In order to attract more participation in its markets and reduce transaction costs for existing clearing members, Chicago Mercantile Exchange Holdings Inc. will reduce the requisite number of CME Class A Shares its clearing members must acquire and hold as part of their capital investment requirement.
New firms applying for clearing member status will be required to acquire 15,000 shares of CME Class A stock, down from the previous requirement of 30,000 shares, effective February 1.
“This change to the capital investment requirement is part of our ongoing global strategy to look for ways to reduce transaction costs and increase capital efficiencies for CME clearing firms,” said Terry Duffy, CME chairman. “This plan releases approximately $6 million in additional equity capital over time for each of our current clearing firms and further implements our commitment to reduce transaction costs and increase capital efficiencies.”
Approximately 240,000 shares will be released each month as a result, less than the average volume of CME stock traded in a single day. In the fourth quarter of 2005, CME shares traded an average of approximately 850,000 shares per day.
For existing CME clearing firms on or before February 1, 2006, the number of Class A shares that must be assigned to the clearing member shall be decreased incrementally by 3,000 shares per month over a five-month period.