CME Group's Duffy to Appear Before House Financial Services Subcommittees to Discuss Impact of Proposed Rules to Implement Basel

 CME Group's Duffy to Appear Before House Financial Services Subcommittees to
  Discuss Impact of Proposed Rules to Implement Basel III Capital Standards

PR Newswire

CHICAGO, Nov. 28, 2012

CHICAGO, Nov. 28, 2012 /PRNewswire/ -- CME Group Executive Chairman and
President Terry Duffy will appear before the House Financial Services
Subcommittees on Financial Institutions and Consumer Credit, and Insurance,
Housing and Community Opportunity, Thursday, November 29, to discuss
"Examining the Impact of the Proposed Rules to Implement Basel III Capital
Standards."

"CME Group's concern is that Basel III's 'one size fits all' rules for capital
charges based on the risk of cleared derivatives is at odds with the
objectives of Dodd-Frank and the G-20 mandates, which aim to reduce systemic
risk and increase transparency," said Duffy in prepared testimony before the
House subcommittees. "If clearing houses properly set margins for liquid
derivatives to cover one or two day risk while banking regulators impose a
capital charge based on five days, banks and ultimately their customers will
be burdened with increased costs from unwarranted capital requirements. This
may eliminate an incentive to trade liquid exchange-traded derivatives instead
of other derivatives products with higher risk profiles."

"The capital rules should be replaced with an approach consistent with
standards recognizing that margin levels will differ based on the liquidity,
transparency and other risk-reducing characteristics of each product," Duffy
added.

CME Group also joined the World Federation of Exchanges (WFE) and 11 other
exchanges in submitting letters to international regulators calling for them
to modify capital standards for exchange traded derivatives to appropriately
reflect the liquidity and efficiency of exchange traded derivative markets. In
the letters the exchanges said that the BCBS Interim Capital Framework should
be amended to modify the 5-day capital charge for clearing members using
exchange-traded derivatives and replace it with a standard consistent with
IOSCO's Principles for Financial Market Infrastructures (PFMI) which are based
on the risk profile, transparency and other characteristics of the product.
Any alternative could result in inconsistent national outcomes and work
against the G-20 objectives to promote adherence to international accords and
further international harmonization.

The House Financial Services joint subcommittee hearing is scheduled for 10
a.m. Eastern time  in the Rayburn House Office Building. Duffy's written
testimony is available on www.cmegroup.com.

As the world's leading and most diverse derivatives marketplace, CME Group
(www.cmegroup.com) is where the world comes to manage risk. CME Group
exchanges offer the widest range of global benchmark products across all major
asset classes, including futures and options based on interest rates, equity
indexes, foreign exchange, energy, agricultural commodities, metals, weather
and real estate.CME Group brings buyers and sellers together through its CME
Globex^® electronic trading platform and its trading facilities in New York
and Chicago. CME Group also operates CME Clearing, one of the world's leading
central counterparty clearing providers, which offers clearing and settlement
services across asset classes for exchange-traded contracts and
over-the-counter derivatives transactions. These products and services ensure
that businesses everywhere can substantially mitigate counterparty credit
risk.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and
Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange
Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade
of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and
ClearPort are registered trademarks of New York Mercantile Exchange, Inc.
COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the
property of their respective owners. Further information about CME Group
(NASDAQ: CME) and its products can be found at www.cmegroup.com.

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CME-G



SOURCE CME Group

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