CME Group Inc. execs are working feverishly to shape what's expected to be the biggest overhaul of financial services regulation in decades.
CEO Craig Donohue, Executive Chairman Terrence Duffy and Chairman Emeritus Leo Melamed flew to Washington last week for a round of meetings with regulators and lawmakers as a key congressional panel put the final touches on a bill that expands government oversight of the Chicago-based exchange.
As the execs headed back to Chicago on Feb. 12, the committee passed a bill that gave its chief regulator, the Commodity Futures Trading Commission, broader power. Even though the bill didn't go as far as originally proposed to expand the regulator's say on trading practices, the exchange blasted the measure in a statement claiming it would drive business to overseas markets.
CME is in for even tougher battles as members of Congress and the Obama administration work to fix a regulatory system that failed to prevent the financial turmoil of recent months. Both the CME-owned Chicago Mercantile Exchange and the Chicago Board of Trade have seen banks and other big customers slash trading; the company wants to make sure the inevitable regulatory fixes don't hurt business further.
The bill expands the authority of the trading commission to include oversight for over-the-counter derivatives such as credit-default swaps, a key new business CME is targeting. But the bill would also let the CFTC limit trades on energy and grains, a provision CME says will hurt trading.