tl;dr
The recent approval for CME Group to establish its own Futures Commission Merchant (FCM) has raised concerns within the industry. The Financial Industry Association (FIA) is worried about potential systemic risks and has urged the Commodity Futures Trading Commission (CFTC) to address conflicts aris...
FIA voices concerns about CME Group's FCM approval and potential systemic risks
The recent approval for CME Group to establish its own Futures Commission Merchant (FCM) has raised concerns within the industry. The Financial Industry Association (FIA) is worried about potential systemic risks and has urged the Commodity Futures Trading Commission (CFTC) to address conflicts arising from CME's expanded market role. FIA President Walt Lukken emphasized the risks of market consolidation and conflicts of interest, particularly in sensitive financial markets.
CME Group strategically expands operations with NFA-approved FCM model
CME Group, whose activities are primarily associated with the derivatives market, received the approval of the National Futures Association (NFA) to create an FCM, thus strengthening its presence in the global financial environment. CME Group’s CEO, Terry Duffy, noted that the FCM model helps the company to be more sensitive to the clients’ needs, as the market changes. The company is involved in futures and options, as well as over-the-counter transactions, and offers products across several asset types, including equities, foreign exchange, and commodities.
FIA urges CFTC to address conflicts of interest in vertically integrated financial companies like CME
The FIA has called for immediate CFTC rulemaking to prevent conflicts of interest in vertically integrated financial companies like CME. Despite concerns, CME Group has reported strong financial performance and investor trust, with significant increases in trading volumes and revenue.
FIA’S CONCERNS ON MARKET CONSOLIDATION RISKS
The FIA raised the issue of heightened risks due to market consolidation within CME’s operations. According to FIA President Walt Lukken, the approval represents a trend in the financial industry where single organizations manage multiple functions, including trading, clearing, and intermediation. Lukken emphasized that “the approval of CME’s FCM application is the latest and most notable instance of a concerning market structure.”
CME’S EXPANSION AND STRATEGIC ADAPTATION
The FCM approval is in sync with CME’s strategy of offering a full spectrum of products and services to expand its market base and cater to the needs of both the retail as well as institutional clients. The group’s most recent financial results are encouraging as the third quarter of 2024 set new performance standards in terms of trading volumes, bolstered by rising interest rate transactions and institutional activity.
FIA CALLS FOR IMMEDIATE CFTC RULEMAKING
To this, the FIA has proposed to the Commodity Futures Trading Commission to put in place rules to deal with conflicts of interest in vertically integrated financial companies such as CME. The organization has recommended that more stringent measures be taken to prevent any conflicts of interest that may emerge in the process of providing the service, in order to protect the integrity of the market.
More about Interlink Electronics Inc
Interlink Electronics Inc Summary Interlink Electronics Inc
Interlink Electronics, Inc. designs, develops, manufactures, and sells force sensing technologies that incorporate proprietary material technology, firmware, and software into standard sensor-based products and custom sensor system solutions. The company is headquartered in Irvine, California.
Industry and Sector
Technology, Computer Peripheral Equipment
Stock Information
Company: Interlink Electronics Inc
Stock Symbol: NEC
Industry Code: 50801000
Opening Price: -0.21
Closing Price: 1.282
Change: -0.128
Volume: 12635000
Day Low: 7
Day High: 21.01
Change Percentage: -0.284
More about United States Steel Corporation
United States Steel Corporation produces and sells tubular and flat rolled steel products primarily in North America and Europe. The company is headquartered in Pittsburgh, Pennsylvania.
Industry: Manufacturing
Sub-Industry: Steel Works, Blast Furnaces & Rolling Mills (Coke Ovens)
Revenue: 8.645 billion
EPS: 16.78
PE Ratio: 0.2
ROE: 2.29%
Market Cap: 7.531 billion
Beta: 0.034
Shares Outstanding: 1.685 billion
Previous Close: 41.87
Change: -0.617
Change (%): -0.178%