CME Makes a Move Into Europe

US futures market CME Group is in the process of applying to the UK's Financial Services Authority (FSA) to create a London-based derivatives exchange to launch in mid-2013. Pending regulatory approval, CME Europe will initially begin trading foreign exchange futures products.

"We continue to see an increase in business coming from our diverse set of customers in Europe, with more than 20 percent of our volume now originating from the region," says CME Group executive chairman and president Terry Duffy. "Having an exchange in London that can leverage the central counterparty model of CME Clearing Europe will allow us to align ourselves even more closely with our regional customers in both listed futures and over-the-counter (OTC) markets, and provide additional opportunities to our expanding non-US customer base."

Robert Ray, currently managing director of products and services, will become CEO of CME Europe. CME Globex will be used as the electronic trading platform and CME Clearing Europe, which launched in May 2011, will provide central counterparty clearing services.

The move across the Atlantic encroaches on the territory of NYSE Euronext and Deutsche Borse, whose attempted merger was shot down by regulators for competition reasons earlier this year. NYSE Euronext's Liffe and Deutsche Borse's Eurex dominate the market in some European contracts.