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CME Technology Upgrades and Product Enhancements

Issued by CME on January 10, 2008

Yesterday, CME Group announced technology and interest rate product enhancements designed to create a more liquid, efficient, and competitive marketplace for market participants worldwide. The enhancements, described below and in further detail in our news release, are scheduled to be implemented this quarter:
  • CME Globex will be upgraded to significantly reduce message response time, already among the fastest in the industry. During testing, under a replay of peak market conditions, the upgraded CME Globex platform demonstrated over a 50 percent reduction in response time for all futures contracts.

  • Beginning March 3, pending CFTC approval, we will reduce the minimum tick size in selected U.S. Treasury contracts. These changes are very similar to those already implemented in 10-Year U.S. Treasury Note futures which have helped to produce deeper liquidity and increased volumes in that product. The reduced tick size will help CME Group markets compete with cash Treasury markets in these specific areas:

    • 30-Year U.S. Treasury Bond futures from 1/32nd to ½ of 1/32nd ($15.625)

    • 5-Year U.S. Treasury Note futures from ½ of 1/32nd to ¼ of 1/32nd ($7.8125)

    • 5-Year U.S. Treasury Note options from 1/64th to ½ of 1/64th ($7.8125)

  • Beginning February 4, also subject to CFTC approval, we will begin allowing block trades for most CBOT interest rate products. This enhancement, based on customer feedback, will help harmonize trading rules between CME and CBOT, and will also better facilitate execution of large transactions by both cash and futures market participants. We have adopted these limited block trading rules to both expand execution alternatives for very large orders and enhance the competitiveness of these markets, while at the same time, maintaining our commitment to competitive auction market executions and the price discovery function.

    Block trading for CBOT interest rate products, which is already allowed for Interest Rate Swap contracts, will be extended to CBOT U.S. Treasury and Fed Fund futures and options on futures, and will be subject to minimum threshold and reporting requirements. Please follow this link for further details on the new block trading rules for CBOT interest rate products

As you know, we also are moving forward with the migration of e-cbot products to CME Globex, with agricultural and equity products migrating this weekend and interest rate products migrating on January 27. Our focus continues to be on delivering tangible benefits of our merger – including new trading opportunities and cost efficiencies – to you, our valued members and customers.
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