Forget the doom and gloom of years past in the markets. CME Group had a great year in 2014, even with the ongoing headwinds from the Fed’s ongoing freeze on interest rates and more regulation hitting the market-base, said Phupinder Gill, CME’s CEO, at the FIA Boca conference.
“We saw double digit growth in fourth quarter across all six of the asset classes,” Gill said, adding that the exchange ended up handling about 13.7 million contracts per day for the year. “I’m very pleased to see that momentum from the fourth quarter continue into the first quarter of this year.”
February was a record month for the exchange, posting 15.1 million contracts traded with a strong month in energies and interest rates.
“Globalization is a very big priority for CME Group,” he said. “About one-third of the revenues for CME Group come from outside the US. That has grown tremendously and will continue to grow for us.”
For Gill, Europe and Asia represent strong growth opportunities for the exchange.
“It’s not just the products we have now, but we’re also doing some development work,” Gill said. “For example in Europe, in the first quarter, we rolled out some energy related products that are doing exceptionally well.”
He added that regulation will continue to be a key issue for the industry over the next two to three years, as the US regulations take root and European changes continue to trickle in behind them.
“When it comes to the regulatory environment, it’s best described in two big chunks,” he said. “There’s what’s going on in the US, which is the implementation of Dodd-Frank, and that has been largely completed and is behind us. In Europe, it’s quite a bit different with the implementation of MIFID and MIFIR not completely done, there is a lot of debate going on.”
On the technology front, CME will continue to push for new and more efficient ways to do business, especially with cybersecurity taking the spotlight.
“The issues that keep emerging still surround what we care about, which is safety and soundness,” Gill said. “The reality in which we operate in, is that cybersecurity has become front and center for every exchange. And not just every exchange, every firm around the world.”
Going forward in 2015, Gill said the exchange has laid the groundwork for growth in the coming years, once again with Europe and Asia leading CME’s global growth story.
“Barely five or six years ago, we had two or three people in Asia,” Gill said, adding that last year, they had 50 people there. “As I stand here now, there are 90 people in Asia. The growth rate that came out of Asia in the fourth quarter last year was 56 percent.”