DEFA14A: CME Group Board of Directors Election: Candidates Vie for Shareholder Support

Several candidates are seeking election to the CME Group Board of Directors, outlining their qualifications, experience, and goals for the exchange's future.

Summary

• This document contains statements from candidates running for positions on the CME Group Board of Directors.
• The candidates represent different classes of shareholders (B-1, B-2, B-3) and highlight their experience in trading, risk management, and advocacy for CME Group members.
• Will Hobert emphasizes his experience in adapting to technological changes in the trading industry and his advocacy in Washington, D.C.
• Patrick J Mulchrone highlights CME Group's record growth and its position to benefit from interest rate volatility and inflation.
• Robert J. Tierney points to the opportunities arising from volatility and uncertainty, as well as CME Group's innovation in new products and capital efficiencies, noting that RV Curve trading increased by nearly 50% in 2024 to $2.2 billion ADV.
• Patrick W. Maloney focuses on maintaining competitive clearing fees, supporting market participation in crypto and retail trade, and understanding the interests of CME Group's client base.
• Elizabeth A. Cook highlights CME Group's record ADV of 26.5 million contracts in 2024, a 9% year-over-year increase, and the strategic partnership with Google Cloud.

Sentiment

Score: 8

Explanation: The document presents a positive outlook for CME Group, highlighting its growth, innovation, and strategic initiatives. The candidates express confidence in the company's future and their ability to contribute to its success.

Positives

• CME Group is experiencing record growth.
• CME Group is well-positioned to benefit from interest rate volatility and inflation.
• CME Group is innovating with new products and services.
• CME Group offers unmatched capital efficiencies with average daily margin savings of approximately $60 billion.
• CME Group has a strong advocacy presence in Washington, D.C.
• CME Group's partnership with Google Cloud will expand access to new products and create real-time data analytics.

Risks

• The advancement of technology and the evolution of the financial markets is a never-ending process and in the future ones ability to adapt to changes, some of which we cannot currently predict, will dictate survival and success.
• Global political uncertainty could create an environment of increased market volatility.

Future Outlook

CME Group is focused on innovation, new product development, and maintaining a competitive cost structure in the global marketplace.

Management Comments

• Will Hobert: 'I know what it takes to survive and thrive amidst change, and as a CME Group Board member, I will tirelessly work to ensure that the Exchange and its members are best prepared for the next systemic change.'
• Patrick J Mulchrone: 'I believe that a rising tide lifts all boats and if myself and my fellow Board members continue to advocate for our market participants, we will continue to grow and create value for all.'
• Robert J. Tierney: 'The volatility and uncertainty in 2024 and into 2025 have been and continue to be very opportunistic for CME Group as clients consistently turn to us to manage their risk.'
• Patrick Maloney: 'Vote for Pat Maloney because we share a collective interest in the success of CME Group, providing valuable tools and services to help you manage your risk in this environment and your voice deserves to be heard!'
• Elizabeth A. Cook: 'I will continue to focus on the board areas where I have made my greatest contributions: Promoting new product development such as the SOFR and Crypto currency line of products, Keeping a trained and watchful eye on exchange fees and costs to stay competitive in the global marketplace, Overseeing CME Groups financial reporting and disclosures as a member of the Boards Audit Committee.'

Industry Context

The candidates acknowledge the dynamic nature of the trading industry, driven by technology and global market forces, and emphasize the importance of adapting to change and maintaining a competitive edge.

Comparison to Industry Standards

• CME Group's focus on SOFR and cryptocurrency products aligns with the industry's move towards embracing new asset classes and technologies.
• The emphasis on capital efficiencies and margin savings reflects the ongoing pressure on market participants to optimize their trading operations.
• The BrokerTec platform competes with other electronic trading platforms for U.S. Treasury securities, such as those offered by Tradeweb and Bloomberg.
• The growth in micro products mirrors a broader trend of exchanges seeking to attract retail investors to futures markets, similar to efforts by other exchanges like ICE and Eurex.

Stakeholder Impact

• Shareholders will be impacted by the election of directors and the strategic direction of the company.
• Market participants will benefit from CME Group's continued innovation and efforts to maintain a competitive marketplace.
• Employees will be affected by the company's growth and strategic partnerships.

Next Steps

• Shareholders are urged to review the proxy materials and vote in the election of directors.
• CME Group will launch a BrokerTec U.S. Treasury Order Book in Chicago in Q3 2025.

Key Dates

Keywords

CME Group, Board of Directors, Election, Shareholders, Trading, Risk Management, Volatility, Innovation, Advocacy, Technology, SOFR, Crypto, BrokerTec, RV Curve