CME Group can make it alone, chairman says

By Reuters
Posted Feb. 25 at 1:40 p.m.

CME Group Inc. can stay competitive without joining the merger and acquisition frenzy that has caught up financial exchanges globally, Executive Chairman Terrence Duffy told Reuters Insider Friday.

The tie-ups, including London Stock Exchange’s plan to buy Canada’s TMX Group, and Germany Deutsche Boerse’s agreement to buy NYSE Euronext, have sparked speculation over whether futures exchange operator CME would need to bulk up.

The answer, Duffy suggested, is no.

“We are very focused on our core business that we’ve put into place, and we feel we can compete on the strategy we have in place already,” Duffy told Reuters¬† Friday.

CME went on an acquisition spree in 2007 and 2008, buying competitors Chicago Board of Trade and New York Mercantile Exchange. Those purchases, along with the acquisition of a 90 percent stake in the Dow Jones index business, have given the company the strength it needs in the world marketplace, he said.

Duffy declined to comment directly on reports that CME could team with Nasdaq OMX Group Inc. to launch a hostile bid for NYSE Euronext.

“We are watching them very closely,” he said, of global deals being struck, “but at the same time we are very focused.”

Duffy said he was concerned that new rules stemming from Wall Street reform legislation passed last summer could trip up CME’s aspirations for global growth.

Of particular concern, he said, are the costs of complying with the new rules, which are much more restrictive than those in place.

“I am concerned that this could put us at a competitive disadvantage,” said Duffy, who travles to Washington frequently to press his views with regulators and lawmakers.

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