CME Group Customer Forum · © 2015 CME Group. All rights reserved. CME Group Customer Forum Singapore April 14 Hong Kong April 16 London April 29 Chicago May 7 Spring 2015 © 2015

© 2015 CME Group. All rights reserved.

CME Group Customer Forum

Singapore April 14Hong Kong April 16London April 29Chicago May 7

Spring 2015

http://www.cmegroup.com


Agenda•  E-Trading Update

Ø  Market Data Platform 3.0Ø  Drop Copy 4.0Ø  New iLink Architecture – MSGW

Ø  Revised iLink Session PolicyØ  Other Upcoming CME Globex Releases

v  Implied Optionsv  User Defined Instrumentsv  Leap Secondv  CME STP

•  Partner Exchange Updates

•  CME Portal & SmartClick

•  Product Updates

2


MDP 3.0: Features and BenefitsLaunched Market Data Platform (MDP) 3.0, CME Group’s next generation market data protocol All CME and Hosted Partner Exchange markets available BVMF and MexDer channels launching in 2nd half of the year State of the Art Technology

•  Outperforms legacy market data feed more than 90% of the time

•  Trade Summary message: streamlined and comprehensive match reporting with optional, anonymous order identification

•  Simple Binary Encoding on most current industry technology standard (FIX Protocol 5.0 SP 2) for faster and more efficient delivery

•  Event-driven market price and trade information.

•  Nano-second timestamps (micro-second accuracy)

3


MDP 3.0: Customer Adoption by the Numbers

Certified Firms

202 (65%)

Firms Listening to MDP 3.0 Channels

141 (61%)

Executing Firms

Displaying their Order Numbers

51(8%)

4


MDP 3.0 vs. FIX/FAST: Feed Statistics

MDP 3.095 Avg pps

251,974 Avg bps

FIX/FAST•  139,058,784 Avg Daily Msg

Count•  27,182 Avg Peak # of Msgs•  71 Mbps Avg Peak b/w

MDP 3.0•  147,831,544 Avg Daily Msg

Count •  38,019 Avg Peak # of Msgs•  110 Mbps Avg Peak b/w

Stats from week of 3/16/2015

5


MDP 3.0: Schedule

MDP 3.0 / FF ParallelCurrent

BVMFNR: Jul 2015Prod: Aug 2015

MexDer NR: Aug 2015Prod: Sep 2015

FF No Longer a Feed of RecordEnd of Sep 2015

Shutdown ALL FF

ChannelsMid-Oct

2015

Order Routing Partners Available

6









7


In Q3 2015, CME Group will introduce a new Drop Copy implementation featuring:

• Architectural changes to align it with the upcoming new iLink architecture• New messaging • Functionality changes

***Note that certification is required for all Drop Copy clients and is a pre-requisite for access to Drop Copy for MSGW sessions***Changes will include:

• New encapsulated message type (35=n)• Enhancements to make Drop Copy consistent with iLink FIX behavior• New session model with separate:

- Convenience Gateway (CGW) Drop Copy Target Sessions (for CGW iLink source sessions)

- Market Segment Gateway (MSGW) Drop Copy Target Sessions (for MSGW iLink source sessions)

• Sequence streams in Drop Copy will follow the CGW and MSGW iLink Architecture model

Drop Copy 4.0

8


Highlights of Message Level Changes

Messaging Overview

Connectivity Management•  CME Group recommends a heartbeat interval of 30 seconds. Must be between 5 and

60 seconds else the logon message will not be acted upon.

Message Recovery: Drop Copy to Client•  CME group strongly recommends the use of Enhanced Resend Request. Both basic

and enhanced resend request are available for Drop Copy 4.0.

•  Maximum limit of 2500 messages per resend request, any request exceeding the limit will result in Session Level Reject

•  FIX Resend requests are available for messages from the current business week, only. Resend requests will only be fulfilled for messages with sending time within the past 48 hours.

•  Real time messages will be published at the same time as the resend response messages initiated by the client system’s resend request.−  The client system must manage sequence numbers from resend response and

real time messages separately

9


DC CGW Target session OYZV2K sequences messages from multiple iLink Gateways

Current Drop Copy Architecture: CGW Sessions

10


MSGW DC Target session OMADGF sequences messages from each MSGW iLink Gateway

New Drop Copy 4.0 Architecture: MSGW Sessions

11


Fault Tolerance •  Client systems must always connect and log into the designated primary

gateway as long as it is available. An attempt to log into the designated backup while designated primary is available will result in a forced logout.

•  Customers can only receive acknowledgements through their primary connections-  If the primary fails, the backup is promoted to the primary role

Bandwidth Impact•  Bandwidth impact will be minimal – the new 35=n for Drop Copy 4.0 is

comparable size to the current Drop Copy messaging •  Frequency of messaging will not change

Fault Tolerance and Bandwidth Impacts

12


•  All current DC customers must certify for and migrate to Drop Copy 4.0-  Prerequisite for systems who wish to consume MSGW source session data-  Certification required for both session models

•  The Client Impact Document, the specifications and the FAQ are available on cmegroup.com

•  Drop Copy 4.0 is currently available in New Release and Autocert+ for customers to test and certify their applications-  In New Release, Drop Copy customers will receive new target sessions for both CGW

and MSGW message sequencing

Mandatory Drop Copy 4.0 Certification

13


Separate CGW and MSGW Target sessions

•  Once certified, customers should contact their GAM to set up a new Drop Copy 4.0 group to migrate

•  Customers can choose to hot-cut or to run CGW groups in parallel-  GAM will create a new production Drop Copy 4.0 group – a duplicate to their existing

group(s) - and provide the following information: New Drop Copy 4.0 CGW target session IDs, IPs, ports and passwords

•  Drop Copy 4.0 will not be backwards compatible •  After MSGW has been implemented, customers certified for Drop Copy 4.0 can

add MSGW iLink source sessions to their Drop Copy 4.0 groups-  GAM will provide a new Drop Copy MSGW target session ID, port and password -  A Single MSGW target session ID will have 19 IPs, one corresponding to each Drop

Copy Market Segment Gateway-  CGW and MSGW source sessions will be in separate target sessions, but can be

part of the same Drop Copy Group

Production Migration

14


Example of the Drop Copy Group Production Migration Production Migration

Drop Copy Group A - 2.0

OYZV2KAB1AB2AB3AB4

OYZV3KBC1BC2BC3BC4

Drop Copy Group A - 4.0

OYZV4KAB1AB2AB3AB4

OYZV5KBC1BC2BC3BC4

OMADGFEF1EF2EF3EF4

•  Only CGW Source sessions supported

•  Multiple CGW Drop Copy Target sessions per Drop Copy Group

•  Drop Copy CGW Target sessions with their respective source sessions from the current Drop Copy will be copied to the new Drop Copy 4.0 group

•  Once the New iLink architecture is launched, MSGW source sessions can be added to the Drop Copy 4.0 group, to a single Drop Copy MSGW Target session

15


The current Drop Copy architecture will be phased out •  Drop Copy 4.0 Production Launch date: Q3 2015•  Fees remain unchanged

-  The parallel, duplicated Drop Copy groups will be free of charge for 6 months from launch

-  Customers who continue to run in parallel beyond 6 months will be charged for the duplicate set of DC groups at the current rate of $500/month

•  End of life of current Drop Copy architecture: TBD -  The existing implementation of Drop Copy will be phased out on a date to be

published in the CME Globex Notices-  All customers leveraging the Drop Copy service must be certified and migrated by that

date

•  Watch CME Globex Notices for more information regarding the Production rollout and migration

Production Migration

16









17


Q4 Launch of New Order Routing Architecture

Market Segment Gateways (MSGWs)•  FIFO message handling per market segment•  Consistent performance across iLink sessions

-  Single entry point for all traffic for each market

•  New Session Access Model•  New Session Policy•  New Drop Copy solution for real-time risk management

-  Supports both Convenience Gateway (CGW) and Market Segment Gateway (MSGW) sessions

New iLink Architecture: Market Segment Gateways

18


MSGW Internal Launch

Internal roll out of MSGWs into the iLink Infrastructure – Q3•  CGWs will route through the new MSGWs•  No direct customer access to the MSGWs•  Includes a failover behavior change, which will affect all clients.

New iLink Architecture: Launch

•  Utilize a single Session ID, password and port across all MSGWs•  New sequence stream management

-  Determined by a combination of SessionID and MarketSegmentID

•  Fault tolerance - Customers must log on to the exchange-defined primary MSGW first

•  iLink messaging changes – to support MSGW access and sequencing

Optional Direct Access to MSGWs – Q4

19


MSGW-n

SessionID:PortEF1:9000EF2:9001EF3:9002

IP:10.10.10.3

MSGW-n


IP:10.10.10.3

MSGW-n


IP:10.10.10.3

MSGW-01


IP:10.10.10.1

MSGW-02


IP:10.10.10.2

CGW iLink Sessions

iLink Convenience Gateway-1

SessionID:PortAB1:9000AB2:9001

IP 10.10.1.1

iLink Convenience Gateway-2

SessionID:PortBC1:9000BC2:9001

IP 10.10.1.2

MSGW iLink Sessions

Trading Engine 1

Trading Engine 2

Trading Engine n

Session EF1 will be replicated across MSGWs

A MSGW session will have different IPs and the same port across MSGWs

MSGW sequence stream will be determined by session & Market Segment Indicator•  Sequenced by FIX sequence number,

SessionID <and> TargetSubID

MSGW-01


IP:10.10.10.1

MSGW-01


IP:10.10.10.1

MSGW-2


IP:10.10.10.2

MSGW-02


IP:10.10.10.2

MSGW-02


IP:10.10.10.3

MSGW-01


IP:10.10.10.1

MSGW-n


IP:10.10.10.5

Shared SessionID Among All MSGWs

New iLink Architecture: Session Model

20

© 2015 CME Group. All rights reserved. 21

New iLink Architecture: Timestamps

2

Participant

Match EngineM

D G

atew

ay

OE

Gat

eway

3

1,2 1,3

1

1

1

Time iLink Tag MDP 3.0 Tag

1 60/5979 602 523 52

•  MDP 3.0 introduced Globex timestamps in nanoseconds with microsecond precision

•  Market Segment Gateway adds additional timestamps in nanoseconds with microsecond precision

•  New timestamp (1) on iLink and MDP representing when orders reach the Market Segment Gateway

•  New timestamp (1) is included in the MDP Trade Summary and order book update messages

•  Allows for customers to compare their timestamp at the MSGW with the aggressors timestamp and understand current system performance


Available Now•  Client Impact Document•  New Release: MSGW for all markets

Summer 2015 Autocert+ Test Suite available

Q3 2015: Pre-Launch•  Internal MSGW rollout for all markets•  Mock trading sessions for customers to interact with

the system and experience failover

Q4 2015: Production Launch •  MSGW available for direct access•  Mock trading sessions for each production weekend

launch

New iLink Architecture: Launch Milestones

22









23


New Session Policy: 4 Components

Port Activation

Charge

Monthly Inactivity Charge

Volume Tiers

Excess Capacity Charge

CGW / MSGW Both Both MSGW MSGW

Level Applied Session ID Session ID Globex

Firm ID Session ID

Timeframe Measured n/a Previous Month 2 Previous

Quarters Monthly

Measurement n/a

MSGW: < 1,000 sides

CGW: < 100 sidesADV

# of sessions over tier

allocation

Impact

MSGW: $250

CGW: $125

One-time charge per session*

MSGW: $1,000/month per session

CGW: $100/month per session

ADV tier determines

base session

allocation

$500/month per session

24

A new policy will be rolled out in conjunction with the launch of the Market Segment Gateway (MSGW):


Recent Session Policy Updates

Based on recent customer feedback and to render the policy more flexible, we are making these changes:•  Tier assignment will be based on ADV during the greater of the last two

quarters •  Firms who fall into a lower tier will be allowed to keep sessions above

their new tier but those sessions will be subject to Excess Capacity Charges (ECC)

•  Tiers 1 and 2 have been combined and will be allowed up to 5 MSGW sessions

•  Session allocation during Phase 1 will be 30% of the Phase 2 tier allowance

25


Globex Firm ID MSGW Session Allowance Tiers

26


Example: Customer XYZ Trading

•  The above represents the first ADV calculation to identify the tier for a GFID•  In this case the customer would fall into tier 4 (based on highest of last 2 quarters ADV)

•  The above represents the customer’s next tier as of Q3. As illustrated, their volume has increased in Q2 thus moving them to tier 6

•  The above represents the GFID’s next quarterly calculation. In Q3 their volume dropped quite a bit, but since we look at the last 2 quarters they will remain in tier 6

•  The above represents the next tier calculation. In this period due to consecutive quarters with low volume they are dropped to tier 2

•  Here they can either give back the overage of sessions (70) or keep the excess sessions and pay the ECC for all session above the new tier allowance

Time Period Executing Firm ADV Q4 ADV Q1 Tier MSGW Session Allowance MSGW Sessions Subject to ECCApril 1st 2015 111 -‐ XYZ Trading 55,000 35,000 4 30 25 0

Time Period Executing Firm ADV Q1 ADV Q2 Tier MSGW Session Allowance MSGW Sessions Subject to ECCJuly 1st 2015 111 -‐ XYZ Trading 35,000 150,000 6 70 80 10

Time Period Executing Firm ADV Q2 ADV Q3 Tier MSGW Session Allowance MSGW Sessions Subject to ECCOctober 1st 2015 111 -‐ XYZ Trading 150,000 23,000 6 70 80 10

Time Period Executing Firm ADV Q3 ADV Q4 Tier MSGW Session Allowance MSGW Sessions Subject to ECCJanuary 1st 2016 111 -‐ XYZ Trading 23,000 21,000 2 10 80 70

27


Q2 2015

Milestones

April/May: Customers notified by their GAM of estimated Phase 1 and 2 MSGW session allocation•  Based on greater ADV during Q4 2014 & Q1 2015

July: Updated estimates provided based on Q1 and Q2 2015 for Phase 1 and 2 MSGW session allocation

September: Customers notified of MSGW IP addresses

Q3 2015

October: New session policy goes live•  Final MSGW session allocation will be available in FADB•  Request Phase 1 MSGW sessions up to the limit allowed

December/January: •  Request Phase 2 MSGW sessions up to the limit allowed•  Phase 2 estimated to begin in January

Q3 2015









29


Creating liquidity in spreads and back months through implied functionality

• Enhance options market quality and liquidity to advance migration to CME Globex

Option Spread Type and Product Eligibility• 8 recognized UDS strategies will be available for Implied Options:• Calendar, Straddle, Strangle, Vertical, Risk reversal, Diagonal, Guts, Double• Request for Quotes (RFQs) will turn on implied functionality temporarily

Messaging Impacts• FIX tag for implied eligibility:

- If option instruments are implied eligible, - MDP 3.0 – Security Definition with Implied Eligibility flag in Tag 872 InstAttribValue

Certification RequirementsNoneProduction launch for specific markets: Q4 2015

Implied Options

30


Feature Implied Futures Implied OptionsFrequency / Pace Streaming On-Demand driven by RFQs,

Configured with Delay + DurationImplication Direction Complementary;

INs + OUTsComplementary;INs + OUTs

Implied Generations Up to 2nd Generation 1st Generation only

Spread Scope Exchange-Defined, Ratios, ≥ 2 Legs, 1:n ratio

User Defined, limited to 8 strategies, 2 legs, 1:1 ratio

Order Priority Customer orders always prioritized over implied orders in FIFO Markets•  Size priority in all others

New Aggregated Price / Time to determine priority•  No preference for customer orders over

implied orders

Comparison to Futures Implied Functionality

31


User Defined Instruments (UDI)

• Allows users to dynamically create new option strikes.

• For options in Energy and Metals only.

• UDIs can only be created using CME Direct.• Once created, market data will be published on MDP 3.0 and order entry through iLink will be supported

• Both Put and Call will be generated for the requested strike price.

• Only strikes which meet the product’s listing characteristics will be generated.

• Certification not required.

NR & Production: Q4 2015

32


What is a Leap Second?

Watch CME Globex and OTC notices for more information.1 http://en.wikipedia.org/wiki/Leap_second

Leap Second

•  A Leap second is a one-second adjustment that is occasionally applied to Coordinated Universal Time (UTC) to keep in synch with the mean solar time.1

•  Previously, the leap second was added while the market was closed.

•  A positive leap second will be introduced on June 30, 2015 (trade date July 1). CME Group will delay the market open for all products from to 7:30pm CDT pre-open and a 7:45pm CDT open.

•  All Clearing user interfaces will be unavailable from 6:50pm CDT to 7:10pm CDT.

33


Key Benefits

CME STP

•  Allows free connectivity to receive all trades cleared at CME for all firm types•  Reduces dependency on report generation from FCM to Trading/Broker entity•  Ensures real-time regulatory compliance•  Uses an industry standard protocol and access via the Internet or leased line•  Greatly expands on product scope that was available in Cleared Trades API•  Leverages SMART Click for authentication across all legal entities•  For more information, please contact STP Sales at [email protected]

Planned decommission date for Cleared Trades API: July 31st

Venues Supported:•  CME Globex•  CME ClearPort•  Floor Trades

Exchanges Supported:•  CME •  CBOT•  NYMEX

•  COMEX•  DME•  CME Clearing Europe

34






•  Partner Exchange Updates•  CME Portal & SmartClick


35


Global Partner UpdatesChina Financial Futures Exchange (CFFEX)•  Only state-approved financial derivative exchange in China. Its flagship product is CSI300

Index Futures.

•  CME Group will provide data administration services including licensing, onboarding, invoicing, fee collection and audit on behalf of CFFEX for clients outside the People’s Republic of China.

•  CFFEX data will be distributed on its own MD channel via CME Globex in MDP 3.0 format.

•  Go-live date is currently scheduled for Q3 2015. For additional information please contact [email protected].

Bursa Malaysia 2014 trading volume up 17% (50,654 ADV) YoY with Crude Palm Oil Futures recording ADV of 41,285 Granted Foreign Board of Trade status by U.S. CFTC on January 22, 2015. US based customers may now leverage their direct connection to trade BMD on CME Globex. To get access directly from the US, participants should:

•  establish a relationship directly or indirectly (through their existing FCM) with a BMD clearing member firm.

•  obtain a new Execution Firm and iLink session, approved by BMD, that maps to a BMD clearing member.

Event on May 27th 4-6pm in CME auditorium at 20 S. Wacker36 36


Global Partner UpdatesKorea Exchange •  On December 8th, KRX launched USD/KRW FX futures on CME Globex for night time trading. •  The FX contract is growing MoM with ADV of 83 in Jan, 536 in Feb, and 1,339 in March.

Dubai Mercantile Exchange•  DME had a positive 2014, with trading volumes up 33% year-on-year and ADV of 8,449 lots.•  Trade at Marker, based on Singaporean Market close set a single day record of 4,044 lots on

Jan. 20th.MexDer •  Following the successful Q4 launch of the mini-IPC, MexDer’s Clearinghouse is offering netting

of margins for the IPC Equity Index vs. the mini contract as of March 27t

BVMF •  North-to-South Order Routing ADV in Q1, 2015 is over 66,000. The most heavily traded

contracts are the One Day Interbank Deposit Rate (DI), US Dollar (DOL) and IBOVESPA Equity Index (IND).

MGEX •  After a record 2014, with yearly volume up 47% from 2013, MGEX set a monthly record in

February, 2015, with ADV at an all-time high of 10,392. •  Launched Commodity Spread Options (CSOs) on their flagship Wheat product on Jan. 31st.

For additional information about the CME Group Partnerships please contact [email protected]

37





v  Implied Optionsv  User Defined Instrumentsv  Leap Secondv  CME STPv  CME Direct

•  CME Portal & SmartClick•  Product Updates

38


CME Application Portal is Evolving into a Single Point of Access For All CME Applications

Q1 2015 2016

Q1 2014

Individual Application Links

39


CME Application Portal Roadmap 2015 and Beyond

Post Trade

ClearPortDeliveries Plus (Q2 2015)BAMS/C21 (Q2 2015)FEC/FEC Plus (Q2 2015)OTC Deal management system

Regulatory Global Repository Services (Q2 2015)Large Trader Reporting (2015)

Administration

BPSCoLo Portal (Q2 2015)EFSFirm Admin DashboardGPS Membership PortalRequest Center

Portfolio & Risk

FirmSoftCME CORERAV ManagerRisk Management ToolsPositions (Q2 2015)Web GalaxC (Q4 2015)

My Profile My InformationMy Notifications (Q4 2015)My Affiliations (2016)

Reporting Clearport ReportingEnterprise Reporting Portal (Q2 2015)

Apps in bold are already in the portal

Administration

40








41


CME Direct is the Exchange-provided trading system

-  Electronic trading for futures & options-  Integrated, real-time option analytics-  Submit off-exchange trades quickly,

e.g. block trades, EFP-  View all your listed and OTC trades-  Real-time block feed-  Multi-FCM, supported by 31 clearers-  STP to major risk platforms

CME Direct Messenger offers IM across networks-  Instant messaging across private networks,

AOL, Yahoo, etc.-  Audited and entitled chat rooms-  Parsing of messages into structured data

CME Direct and CME Direct Messenger are free-of-charge to active traders

Zero footprint: SaaS and internet-delivered

CME Direct: Continued expansion of features, users and FCM support

42

CME DIRECT


Four more releases in 2015-  Focus on options trading and block trade

workflows-  SMART Click ID and .NET 4.5 required

from May 18

Online Interest Rate and FX block trade entry

CME Direct Mobile in Q2

EOS Trader end of life-  EOS Trader users to migrate to CME Direct

by Q4 2015

CME ClearPort trade entry-  All CME ClearPort trade entry to migrate to

CME Direct by the end of 2015

CME STP-  Cleared Trades AP (CTAPI) end of life mid-2015-  All CTAPI users should migrate to CME STP-  Over 20 risk vendors now support CME STP

out of the box

2015 CME Direct Roadmap

43

CME DIRECT MOBILE


Product Updates – Interest Rate Macro Factors

30%

40%

50%

60%

70%

80%

$0

$100

$200

$300

$400

$500

$600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Avg Daily Notional($billions)

Treasury Future Volumes Compared to Cash

Futures Volumes UST Cash Volumes Futures as % of CashCash Volumes are as reported by NYFED and reflect primary dealer activity

Rapidly Expanding Product Scope to Fit Client Needs•  Since 2008 CME has continued to expand the product scope, including Ultra T-Bond Futures and

options, mid-curve options, and weekly option expirations in both Treasuries and Eurodollars. •  Products launched within the last five years account for 5% of interest rate volume at CME Group.

Increasing Focus on Capital Efficiency •  Global regulatory reforms have put additional pressure on intermediaries to charge for balance sheet

consumption. The standardized nature of futures results in netting efficiencies and favorable capital treatment relative to adjacent markets.

•  At the same time, CME now clears the majority of Client’s USD Interest Rate Swaps and this activity can be cross-margined against futures.

Electronic Trading Infrastructure•  CME Globex is a time-tested solution that

offers best-in-class electronic trading within central limit order books.

•  As we approach periods of higher volatility,

clients look for the platform they can trust.


Traders are turning to short term interest rate products (STIRs) to position portfolios for potential changes to FOMC policy •  2Y Note Futures: Treasury product witnessed record trading activity with Q1 2015

volumes increasing 50% YoY to 1.1 Million contracts as focus has shifted to the short-end of the curve.

•  Fed Fund Futures and Options: These products represent a direct reflection of collective marketplace insight regarding the future course of FOMC monetary policy, and trading activity has surged in 2015:

•  Fed Funds Futures ADV has tripled to 61,500 contracts in Q1 2015 compared to Q1 2014, with open interest doubling to 777,300 contracts during this same time period.

•  Number of Large Open Interest Holders increased 34% to 129 from 96 at start of 2015.

Product Updates – Interest Rate Futures

•  Eurodollar Futures: Growth across Eurodollar futures complex driven by short-end contracts with the front 8 contracts representing 69% of volume. This trend is mirrored in Eurodollar options with ADV in the front 8 contracts of +700,000 in Q1 2015.


Electronic trading continues to drive the growth in interest rate optionsProduct Updates – Interest Rate Options

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Treasury Option ADV ADV Pit

ADV Electronic

% Electronic

§  Treasury Futures & Options: •  Incremental growth in Treasury options has been driven by increased activity in the electronic

marketplace, as floor volumes have remained relatively constant over the last three years.•  ADV executed on Globex reached 62% of total volume in Q1 2015, up from 58% in Q1-2014.

•  Eurodollar Options:•  Share of electronic volume has been steadily increasing to an 6-year high of 18% in March

2015, up from 11% in 2014.

0%2%4%6%8%10%12%14%16%18%20%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000Eurodollar Option ADV

ADV TotalADV Pit% Electronic


CME Group FX Options continue to see volumes grow.

•  March 2015 +119% on March 2014•  Year to Date on 2014 volumes are +57%

Product Updates – FX


Weekly Options continue to attract trading interest

48

2012 2013 2014 2015

-

5,000

10,000

15,000

20,000

25,000

Jan

May Sep

Jan

May Sep

Jan

May Sep

Jan

CME FX G6 American-Style Weekly Options ADV

•  April Weekly Options ADV was 18,123•  Weekly FX options volume up 49.3% YTD


CME FX Options –ADV and % Electronic

49

97%

2012 2013 2014 2015

-

20

40

60

80

100

120

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan

May Sep

Jan

May Sep

Jan

May Sep

Jan

% E

lect

roni

c

Thou

sand

sFX

Opt

ions

AD

V

FX Options ADV

YTD Options ADV 93,735


Eurozone, Back in the Forefront

50

CME Group FX futures LOIH at 990, New All-time high.

Euro and the Majors as a group hit all-time highs of 249 and 799 LOIHs, respectively, March 10

Product Updates – FX


FX Futures OTC FX Pricing

•  Central Order Limit Book (CLOB) •  Transparent – listed •  Concentrated liquidity points •  Tight Bid-‐Offer Spreads, especially front month majors •  Liquidity provision from mulEtude of parEcipants

•  No/Limited Transparency •  Fragmented liquidity across all dates and dealers •  Price discovery via quotes from relaEonship dealers

ExecuEon •  Quick ExecuEon -‐ order can be received and acknowledged in under 500 micro seconds

•  STP through CME Clearing houses

•  Voice trading may incur Eme lags / delays to execuEon •  Dealer may impose ‘Last Look’ •  STP defined by counterparty readiness

Fees •  Known upfront costs on a per contract basis •  Costs include potenEal wider bid/offer spreads, trading slippage, sales mark-‐up, and credit charge

•  Costs unknown unEl Eme of execuEon

Credit •  MiEgated credit and counterparty risk via central clearing house

•  No ISDA / CSA negoEaEons •  Requirements known in advance of execuEon •  PorZolio margining benefits

•  Credit relaEonship varies from dealer to dealer •  ISDA / CSA NegoEaEons •  Varying credit lines / analysis over Eme •  PotenEal CVA credit charge applied to spreads

Collateral / Margin •  Margin posted upfront via accepted collateral •  Diverse collateral accepted •  PosiEons auto-‐ne[ed •  1-‐2-‐day Margin period of risk (MPOR)

•  Varying collateral / margin requirements •  May require negoEaEon of CSA •  No margin for Bilateral (but CVA charge) •  5-‐day MPOR for OTC Cleared (if mandated)

Counterparty Risk •  Futures cleared via CME Clearing (CCP) •  Minimal counterparty risk

•  MulEple exposures inherent in bilateral trading ahead of se[lement

•  Increased risk exposure if trading non-‐CLS currency RegulaEon •  CME Listed Futures regulated by CFTC (US) & FCA / BoE (UK) •  Products are not currently regulated

51

Why People are Choosing FX FuturesProduct Updates – FX


Thank you!

Quiz

Q&A


“CME Group”, “CME Europe” and “CME Clearing Europe” are brands of CME Group Inc. and its subsidiaries, members of which include Chicago Mercantile Exchange Inc., CME Europe Limited, CME Clearing Europe Limited and CME Marketing Europe Limited.

Exchange traded and Over-The-Counter (OTC) derivatives are not suitable for all investors, and involve the risk of loss. Exchange traded and OTC derivatives are leveraged investments, and because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money initially deposited for an exchange traded or OTC derivative position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade.

CME Group is the trademark of CME Group, Inc. The Globe logo, Globex® and CME® are trademarks of Chicago Mercantile Exchange, Inc. CBOT® is the trademark of the Board of Trade of the City of Chicago Inc. NYMEX, New York Mercantile Exchange, and ClearPort are trademarks of New York Mercantile Exchange Inc. COMEX is a trademark of Commodity Exchange Inc. All other trademarks are the property of their respective owners.

The information within this presentation has been compiled by CME Group for general purposes only. Although every attempt has been made to ensure the accuracy of the information within this presentation, CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in this presentation are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or necessarily the results of actual market experience. All data is sourced by CME Group unless otherwise stated.

All matters pertaining to rules and specifications herein are made subject to and are superseded by official CME, CBOT, NYMEX, CME Europe, CME Clearing Europe and CME Group rules. Current rules should be consulted in all cases concerning contract specifications.

This communication does not constitute a Prospectus, nor is it a recommendation to buy, sell or retain any specific investment or to utilise or refrain from utilising any particular service. This communication is for the exclusive use of Eligible Counterparties and Professional Clients only and must not be relied upon by Private Clients who should take independent financial advice. Circulation should be restricted accordingly.

CME Europe Limited is a Recognised Investment Exchange (RIE) recognised and supervised by the Financial Conduct Authority in the United Kingdom. CME Clearing Europe Limited is a Recognised central counterparty under the UK Financial Services and Markets Act 2000 (as amended) and an authorised central counterparty (CCP) under EMIR. CME European Trade Repository is a business name of CME Trade Repository Limited, a registered trade repository under EMIR supervised by the European Securities and Markets Authority. Globex Markets Limited is authorised and regulated by the Financial Conduct Authority.Chicago Mercantile Exchange Inc. is a Recognised Overseas Clearing House (ROCH) recognised by the Bank of England. Chicago Mercantile Exchange Inc., Board of Trade of the City of Chicago and the New York Mercantile Exchange are Recognised Overseas Investment Exchanges (ROIE’s) recognised by the Financial Conduct Authority.

Issued by CME Marketing Europe Limited. CME Marketing Europe Limited (FRN: 220523) is authorised and regulated by the Financial Conduct Authority in the United Kingdom.


CME Group Customer Forum

Singapore April 14Hong Kong April 16London April 29Chicago May 7

Spring 2015

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