CME Chief Says a Merger Between NYSE and Deutsche Börse Wouldn’t Change the Competitive Landscape ‘At All’

Chicago Mercantile Exchange (CME) Group Executive Chairman Terry Duffy spoke with FOX Business Network’s (FBN) Connell McShane about the success and profitability of the exchange and the changing regulatory and competitive landscape in which they operate. Duffy said he does not believe a merger between the New York Stock Exchange and Deutsche Börse would “change us in a competitive way.” He went on to say amid potential increased regulation as a result of Dodd-Frank, his primary concern is preventing regulators from “trying to impose additional rules on companies like CME that had nothing to do with the meltdown of 2008.” Excerpts from the interview can be found below, courtesy of Fox Business Network.

On how the potential NYSE/DB merger will change their business:
“I don’t think it changes it at all. We are competing with both Deutsche Börse and NYSE’s life division today so to think it’s going to change us in a competitive way I don’t see it. They are going to create some synergies if the transaction goes through and give those values back to their shareholders but as far as competition goes, I don’t see it as changing the landscape.”

On the push for oversight and regulations of derivative trading:
“The futures business didn’t cause the collapse of 2008-2009. It was overleveraged banks, housing markets, things of that nature. Hopefully the Dodd-Frank act when its implemented will alleviate some of those problems. What I am concerned about is the regulators trying to impose additional rules on companies like CME that had nothing to do with the meltdown of 2008.”

On CME Group CEO Craig Donahue’s pay package coming under question by shareholder advocacy group ISS:
“The stock hasn’t performed, no one is happy about that. We are continually doing very well as a company but for whatever reason the stock hasn’t performed so they have to withhold vote on his compensation. I don’t think it’s appropriate but at the same time we will deal with the shareholders at the meeting and explain our viewpoint on why it’s appropriate to keep someone like Craig at the compensation we have today.”

On whether he has considered rolling back margin requirements raised in the past due to commodity market swings:
“On the margins it is not about price it’s about risk management to make sure we have the proper funds. That’s really the only reason margins go up and down. We will have to wait and see how the volatile markets go. Margins are not a tool that affect the price of the product.”

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