Satish Nandapurkar is among the pioneers in the new era of exchanges as they went public, international and electronic. He most recently joined the pioneering marketplace – the Chicago Climate Exchange (CCX) – as president in September 2008. He served as CEO of Eurex US and US Futures Exchange and was managing director and head of products and services at the Chicago Mercantile Exchange as it went through its demutualization and IPO. Nandapurkar also worked in a number of capacities at firms including: O’Connor & Associates, Bank of America, Deutsche Bank Morgan Grenfell, Swiss Bank and OptiMark Technologies. He spoke recently with JLN’s Jim Kharouf and explained how his son helped steer him into taking the CCX job.
Q: How did you get started in the futures business?
A: I was an officer in the Air Force right out of college, but knew I wanted to get into the markets when I got out in 1988. But it was right after the 1987 crash and not many firms were hiring. I luckily got a job with O’Connor & Associates starting off on the listed options trading side as a floor clerk. I ended up moving off the floor and into the OTC derivatives business as they were bought out by Swiss Bank Corp. Even though I’ve been in the listed derivatives business for the past nine years, I actually spent more time – 12 years in fact – on the OTC side doing structured products.
A: O’Connor was a unique place back then, hiring good people right out of college who came from diverse places and with varied academic backgrounds. You didn’t really need to know markets because O’Connor’s real strength was in educating people. They were always known as Options University with a process and discipline for training options traders and risk managers, supporting them with the best technology, and then putting them to work in this huge trading engine. As a result, a lot of people were trained from the ground up, and by the time they were in their mid-20s were pretty seasoned options traders.
Of course, over time, people left and went to banks and other trading firms, especially for equity derivatives and foreign exchange derivatives. In the 1990s and early 2000s, a lot of the derivatives desks at places like UBS (that eventually purchased O’Connor), CSFB, Morgan Stanley and Deutsche Bank, were run by former O’Connor guys. And in Chicago, you have a number of firms started by former O’Connor guys – Helios, Peak 6, Wolverine, CTC – to name a few.
Q: You’ve held a number of challenging positions, especially as CEO of Eurex US, an exchange that brought a new level of competition to the U.S. Looking back at it, what do you think Eurex US did for the market?
A: The biggest thing was it was a real catalyst for electronic trading. There was already a slow, gradual movement occurring towards electronic trading. But there were institutional and political obstacles to having that process move forward at a faster pace. By bringing real competition to the landscape, Eurex US forced incumbent exchanges to move a lot quicker than they might have and effectively accelerated the move towards electronic trading, lower fees and a level playing field. The level of liquidity even now is phenomenal compared to where it was just five years ago.
Q: Eurex US and USFE ultimately did not succeed. Any regrets about taking on the CBOT and CME?
A: No, it was a tremendous challenge and good progression in my career. I had run the Products and Services Division at CME. Prior to that, I had a 12-year career on the bank and OTC derivatives side. I always wanted to run a place and be CEO. Even though Eurex US wasn’t as successful as we’d hoped, for me it was a tremendous learning experience. You really had to be versatile to take on that role. But no regrets at all.
Q: Having grown up in Oklahoma, you are a big Oklahoma Sooners fan. Which school would you like most to beat in football Texas or Nebraska?
A: After losing five BCS games in a row, I’d just like to see them win a BCS Bowl game. But it’s always nice to beat Texas.
Q: There is an interesting connection between you, CCX and the University of Oklahoma.
A: The University of Oklahoma is actually a member of CCX, as are a number of other universities, and they recently announced that the main campus would be entirely powered by wind by 2013.