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- The nature and quality of regulatory capabilities proposed to be applied by U.S. Futures Exchange as a U.S. designated contract market;
- The nature and quality of clearing and settlement facilities proposed to be utilized by U.S. Futures Exchange as a U.S. designated clearing organization;
- Cross-border legal and bankruptcy issues attendant to U.S. Futures Exchange’s proposed transatlantic clearing linkage for Eurex and Eurex U.S. products;
- The ability of the Commission and other U.S. authorities to affect the true controlling persons of U.S. Futures Exchange to the extent that they may be resident outside the United States; and
- An apparent $40 million rebate scheme being actively marketed by U.S. Futures Exchange and presenting novel and fundamentally important regulatory policy concerns about potential customer detriment associated with such practices.
CME also commends Congressman Jerry Moran, Chairman of the Subcommittee on General Farm Commodities and Risk Management, and other members of the Subcommittee, for agreeing to reschedule the Thursday, October 16, 2003 hearing. We appreciate that the Subcommittee recognizes the importance of these issues to the American investing public and that the Committee has announced that “the hearing will be rescheduled during the 180-day review period to allow for full oversight and thorough vetting of any issues related to the approval process in general or the Eurex U.S. application specifically.”
We value highly the transparency requirements of our regulatory process and the ability for market participants to fully understand how existing and new exchanges and clearing organizations in the U.S. will function and operate. CME also welcomes Eurex U.S. We expect that upon full examination and careful adjustments to its regulatory and compliance capabilities, and apparent business practices, it will prove a valuable addition to the lineup of the world’s greatest futures exchanges in Chicago.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.5 billion per day in settlement payments in the first half of 2003 and managed $29.1 billion in collateral deposits at June 30, 2003. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.
