As a result of this change approximately 284,000 shares will be released each month, less than the average volume of CME stock traded in a single day. Since the beginning of 2004, CME shares traded an average of approximately 410,000 shares per day and more than 635,000 shares per day since June 1, 2004.
“This change to the capital investment requirement is part of our global strategy to reduce transaction costs and increase capital efficiencies for CME clearing firms,” said CME Chairman Terry Duffy. “This plan releases approximately $480 million in additional equity capital, building on the benefits of our historic clearing processing agreement with the Chicago Board of Trade through which we were able to reduce performance bond and capital requirements for our clearing members by $1.6 billion and $200 million respectively.”
“By lowering the CME Class A share requirement, we hope to attract new firms and large market participants, increase the use of our products, and unlock equity value for our existing clearing member firms,” said CME Chief Executive Officer Craig Donohue. “Each current CME clearing member will benefit from the change which will free up approximately $6 million of their capital over time, an amount the CME Clearing House does not require for its financial safeguards package.”
The reduction in the required number of Class A shares clearing members must acquire is the only change CME is making to the capital investment requirements for its clearing members. All other capital investment requirements including the purchase of two CME memberships, two IMM memberships, two IOM memberships and one GEM membership, remain in effect for all clearing members of the exchange.
Chicago Mercantile Exchange Holdings Inc. became the first publicly traded U.S. financial exchange on Dec. 6, 2002. The company was added to the Russell 1000® Index on July 1, 2003. It is the parent company of Chicago Mercantile Exchange Inc. (www.cme.com), 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 $1.6 billion per day in settlement payments in the first half of 2004 and managed $39.1 billion in collateral deposits as of June 30, 2004.
Memorandum to Clearing Firms (PDF)
Assignment and Release Form (CME clearing firms) (PDF)
Assignment and Release Form (CME/Former IMM clearing firms) (PDF)
Statements in this news release that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q, which can be obtained its Web site at www.sec.gov. CME undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
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