year after closing, which is due mid 2007 pending approval from regulators.
This merger follows on the heels of IntercontinentalExchange’s $1billion purchase of the New York Board of Trade which provides both entities with mutually beneficial access to each others’ trading and clearing technologies, a broadening of product choice and an overlap in customers.
More on Risk management
Energy firms revisit CTRM systems as tech advances
Energy executives mull how to tap into the explosion of new technologies entering the risk space, but systems selection must consider future business needs, writes Yefreed Ditta at Value Creed
CRO interview: Brett Humphreys
Brett Humphreys is head of risk management at environmental markets specialist Karbone. He talks to Energy Risk about the challenges of modelling outcomes in unpredictable times and how he’s approaching the risks at the top of his risk register
How geopolitical risk turned into a systemic stress test
Conflict over resources is reshaping markets in a way that goes beyond occasional risk premia
Energy Risk Debates: the influence of risk culture
The panellists examine different risk cultures and discuss the risk manager’s role and influence in creating a risk culture
Energy Risk reaction: Venezuela and oil sanctions
Energy Risk talks to Rob McLeod at Hartree Partners about the energy risk implications of the US’s control of Venezuelan oil
CRO interview: Shawnie McBride
NRG’s chief risk officer Shawnie McBride discusses the challenges of increasingly interconnected risks, fostering a risk culture and her most useful working habits
Increasingly interconnected risks require unified risk management
Operational risk is on the rise according to a Moody's survey, making unified risk management vital, say Sapna Amlani and Stephen Golliker
Energy Risk Europe Leaders’ Network: geopolitical risk
Energy Risk’s European Leaders’ Network had its first meeting in November to discuss the risks posed to energy firms by recent geopolitical developments
