CME Group

CME Group Inc.

Type	Public
Traded as	Nasdaq: CME (Class A) S&P 500 component
Industry	Financial Services
Founded	1898; 125 years ago (1898)
Headquarters	Chicago, Illinois, United States
Key people	Terrence A. Duffy (Chairman & CEO) Lynne Fitzpatrick (CFO)
Revenue	US$5.02 billion (2022)
Operating income	US$3.02 billion (2022)
Net income	US$2.69 billion (2022)
Total assets	US$174.2 billion (2022)
Total equity	US$26.88 billion (2022)
Number of employees	c. 3,460 (December 2022)
Subsidiaries	Chicago Mercantile Exchange Chicago Board of Trade New York Mercantile Exchange Commodities Exchange, Inc. NEX Group Kansas City Board of Trade
Website	cmegroup.com
Footnotes / references

President George W. Bush at the CME on March 6, 2001

CME Group Inc., headquartered in Chicago, operates financial derivatives exchanges including the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and The Commodity Exchange. The company also owns 27% of S&P Dow Jones Indices. It is the world's largest operator of financial derivatives exchanges. Its exchanges are platforms for trading in agricultural products, currencies, energy, interest rates, metals, futures contracts, options, stock indexes, and cryptocurrencies futures.

In addition to its headquarters in Chicago, the company also has offices in New York, Washington, and Houston in the U.S., as well as abroad in London, Singapore, Bangalore, Beijing, Belfast, Calgary, Hong Kong, Seoul, Singapore, and Tokyo.

History

CME Group's origins began with the Chicago Mercantile Exchange (CME), which was founded in 1898 as a nonprofit corporation. In 1919, it established its clearing house. In 2000, CME demutualized. In 2002, CME became a public company via an initial public offering.

On July 12, 2007, CME completed a merger with its historical rival the Chicago Board of Trade in an $8 billion deal that created the world's largest financial market. The overarching holding company then launched as CME Group.

In 2012, Phupinder Gill, then CME Group's president and COO, became the company's CEO.

In November 2016, Gill retired from his role and Terrence A. Duffy, then executive chairman and president of the company, took on an expanded role as its CEO.

In 2022, CME Group futures and options reached a record average daily volume of 23.3 million contracts.

Mergers and acquisitions

On August 22, 2008, CME Group acquired New York Mercantile Exchange (NYMEX), owner of both the NYMEX exchange and the Commodity Exchange (COMEX), for $8.9 billion in cash and CME Group stock.

On February 10, 2010, CME Group agreed to purchase 90% of Dow Jones & Co.'s financial-indexes business, including the Dow Jones Industrial Average. CME Group subsequently contributed Dow Jones Indexes to the formation of S&P Dow Jones Indices in exchange for a 24.4% ownership interest. In April 2013, CME Group purchased the remaining 10% interest in Dow Jones Indexes for $80.0 million. As a result, CME Group's interest in S&P Dow Jones Indices increased from 24.4% to 27.0%.

On December 3, 2012, CME Group acquired the Kansas City Board of Trade, the dominant venue for the sale of hard red winter wheat, for $126 million in cash.

On November 2, 2018, CME Group acquired the London-based NEX Group for $5.5 billion.

Operations

CME Group operates a global derivatives marketplace that allows institutions and individuals to trade futures and options based on interest rates, equity indexes, foreign exchange, energy, metals, and agricultural commodities. The company runs an electronic trading platform, CME Globex, which allows customers in approximately 150 countries to trade futures and options contracts.

The company also operates two cash market businesses: BrokerTec, which facilitates dealer-to-dealer trading for fixed-income markets, and EBS, which provides foreign exchange spot trading.

In addition, CME Group operates CME Clearing, which serves as a counterparty to every cleared transaction, including both listed and OTC derivatives, within the company’s marketplace.

Board governance

CME Group's history as a member-owned exchange and acquisition of rivals have led to an unconventionally large board size for a publicly-traded company. In 2018, six of its 20 sitting board directors were elected by holders of Class B shares, representing owners of exchange seats, as opposed to that of publicly-traded Class A shares. In comparison, the average company in the S&P 500 had no more than 11 board directors.

On August 23 2018, the company offered holders of Class B shares about $10 million to relinquish control of their six board seats. The move was subsequently rejected.

Notable events

2010 flash crash

CME Group was at the center of the 2010 flash crash, which took place on May 6, 2010. According to a Commodity Futures Trading Commission (CFTC) 2014 report, a significant cause of the event was the use of spoofing algorithms by Navinder Singh Sarao, a British financial trader; just prior to the flash crash, he placed orders for thousands of E-mini S&P 500 stock index futures contracts — which traded on CME Group's Globex platform — and later replaced or modified those orders at least 19,000 times before they were cancelled. The event led to the modern day implementation of coordinated cross-market circuit breakers, as the CME's Globex platform halted trading in an automated response to the activity, while the New York Stock Exchange did not.

Awards and honors

• CME Group earned a score of 100% on the Human Rights Campaign's Corporate Equality Index in 2019, 2020, 2021, and 2022.

• CME Group was named to the Forbes Blockchain 50 list in 2021 and 2022.

• In 2022, the company won WatersTechnology's IMD & IRD Awards for Best market data in the exchange category.

See also

• CME Group Tour Championship, the season-ending tournament of the LPGA Tour of women's golf, sponsored by CME Group