Does it make sense that less than a year after CME Group was forced to close FXMarketSpace – an aggressive move to expand its foreign exchange business – it is trying to prise open the market again? Michael Halls investigates.
The message came from the top in September. Craig Donohue, chief executive of CME Group, signalled the exchange was going to make another attempt to break into the promised land – read promised revenues – of the $2tr a day over-the-counter foreign exchange market.
The keys to the kingdom, he said, were to be found in ClearPort, the clearing platform CME had acquired with last year’s takeover of the New York Mercantile Exchange. Central counterparty (CCP) clearing would be the way in to the FX business.
The initial market reaction to Donohue’s statement was quizzical. Hadn’t CME trumpeted its earlier move into foreign exchange in a joint venture...