FIA president and CEO Walt Lukken made the following statement regarding the approval of CME’s futures commission merchant (FCM) license.

“The approval of CME’s FCM application is the latest and most significant example of a trend that raises serious concerns about market regulation and systemic risk. The approval comes at a time when the CFTC has yet to propose a strong rule to address conflicts among affiliated CFTC-regulated entities.

“Nearly three years ago, FTX sought CFTC approval for a vertically integrated business model. FIA warned the CFTC at that time that such a novel structure would raise concerns about conflicts of interest from combining multiple market functions under one roof. Three years later, these risks remain unaddressed.

“We strongly believe inherent conflicts of interest exist when one organization controls multiple market functions – trading, clearing, intermediation and market regulation. FIA urges the CFTC to move forward immediately on a rulemaking to address this matter.”

Source: FIA

CME Group Receives Approval to Establish Futures Commission Merchant

“We are pleased that the NFA has approved our FCM application,” said Terry Duffy, Chairman and Chief Executive Officer, CME Group. “We remain committed to the FCM model and believe in the time-tested risk management benefits it continues to provide. At the same time, as our industry continues to evolve, our FCM will ensure CME Group is in a strong position to quickly adapt to our clients’ changing business needs.”

Source: CME