CME Aims For Larger Slice Of Hedge Fund Market

by Phillip Morton, Investors Offshore.com

17 July 2006

The Chicago Mercantile Exchange, the world's largest financial exchange, has announced the creation of a new team designed to expand CME's global customer base by serving current hedge fund and active retail customers, and attracting new hedge fund customers to the exchange.

The team will be led by Tina Lemieux, a 10-year CME veteran who previously served as head of the company's equity product team.

Before assuming this new role as Managing Director, Hedge Fund and Broker Services, Lemieux worked to develop hedge fund and retail business as head of the CME equity product line. She previously served as Director, CME Equity Products and held foreign exchange and technology marketing positions for CME.

Prior to joining the CME in 1995, Lemieux worked in marketing and treasury sales in the London office of Enskilda Securities, where she was responsible for selling foreign exchange products to hedge funds. She also headed the London office of Indosuez Carr Futures, worked as a Marketing Director at Dellsher Investment Company, and served as a futures broker for First Chicago NBD Corp.

The new Hedge Fund and Broker Services group will be assisted by CME's Europe and Asia offices and will also include Kelly Brown, Director, Hedge Funds and Mark Omens, Associate Director, Broker Services in Chicago.

"We continue to see opportunity to promote the transparency, liquidity and operational efficiencies that trading CME products can bring to the hedge fund and active retail communities," stated Rick Redding, Managing Director, CME Products & Services.

"Creating this team will establish a single point of contact for these important client segments, and it will also enable Tina and her team to cross-sell all of CME's products and services to our existing and prospective hedge fund and retail customers around the world," he added.

Since 2003, CME has worked to attract more hedge fund business through growing customer relationships and implementing innovative incentive programs:

Inactive Clearing Memberships: CME has 10 hedge funds that trade as inactive clearing members. Inactive clearing members are subject to financial reporting requirements and obtain member trading rates. They clear trades through full CME clearing firms.

Family of Funds Memberships: Of those 10 inactive clearing members, five hedge funds have CME Family of Funds memberships. A family of funds may receive member trading rates without the need for each fund in the family to become an inactive clearing member.

Corporate Memberships: CME also provides plans under which hedge funds can be corporate members, such that they are provided certain privileges of membership, including volume incentives. Currently, 26 hedge funds hold corporate memberships.

Pricing Incentives: In 2005, CME introduced pricing programs in which hedge funds could obtain discounted trading rates for CME FX Products traded electronically.

CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange managed $47.0 billion in collateral deposits at March 31, 2006, including $3.8 billion in deposits for non-CME products.

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