CME Group Chairman and Chief Executive Officer Terry Duffy to Appear Before U.S. House of Representatives Agriculture Committee

Rhea-AI Summary

CME Group Chairman and CEO Terry Duffy will testify on May 12, 2022, before the House Agriculture Committee regarding an FTX proposal that may increase systemic risks in the U.S. financial system. Duffy criticized FTX's proposal as inadequate, claiming it could eliminate up to $170 billion of loss-absorbing capital, weaken credit checks, and compromise risk management. The hearing will be held at 10:00 a.m. Eastern time, both online and in-person in Washington, D.C., with Duffy's testimony available on the CME Group website.

Positive

• Duffy's testimony highlights the company's commitment to market stability and integrity.
• CME Group is positioned as a leader in the derivatives marketplace, which may enhance investor confidence.

Negative

• FTX's proposal threatens to weaken market stability and could result in significant systemic risks.
• The potential removal of $170 billion of capital from the cleared derivatives market could negatively impact market participants.

CHICAGO, May 11, 2022 /PRNewswire/ -- CME Group Chairman and Chief Executive Officer Terry Duffy will appear at a hearing of the House Agriculture Committee on Thursday, May 12 to review an FTX proposal to launch an altered clearing model that could inject significant systemic risk into the U.S. financial system.   

"FTX's proposal is glaringly deficient and poses significant risk to market stability and market participants," Duffy said. "FTX proposes to implement a 'risk management light' clearing regime that would significantly increase market risks by potentially removing up to $170 billion of loss-absorbing capital from the cleared derivatives market, eliminating standard credit checks, and destroying risk management incentives by limiting capital requirements and mutualized risk. Under false claims of 'innovation,' FTX's proposal is nothing more than cost-cutting measures that would come at the expense of risk management best practices, market integrity, customer safety and, ultimately, financial stability."

The hearing is scheduled for 10:00 a.m. Eastern time and will take place in a hybrid format on Zoom and in Room 1300 of the Longworth House Office Building in Washington, D.C. Duffy's written testimony also will be available on www.cmegroup.com at that time.

About CME Group
As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of 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. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively. Dow Jones, Dow Jones Industrial Average, S&P 500 and S&P are service and/or trademarks of Dow Jones Trademark Holdings LLC, Standard & Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as the case may be, and have been licensed for use by Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners.  

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SOURCE CME Group

FAQ

What is the purpose of Terry Duffy's appearance before the House Agriculture Committee?

Terry Duffy will testify regarding an FTX proposal that could increase systemic risks in the U.S. financial system.

What are the main concerns about the FTX proposal discussed in the hearing?

Duffy raised concerns that the FTX proposal could eliminate $170 billion of loss-absorbing capital and compromise risk management practices.

When is the hearing scheduled and where will it take place?

The hearing is scheduled for May 12, 2022, at 10:00 a.m. Eastern time, taking place in Washington, D.C.