Summary
CME Group Inc. (CME), through its wholly-owned subsidiary Board of Trade of the City of Chicago, Inc. (CBOT), has entered into a significant new index license agreement with Dow Jones & Company, Inc. This agreement, effective September 11, 2007, grants CBOT the rights to use several key Dow Jones stock indexes, including the Dow Jones Industrial Average, Dow Jones Transportation Average, and Dow Jones Utility Average, on an exclusive basis. The license also includes non-exclusive rights for the Dow Jones U.S. Real Estate Index. This strategic move positions CME Group to create, market, and trade futures and options contracts based on these widely recognized indexes. The agreement is set to commence on January 1, 2008, succeeding an existing agreement that expires at the end of 2007. The pact includes a seven-year initial term with renewal options, a guaranteed minimum annual fee, and an upfront payment, indicating a substantial financial commitment and a long-term outlook for expanding its product offerings.
Key Highlights
- 1CME Group Inc.'s subsidiary, CBOT, has secured an index license agreement with Dow Jones & Company, Inc.
- 2The agreement grants CBOT the exclusive rights to license and trade futures and options on key Dow Jones stock indexes, including the Dow Jones Industrial Average.
- 3The new license, effective January 1, 2008, replaces an existing agreement and runs for an initial term of seven years.
- 4CBOT also has a right of first refusal for new Dow Jones indexes developed before the end of 2010.
- 5The agreement includes provisions for termination under specific circumstances, such as material breach or regulatory issues.
- 6Financial terms include a per-trade fee, guaranteed annual minimum license fee, and an upfront payment.