What is the S&P-GSCI Excess Return Index and why is it important for CME?

The S&P-GSCI Excess Return Index is a well-known benchmark for commodity investments. By obtaining a license to use it, CME can leverage this established index to clear, market, and promote its Cleared OTC Swaps, potentially attracting more business and enhancing the appeal of its products.

What are the financial implications of this agreement for CME?

The primary financial implication mentioned is that CME will pay an annual fee to S&P for the license. The exact amount of this fee is not disclosed in this 8-K, but it represents a cost associated with expanding their OTC derivatives offerings.

How does this agreement relate to CME's strategy in the derivatives market?

This agreement signifies CME's strategic effort to expand its presence and offerings in the Over-the-Counter (OTC) derivatives market, particularly with Cleared OTC Swaps. By integrating a recognized index like the S&P-GSCI, CME aims to make its products more attractive and competitive.

CME 8-K: Material Agreements

Q: What is the main purpose of this 8-K filing?

This 8-K filing announces CME Group Inc.'s entry into a material definitive agreement, specifically an amendment to a license agreement with Standard & Poor's Financial Services LLC (S&P). This amendment allows CME to use the S&P-GSCI Excess Return Index for its Cleared OTC Swaps business.

Summary

CME Group Inc. (CME) has filed an 8-K report detailing a material definitive agreement. Specifically, on March 2, 2009, CME, through its subsidiary Chicago Mercantile Exchange Inc., entered into an amendment to its existing license agreement with Standard & Poor's Financial Services LLC (S&P). This amendment grants CME the right to utilize the S&P-GSCI Excess Return Index for the clearing, marketing, and promotion of Cleared Over-the-Counter (OTC) Swaps. This strategic move allows CME to expand its product offerings and leverage a well-recognized index in the commodities space for its OTC swap business. The agreement involves an annual fee paid to S&P as consideration for the license. Investors should note this as a step to enhance CME's competitive position in the derivatives market, particularly in the growing OTC segment.

Key Highlights

1CME Group Inc. entered into a material definitive agreement on March 2, 2009.
2The agreement is an amendment (Amendment No. 6) to an existing License Agreement with Standard & Poor’s Financial Services LLC (S&P).
3The amendment grants CME the license to use the S&P-GSCI Excess Return Index.
4The S&P-GSCI Excess Return Index will be used in connection with clearing, marketing, and promoting Cleared OTC Swaps.
5CME will also have the ability to use related references to the S&P-GSCI Excess Return Index.
6An annual fee will be paid to S&P as consideration for this license.
7The amendment is expected to be filed in CME's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.

CME GROUP INC. 8-K Report, Material Agreement (Mar 6, 2009)

Summary

Key Highlights

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