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CME Group to Face off With FTX After Filing for Futures Commission Merchant Status – Finance Bitcoin News


According to a recent report, the world’s largest derivatives exchange CME Group is looking to register as a direct futures (FCM) commission trader. CME Group’s decision follows digital currency exchange FTX, as the crypto company registers as a derivatives clearing organization and is awaiting approval from the Commodity Futures Trading Commission. of the United States (CFTC). If CME Group is approved to become FCM, the company can bypass third-party brokers and offer futures contracts directly on the CME platform.

CME Derivatives Exchange Group Registers for FCM While FTX Waits for CFTC Approval

The world’s largest financial derivatives exchange, CME . Groupis said to have filed the paperwork to become a futures commission seller (FCM), under a report published by the Wall Street Journal (WSJ). The author of the WSJ, Alexander Osipovich, explained that CME filed an application in August and that Osipovich thinks the company is “consulting from [the] crypto rival FTX. “

If CME Group’s FCM registration is approved, CME will be able to offer derivatives directly without the need for brokers such as TDAmeritrade, Saxo Bank Interactive Brokers, Robomarkets and Grandcapital. FTX is awaiting CFTC approval to become a derivatives clearing organization. Last March, the CFTC opened public comments to gain insight into the FTX proposal. In mid-May, CME Group President and CEO Terry Duffy Written that the move by FTX could cause “market risk”.

“The FTX proposal is clearly flawed and posed [a] Duffy said at the time there was a significant risk to the stability of the market and to market participants. “FTX proposes implementing a ‘risk management light’ clearinghouse that will significantly increase market risk by potentially removing up to $170 billion in loss-absorbing capital from the derivatives market were removed, the standard credit checks were removed, and the risk management incentives were removed by limiting capital requirements and mutual risk. “

The report written by Osipovich details that Advantage Futures president and chief executive officer, Joseph Guinan, says the move could be dramatic. “I don’t expect CME to go down a path where they compete directly with FCM for customers,” commented Guinan. “However, if they go down this path, it will be a game changer for the FCM industry and a big concern for every FCM.”

While the CFTC weighed in on the FTX proposal, Osipovich cited Craig Pirrong, a finance professor at the University of Houston, as saying that the CME’s FCM decision was a response to the FTX scheme. “From a philosophical perspective, they don’t want to do this,” Pirrong said on Sept. 30. “But in the event that the CFTC approves the FTX model, from a competitive perspective, they may feel that they have to. this. “

Osipovich also published commentary from a spokesperson for CME Group, who commented on CME’s August submission of the FCM filing. “Our commitment to the FCM model and the significant risk management benefits it brings to all industry participants remains unchanged,” said a CME Group representative. About bitcoin (BTC) the volume of futures contracts, FTX and CME Group have relatively the same amount open interest bitcoin futures contract and BTC Futures Trading Volume also.

Cards in this story

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What do you think CME Group will face FTX by registering as futures commission trader? Let us know your thoughts on this topic in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a fintech journalist living in Florida. Redman has been an active member of the crypto community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written over 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




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