"We are providing customers worldwide with greater control over their connections to CME," said Arman Falsafi, Managing Director, Global Electronic Trading and Data. "Our new programs will reduce connectivity costs, enable customers to obtain connections to CME more quickly and allow them to customize their networks for their specific trading and business needs. In addition, customers for the first time will have a choice between telecommunications vendors and the option to use existing internal networks."
Currently, customers seeking access to CME systems through a direct connection must order a circuit from the exchange. CME and AT&T manage the circuit and other necessary equipment at the customer site. Clients choose the desired bandwidth based on their capacity needs, up to and including a T-1 line of 1.5 megabytes.
Client DIRECTLink
CME's innovative new Client DIRECTLink program allows participants to coordinate intercompany connectivity to CME through existing connections to major telecommunications vendors, giving them the option to order CME connections with greater capacity than a T-1 line. Participants will be able to leverage their existing vendor relationships and negotiate access pricing based on their desired service level. Access to CME through Client DIRECTLink can be established in as little as one to three weeks. Customers will manage their own equipment and network. CME will charge $200 a month per 0.5 megabyte bandwidth, while the telecommunications company will charge an access fee that varies by customer.
This option is available from AT&T, effective immediately. MCI will join the Client DIRECTLink program later this month, and Sprint will become an authorized vendor later this quarter. As a result, current or new participants will be able to use their existing network connections to link to CME via one of these three authorized vendors.
Client INTERNETLink
Under CME's new Client INTERNETLink program, customers now can use a high-bandwidth Internet connection to access GLOBEX, CLEARING 21 and/or CME market data from anywhere in the world. Access to CME systems through an Internet connection can be established in as little as one to three days. Customers will manage their own equipment and network. CME will charge $500 a month per 0.5 megabyte bandwidth, while the Internet service provider will charge an access fee that varies by customer. Client INTERNETLink can be particularly cost-effective for those who want to connect to GLOBEX from multiple remote locations, allowing them to leverage existing Internet connectivity and avoid the need to maintain additional telecommunications equipment and direct network connections to CME.
Enhancements to Existing AT&T Connectivity Offerings
In addition, CME has enhanced its existing managed connectivity offerings provided through AT&T. Existing customers may consolidate their multiple T-1 lines into a single, high-bandwidth connection to CME. This will improve the connection's stability, simplify network architecture and reduce technical support requirements, leading to lower costs. CME will charge $6,000 a month for a 3-megabyte connection, versus the current $7,000 for two T-1 lines. A single, high-bandwidth connection now can have up to 6 megabytes of capacity.
To enhance the reliability and redundancy of its GLOBEX connectivity, CME also plans to provide customers who currently use T-1 lines supplied by AT&T with a back-up T-1 connection to GLOBEX via a second vendor. Previously, only an ISDN dial-up connection was available as a back-up to the AT&T-GLOBEX connection. CME will begin contacting customers this month to plan the migration to the new back-up service. There will be no additional charge for the back-up T-1 connection.
CME also will continue to assist European customers in working with local carriers to install physical circuits at its London telecommunications hub facility. The hub houses the direct electronic connections between Europe and GLOBEX. Customers using the London hub may select a CME-approved local telecommunications provider. All necessary telecommunications hardware and network equipment are stored at the hub facility. Customers have complete flexibility in determining the bandwidth size for their connections, as well as the number and type of circuits.
About GLOBEX and CME
As the largest futures exchange in the United States for the trading of futures and options on futures, Chicago Mercantile Exchange Inc. (www.cme.com) brings together buyers and sellers on its trading floors and GLOBEX around-the-clock electronic trading platform. The GLOBEX concept, approved by CME members in 1987, was the first move by any futures market in the world to create a global electronic trading platform. GLOBEX launched in June 1992. Eurodollar futures and options were listed on GLOBEX in August 1992, and CME's benchmark S&P 500® futures and options on futures became available electronically in September 1993. However, GLOBEX volume began to grow exponentially as CME expanded its electronic trading hours and introduced products solely for GLOBEX trading. The exchange first offered electronic trading during open outcry trading hours in 1997, when it launched E-miniä S&P 500 futures. This contract, which trades only on GLOBEX and is one-fifth the size of the standard S&P 500 contract, quickly became the fastest-growing product in CME's history. The E-mini NASDAQ-100® futures contract, launched in 1999, became the second-fastest. Today, GLOBEX is available virtually around the clock, five days a week, to customers all over the world. In the first six months of 2003, GLOBEX volume totaled more than 133 million contracts and represented 81 percent of transactions on CME.
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.
