ICE and CETIP announce plans to create a bond trading platform for Brazil. CME’s departing CEO says actually, it looks like he’ll be leaving sooner than expected. Spain receives a rating downgrade and announces that unemployment is just a fraction under 25 percent of the workforce. In today’s top box, you’ll find two hefty “Five Minutes” interviews: one with Bart Mallon of Cole-Friedman, Mallon & Hunt talking about the JOBS act and hedge fund advertising; and one with new DTCC CEO Michael Bodson about his perspective on where things stand and where they’re headed.

By John J. Lothian

With the Futures Industry Association’s International Conference ready to begin in Boca Raton, Florida tomorrow, CME Group hit the wires with some big news today.  The Boca Raton bombshell came early this year as the CME announced Craig Donohue will retire at year’s end and be replaced by a combination of Phupinder Gill and Terry Duffy.  Donohue took over the CME’s CEO job on January 1, 2004, giving him an unusually long tenure for a CEO or exchange CEO. 

Gill will become CME Group CEO and Duffy will add the title of president.  This will give CME Group a new inside/outside strategy, with Duffy as the outside facing component and Gill handling the inside CME responsibilities.

Each time the CME has changed its top official has represented the emergence of a new era.  Clayton Yeutter became CME president during a period of high political intrigue, including the futures industry fighting off a transaction tax.  Bill Brodsky became CME president when the exchange needed to implement and grow its options business and, by the time he left, every major CME market had listed options contracts.  James McNulty was brought in to guide the CME through the demutualization, for-profit and IPO process. 

CME Group released the following statement on February 2, 2012:

CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers
Fund Launched as Initial Step in Restoring Confidence of Market Users
Press Release

CHICAGO, Feb. 2, 2012 /PRNewswire/ — CME Group today announced that it will establish a $100 million fund designed to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets.  In light of the recent MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country’s food producers who are using CME Group futures markets to hedge their crops and livestock that feed the world.

• Guarantee intended to assist Trustee in making prompt distribution of customer segregated funds and frozen cash balances
• CME Trust to provide its roughly $50 million in assets to CME Group market participants to offset missing customer funds held at MF Global

CHICAGO, November 11, 2011 – CME Group, the world’s leading and most diverse derivatives marketplace, today took extraordinary measures in order to accelerate the return of substantial customer cash and other assets securely held at CME Clearing, other clearing houses and MF Global custodians following the failure of MF Global.  Though CME Clearing does not guarantee FCM-held assets, CME Group is willing to provide a $250 million financial guarantee to the Trustee to give the Trustee greater latitude to make an interim distribution of cash to customers now, given the monumental task he faces to sort through considerable data and claims in order to complete the MF Global liquidation and make distributions to creditors.  Additionally, CME Trust will provide $50 million to CME Group market participants in the event there is a shortfall at the conclusion of the Trustee’s distribution process.

To the CME Group Trading Community:

Yesterday marked one week since a Trustee was appointed to liquidate MF Global Inc. due to a shortfall in customer segregated funds held at the firm. The appointment was made at the request of the Securities Investor Protection Corporation (SIPC). Until early Monday morning, October 31, it had been expected that MF Global would be sold and all customers would be fully protected, as a purchaser would take over positions, customer property and operations.

The U.S. Bankruptcy Code and CFTC bankruptcy regulations require that free credit balances be frozen at least on an interim basis, and that fully-paid securities and warehouse receipts may not be made immediately available. CME Group has worked diligently with the CFTC and the Trustee to permit the transfer of positions and a portion of the customer collateral held by CME Group to support those positions. CME Group is continuing its efforts to secure a release of a substantial portion of the remaining customer property now controlled by the Trustee.