Report: CME Group to Face off With FTX After Filing for Futures Commission Merchant Status

CME Group Will Face FTX After Applying for Dealer Status in the Futures Commission – Bitcoin Financial News

According to a recent report, CME Group, the world’s largest derivatives exchange, is looking to register as a Direct Futures Commission (FCM) dealer. CME Group’s decision follows crypto exchange FTX, where the crypto company has applied to become a derivative clearing organization and is awaiting approval from the US Commodity Futures Trading Commission (CFTC). If the CME group is approved to be an FCM, the company can bypass third-party brokers and offer futures contracts directly on the CME platform.

Derivatives exchange CME Group registers for FCM while FTX awaits CFTC approval

The world’s largest derivatives exchange, CME Group, has reportedly filed papers to become a futures commission trader (FCM), according to Report Published by The Wall Street Journal (WSJ). Wall Street Journal author Alexander Osipovich explained that CME introduced the registration in August and that Osipovich sees the company as “taking a cue from [the] FTX cipher competitor.

If the CME Group’s FCM registration is approved, CME will be able to offer derivatives directly without the need for brokerage firms such as TDAmeritrade, Saxo Bank Interactive Brokers, Robomarkets and Grandcapital. FTX is awaiting CFTC approval to become a derivatives clearing organization. Last March, the Commodity Futures Trading Commission (CFTC) opened for public comment so it could learn about FTX’s proposal. In mid-May, CME Group President and CEO Terry Duffy Wrote That FTX move could represent “market risk”.

“The FTX proposal is blatantly incomplete and poses [a] Significant risk to market stability and market participants,” Duffy said at the time. “FTX is proposing to implement a ‘light risk management’ clearing system that would significantly increase market risk by removing up to $170 billion of loss-absorbing capital from the clearing derivatives market, eliminating standard credit checks, and destroying incentives to manage risk by reducing capital requirements and mutual risk.”

The report Osipovich wrote details that Advantage Futures Chairman and CEO Joseph Jenan says the move could be too dramatic. “I don’t expect the CME to go the way of competing directly with FCMs for clients,” Jinan said. “However, if they go down this path, it will be a game changer for the FCM industry and a major concern for every FCM.”

As the CFTC considers the FTX proposal, Osipovich cited Craig Berong, a professor of finance at the University of Houston when he said the CME FCM’s decision was in response to the FTX plan. “From a philosophical perspective, they would prefer not to. But if the CFTC approves the FTX model, from a competitive perspective, they may feel they have to do so,” Beirong said on September 30.

Osipovich also posted a comment from a CME Group spokesperson who commented on CME’s August FCM filing. “Our commitment to the FCM model and the significant benefits of risk management that it provides to all industry participants remains unwavering,” said a CME Group representative. in terms of bitcoin (BTC) Futures volume, FTX and CME Group have relatively the same amount of Bitcoin futures open interest And the BTC futures trading volume like that.

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Bitcoin Futures, CME Group, CME Group CEO, CME Group President, Craig Pirrong, Derivatives, Derivatives Exchange, Derivatives Markets, ftx, FTX Exchange, Futures, Futures Exchange, Grandcapital, Joseph Jenan, Options Exchange, Robomarkets, Saxo Bank Interactive Brokers, TDAmeritrade, Terry Duffy, Trading

What do you think about CME Group going head-to-head with FTX by applying for forward commission trader status? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for News about the disruptive protocols emerging today.

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