8-KMaterial Agreements

CME GROUP INC. 8-K Report, Material Agreement (May 9, 2006)

Filed May 9, 2006For Securities:CME

Summary

CME Group Inc. (CME) has announced a significant strategic move through a definitive shareholders' agreement entered into on May 4, 2006, to establish a joint venture named FXMarketSpace Limited with Reuters Group PLC. This joint venture is designed to create and operate an electronic trading system and platform for the execution and central clearing of certain foreign exchange products. Each company will hold a 50% ownership stake and commit up to $45 million in capital contributions. The formation of FXMarketSpace is contingent upon regulatory and shareholder approvals, with expected authorization from the U.K. Financial Services Authority by early 2007. This venture signifies CME's expansion into the FX market and involves exclusivity clauses that restrict both CME and Reuters from participating in or providing services to competing FX trading systems during the term of the agreement and for a period thereafter.

Key Highlights

  • 1CME Group Inc. (CME) is forming a 50/50 joint venture, FXMarketSpace Limited, with Reuters Group PLC.
  • 2The joint venture aims to establish an electronic trading system and platform for foreign exchange (FX) products.
  • 3Each partner will contribute up to $45 million in capital.
  • 4The formation of FXMarketSpace is subject to regulatory and shareholder approvals, with expected U.K. FSA authorization by early 2007.
  • 5Both CME and Reuters are restricted from operating or supporting competing FX trading systems during and for a period after the venture's term.
  • 6This agreement marks CME's strategic entry into the foreign exchange trading market.
  • 7The agreement was finalized on May 4, 2006, and announced via press release on the same date.

Frequently Asked Questions

The primary purpose of FXMarketSpace Limited is to establish and operate an electronic trading system and platform for the execution and central clearing of certain foreign exchange (FX) products.

CME Group will hold a 50% ownership interest in FXMarketSpace and is required to make capital contributions of up to an aggregate amount of $45 million, subject to certain conditions.

The formation of FXMarketSpace is subject to several conditions, including certain regulatory and shareholder approvals. Authorization from the U.K. Financial Services Authority is anticipated by early 2007.

Yes, during the term of the agreement and for a certain period after termination, CME and Reuters are generally prohibited from participating in, providing clearing services for, or offering trading access to any competing electronic FX trading systems or platforms. There are also limited restrictions on offering functionally equivalent products to those of FXMarketSpace.