Chicago Mercantile Exchange (CME), the world's largest and most diverse financial exchange and largest marketplace for U.S. equity index derivatives trading, and Standard & Poor's Corporation, a Division of the McGraw Hill Companies, today announced that they have expanded their successful 25-year partnership to include the listing of new E-mini Small Cap Stock Index Futures Contracts based on the successful family of S&P U.S. equity indices, addressing the needs of institutional asset managers for hedging and managing portfolios of small cap companies. The new derivatives products will be offered exclusively on the CME Globex platform and will be supported by dedicated CME market makers. In response to customer demands and to ensure an orderly transfer of liquidity, CME intends to list its Russell contracts through the September 2008 expiration date. Following the expiration of CME's agreement with Russell, CME and S&P will provide trading incentives and execution facilities that will encourage market participants to transfer their open interest in CME Russell 2000 stock index futures contracts into the new CME/S&P E-mini Small Cap Stock Index Futures Contracts. CME and S&P also announced today that they plan to develop other new equity and fixed income products designed to address the full spectrum of institutional asset management trading needs.
"CME and S&P have enjoyed the most successful and long-term stock index licensing relationship in the business and have the strongest brand recognition, product quality and liquidity in today's marketplace for equity derivatives, said Terry Duffy, CME Executive Chairman. "Though Russell has decided to move to another exchange, we look forward to enhancing our relationship with S&P and toward the successful continuation of our small cap business."
"We value our 25-year relationship with CME," said Robert Shakotko, Managing Director, Index Services, Standard & Poor's. "Our E-mini S&P 500 futures contract traded at CME has grown 338 percent in the last five years, from roughly $9 billion in average daily dollar volume in 2002 to over $90 billion in 2007. As the market leader in equity indices for the U.S. equity market with the S&P 500(R), S&P Mid-Cap 400(R) and S&P Small-Cap 600(R) family of products, we look forward to further strengthening our partnership with CME as we jointly develop new derivatives products that will further meet the trading and risk management needs of market users worldwide."
"CME has been the market leader and innovator in stock index futures markets for more than 25 years. We have developed the most sophisticated technology, the broadest global distribution and institutional customer base and the most efficient clearing environment for equity derivatives transactions," said Craig Donohue, CME Chief Executive Officer. "These advantages will benefit us tremendously as we vigorously compete in this segment of the equity derivatives markets."
