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What changed in CME Group's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CME Group's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+353 added−354 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in CME Group's 2024 10-K

353 paragraphs added · 354 removed · 293 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

104 edited+36 added−23 removed53 unchanged
Biggest changeIt facilitates trading for banks and non-bank professional trading firms. The BrokerTec Central Limit Order Book is a dealer-to-dealer electronic trading platform operated on CME Globex. BrokerTec Quote is a Request For Quote platform provided on third party technology, that offers a dealer-to-client trading solution for the European, U.K. and U.S. government repo markets.
Biggest changeTreasuries, European Government Bonds, and Repo on European Union (E.U.), United Kingdom (U.K.), U.S. and other international G10, emerging market fixed income instruments and Supranational and Agency Bonds. It facilitates trading for banks and non-bank professional trading firms. The BrokerTec Central Limit Order Book is a dealer-to-dealer electronic trading platform operated on CME Globex.
Our principal executive offices are located at 20 South Wacker Drive, Chicago, Illinois 60606, our telephone number is 312-930-1000 and our website is cmegroup.com . DESCRIPTION OF BUSINESS CME Group exchanges offer the widest range of global benchmark products across interest rates, equity indexes, foreign exchange (FX), agricultural commodities, energy and metals.
Our principal executive offices are located at 20 South Wacker Drive, Chicago, Illinois 60606, our telephone number is 312-930-1000 and our website is cmegroup.com . DESCRIPTION OF BUSINESS CME Group exchanges offer the widest range of global benchmark products across interest rates, equity indexes, foreign exchange (FX), and agricultural, energy and metals commodities.
The FX and Metals Market Profile Tools on Quant Analytics offer simple, but effective methods for clients to compare and contrast our leading FX and metals products and liquidity pools side-by-side, which in turn enables clients to analyze their opportunity to minimize costs and achieve best execution by accessing highly complementary liquidity pools across cash and futures markets.
The FX and Metals Market Profile Tools on Quant Analytics offer simple and effective methods for clients to compare and contrast our leading FX and metals products and liquidity pools side-by-side, which in turn enables clients to analyze their opportunity to minimize costs and achieve best execution by accessing highly complementary liquidity pools across cash and futures markets.
We also offer cash and repo fixed income trading via BrokerTec, and cash and OTC FX trading via EBS. Additionally, we operate one of the world’s leading central counterparty clearing providers. Derivatives Exchange Business: Through our derivatives exchanges and clearing house, we believe our customers prefer CME Group's diversity of products, liquidity, price transparency and technological capabilities.
We also offer cash and repo fixed income trading via BrokerTec, and spot and OTC FX trading via EBS. Additionally, we operate one of the world’s leading central counterparty clearing providers. Derivatives Exchange Business: Through our derivatives exchanges and clearing house, we believe our customers prefer CME Group's diversity of products, liquidity, price transparency and technological capabilities.
Upon the occurrence of certain events, including certain terminations of the joint venture, the term may be extended up to an additional ten years. In connection with S&P Dow Jones Indices, we also have an exclusive license agreement (Dow Jones License Agreement) for certain Dow Jones indexes. The initial term of the agreement is through June 30, 2026.
Upon the occurrence of certain events, including certain terminations of the joint venture, the term may be extended up to an additional ten years. In connection with S&P Dow Jones Indices, we also have an exclusive license agreement (Dow Jones License Agreement) for certain Dow Jones indices. The initial term of the agreement is through June 30, 2026.
The partnership will focus on expanding access to CME Group’s infrastructure, advancing real-time data and analytics capabilities, co-innovating new products and services, increasing efficiencies and driving resiliency in the financial markets’ ecosystem. In 2022, we built our cloud instance on the Google Cloud platform.
The partnership will focus on expanding access to CME Group’s infrastructure, advancing real-time data and analytics capabilities, co-innovating new products and services, increasing efficiencies and driving resiliency in the financial markets’ ecosystem. In 2022, we built our cloud instance on the CME Group Google Cloud platform.
In connection with S&P Dow Jones Indices, we have a license agreement (S&P License Agreement) for certain S&P stock indexes and related trade names, trademarks and service marks in connection with the creation, marketing, trading, clearing and promoting of futures contracts and/or options on futures contracts that are indexed to certain S&P stock indexes.
In connection with S&P Dow Jones Indices, we have a license agreement (S&P License Agreement) for certain S&P stock indices and related trade names, trademarks and service marks in connection with the creation, marketing, trading, clearing and promoting of futures contracts and/or options on futures contracts that are indexed to certain S&P stock indices.
The settlement of matched principal and exchange-traded businesses requires access to clearing houses either directly or through third-party providers of clearing and settlement services. BrokerTec Americas is a member of the Fixed Income Clearing Corporation, through which it clears U.S. Treasury and repo products.
The settlement of matched principal and exchange-traded businesses requires access to clearing houses either directly or through third-party providers of clearing and settlement services. BrokerTec Americas is a member of the Fixed Income Clearing Corporation (FICC), through which it clears U.S. Treasury and repo products.
Regulations on Benchmarks have yet to come into effect, as the E.U. has extended transitional periods until the end of 2025, and has proposed further legislative changes to apply from 2025 onwards.
Regulations on Benchmarks have yet to come into effect, as the E.U. has extended transitional periods until the end of 2025, and has proposed further legislative changes to apply from 2026 onwards.
CME Group provides various tools and services to assist customers with capital and operational efficiencies, including: • CME Clearing provides compression via coupon blending as well as CME CORE, an interactive margin calculator that enables clients to optimize their capital by providing insights on margin requirements prior to trading. • Portfolio margining allows firms to capitalize on margin offsets between futures, options and cleared OTC instruments with common risk factors.
CME Group provides various tools and services to assist customers with capital and operational efficiencies, including: • CME Clearing provides compression via coupon blending as well as CME CORE (Clearing Online Risk Engine), an interactive margin calculator that enables clients to optimize their capital by providing insights on margin requirements prior to trading. • Portfolio margining allows firms to capitalize on margin offsets between futures, options and cleared OTC instruments with common risk factors.
In addition, we cannot guarantee that others will not succeed in creating stock index futures based on information similar to that which we own or have obtained by license, or that market participants will not increasingly use other instruments, including securities and options based on the S&P, Dow Jones, Nasdaq or FTSE Russell indexes, to manage or speculate on U.S. stock risks or clients to select another interest rate alternative.
In addition, we cannot guarantee that others will not succeed in creating stock index futures based on information similar to that which we own or have obtained by license, or that market participants will not increasingly use other instruments, including securities and options based on the S&P, Dow Jones, Nasdaq or FTSE Russell indices, to manage or speculate on U.S. stock risks or that clients select another interest rate alternative.
CME Group is also the distributor of leading benchmark equity and commodity indices on behalf of third parties, as well as a distributor and licensor of our own proprietary benchmarks and indices, including CME Term SOFR Reference Rates (CME Term SOFR), which are designed to adhere to the IOSCO Principles for Financial Benchmarks and are administered by our U.K. regulated subsidiary, CME Benchmark Administration Limited.
CME Group is also the distributor of leading benchmark equity and commodity indices on behalf of third parties, as well as a distributor and licensor of our own proprietary benchmarks and indices, including CME Term SOFR Reference Rates (CME Term SOFR) and Term €STR Reference Rates, which adhere to the IOSCO Principles for Financial Benchmarks and are administered by our U.K. regulated subsidiary, CME Benchmark Administration Limited.
CME Group products are traded primarily through CME Globex, as well as by open outcry in Chicago for SOFR options (and previously, Eurodollar options) and through privately negotiated transactions. We strive to provide the most flexible and scalable platforms to support the operational and capacity needs of our business along with the delivery of innovative technology solutions to the marketplace.
CME Group products are traded primarily through CME Globex, as well as by open outcry in Chicago for SOFR options and through privately negotiated transactions. We strive to provide the most flexible and scalable platforms to support the operational and capacity needs of our business along with the delivery of innovative technology solutions to the marketplace.
Our penetration of these markets lags our development in the U.S., and we believe that there is room for significant growth and development of these financial markets.
Our penetration of these markets lags our development in the U.S., and we believe that there is room for significant growth and development of these financial market s.
Competition The industry in which we operate is highly competitive and has seen multiple new entrants over time, and we expect competition to continue to intensify and become more global, especially in light of changes in the financial services industry driven by regulatory reforms such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), European Market Infrastructure Regulation (EMIR), EMIR 2.2, Markets in Financial Instruments Directive II (MiFID II), Capital Requirements Directive IV, Market Abuse Regulation, Benchmarks Regulation, Basel III and various other laws and regulations.
Competition The industry in which we operate is highly competitive and has seen multiple new entrants over time, and we expect competition to continue to intensify and become more global, especially in light of changes in the financial services industry driven by regulatory reforms such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), European Market Infrastructure Regulation (EMIR), EMIR 3.0, Markets in Financial Instruments Directive II (MiFID II), Capital Requirements Directive IV, Market Abuse Regulation, Benchmarks Regulation, Basel III and various other laws and regulations.
CME Clearing marks open positions to market at least twice a trading day, requiring payments from clearing firms whose positions have lost value and making payments to clearing firms whose positions have gained value. For select cleared-only markets, positions are marked-to-market daily, with the capacity to mark-to-market more frequently as market conditions warrant.
The clearing house marks open positions to market at least twice a trading day, requiring payments from clearing firms whose positions have lost value and making payments to clearing firms whose positions have gained value. For select cleared-only markets, positions are marked-to-market daily, with the capacity to mark-to-market more frequently as market conditions warrant.
In the event there is no open interest in any such products, then we may terminate the agreement. We also have an exclusive license agreement for certain Nasdaq indexes through 2029. In 2015, we entered into an exclusive license agreement with FTSE Russell and launched the E-mini Russell 2000 futures in 2017.
In the event there is no open interest in any such products, then we may terminate the agreement. We also have an exclusive license agreement for certain Nasdaq indices through 2029. In 2015, we entered into an exclusive license agreement with FTSE Russell and launched the E-mini Russell 2000 futures in 2017.
She previously served as Deputy Chief Financial Officer since 2022 and Managing Director of Corporate Development and Treasurer of CME Group since 2017. Since joining the company in 2006, Ms. Fitzpatrick has held a variety of positions with increasing levels of responsibility within the finance organization.
She previously served as Chief Financial Officer since April 2023, Deputy Chief Financial Officer since 2022 and Managing Director of Corporate Development and Treasurer of CME Group since 2017. Since joining the company in 2006, Ms. Fitzpatrick has held a variety of positions with increasing levels of responsibility within the finance organization.
Following the initial term, the Dow Jones License Agreement will automatically renew for renewal terms of five years thereafter, so long as there is open interest in any of CBOT’s or its affiliates’ products based on one or more of the Dow Jones licensed indexes.
Following the initial term, the Dow Jones License Agreement will automatically renew for renewal terms of five years thereafter, so long as there is open interest in any of CBOT’s or its affiliates’ products based on one or more of the Dow Jones licensed indices.
Competition in our Derivatives Exchange Business We believe competition in the derivatives business is based on a number of factors, including, among others: • brand and reputation; • efficient and secure clearing, settlement and support services; • depth and liquidity of markets; • capital efficiencies; • diversity of product offerings and frequency and quality of new product development and innovative services; • ability to position and expand upon existing products to address changing market needs; • efficient and seamless customer experience; • transparency, reliability, anonymity and security in transaction processing; • regulatory environment; • connectivity, accessibility, flexibility in execution methods and distribution; • technological capability and innovation; and • overall transaction costs.
Competition in our Derivatives Exchange Business We believe competition in the derivatives business is based on a number of factors, including, among others: • brand and reputation; • efficient and secure clearing, settlement and support services; • depth and liquidity of markets; • capital and margin efficiencies; • diversity of product offerings and frequency and quality of new product development and innovative services; • ability to position and expand upon existing products to address changing market needs; • efficient and seamless customer experience; • transparency, reliability, anonymity and security in transaction processing; • regulatory environment; 10 Table of Contents • connectivity, accessibility, flexibility in execution methods and distribution; • technological capability and innovation; and • overall transaction costs.
CME FX Spot+ an all-to-all spot FX marketplace that will connect liquidity between two trading environments, whereby spot FX participants will have expanded access to CME FX futures liquidity in OTC spot terms within an open, transparent, central limit order book environment, while FX futures market users will see expanded access to OTC FX liquidity.
CME FX Spot+ is an all-to-all spot FX marketplace that will connect liquidity between two trading environments, whereby spot FX participants will have expanded access to CME FX futures liquidity in OTC spot terms within an open, transparent, central limit order book environment, while FX futures market users will have expanded access to OTC FX liquidity.
We maintain comprehensive business continuity and disaster recovery plans and facilities designed to provide nearly continuous availability of our markets in the event of a business disruption or disaster. We also maintain incident and crisis management plans that address responses to disruptive events.
We maintain comprehensive business continuity and disaster recovery plans, as well as facilities designed to provide nearly continuous availability of our markets in the event of a business disruption or disaster. We also maintain incident and crisis management plans that address responses to disruptive events.
We believe that in order to maintain our competitive position, we must continue to expand globally; develop and offer new and innovative products; enhance our technology infrastructure, including its reliability, functionality and security; maintain liquidity and low transaction costs; continue to strengthen our risk management 10 Table of Contents capabilities and solutions; and implement customer protections designed to ensure the integrity of our market and the confidence of our customers.
We believe that in order to maintain our competitive position, we must continue to expand globally; develop and offer new and innovative products; enhance our technology infrastructure, including its reliability, functionality and security; maintain liquidity and low transaction costs; continue to strengthen our risk management capabilities and solutions; and implement customer protections designed to ensure the integrity of our market and the confidence of our customers.
The SEC also maintains an Internet site that contains reports, proxy and information statements, and other reports that we file or furnish with the SEC at http:// 15 Table of Contents www.sec.gov. Copies of these materials also are available to shareholders free of charge upon request to Shareholder Relations, officeofthesecretary@cmegroup.com.
The SEC also maintains an Internet site that contains reports, proxy and information statements, and other reports that we file or furnish with the SEC at http://www.sec.gov. Copies of these materials also are available to shareholders free of charge upon request to Shareholder Relations, officeofthesecretary@cmegroup.com.
Those copyrights, some of which are registered, include printed and online publications, websites, advertisements, educational materials, graphic presentations and other literature, both textual and electronic. We protect our intellectual property rights by relying on trademarks, patents, copyrights, database rights, trade secrets, restrictions on disclosure and other methods.
Those copyrights, some of which are registered, include printed and online publications, websites, advertisements, educational materials, graphic presentations and other literature, both textual and electronic. We protect our 9 Table of Contents intellectual property rights by relying on trademarks, patents, copyrights, database rights, trade secrets, restrictions on disclosure and other methods.
We also provide the functionality to connect to CME Direct on a mobile device through our CME Direct Mobile application with full trading and on-the-go order management capabilities. 5 Table of Contents Together, our platforms offer: • certainty of execution; • extensive capabilities to facilitate complex and demanding trading; • direct market access; • open access, price transparency and anonymity; • convenience and efficiency; • connectivity through highly secure, resilient and low-latency network options; • access to market data; and • global distribution, including connectivity through high-speed international telecommunications hubs in key financial centers or order routing to our global partner exchanges.
We also provide the functionality to connect to CME Direct on a mobile device through our CME Direct Mobile application with full trading and on-the-go order management capabilities. 5 Table of Contents Together, our platforms offer: • certainty and flexibility of execution; • extensive capabilities to facilitate complex and demanding trading; • direct market access; • open access, price transparency and anonymity; • convenience and efficiency; • connectivity through highly secure, resilient and low-latency network options; • access to market data; and • global distribution, including connectivity through high-speed international telecommunications hubs in key financial centers.
EBS Direct is a relationship-based trading platform offering spot FX, Spot Precious Metals (and FX forwards and FX swaps until the scheduled cessation of that business in April 2024).
EBS Direct is a relationship-based trading platform offering Spot FX, Spot Precious Metals (and previously, FX forwards and FX swaps until the cessation of that business in April 2024).
Competition in our CME Clearing Business In recent years there has been increased competition in the provision of clearing services, and we expect competition to continue to increase in connection with compliance with Dodd-Frank, EMIR 2.2, Basel III, MiFID II and other various laws and regulations.
Competition in our CME Clearing Business In recent years there has been increased competition in the provision of clearing services, and we expect competition to continue to increase in connection with compliance with Dodd-Frank, EMIR 3.0, Basel III, MiFID II and other various laws and regulations.
Market Data Business: We offer a variety of market data services through industry-leading market data platforms and third-party distribution partners, which are designed to meet the risk-management, trading, investment and business needs of our global client base. As such, we provide proprietary real-time and historical market data related to CME Group’s deeply liquid exchanges and cash markets businesses.
Market Data Business: We offer a variety of market data services through industry-leading market data platforms and third-party distribution partners, which are designed to meet the risk-management, trading, investment and business needs of our global client base. To this end, we provide proprietary real-time and historical market data related to CME Group’s deeply liquid exchanges and cash markets businesses.
Regulation of our Derivatives Business, CME Clearing, the NEX SEF and Swap Data Repositories Our operation of our U.S. futures exchanges, CME Clearing and the NEX SEF are subject to extensive regulation by the CFTC that requires our regulated subsidiaries to satisfy the requirements of certain core principles relating to the operation and oversight of our markets and our clearing house.
Regulation of our Derivatives Business, Derivatives Clearing Business, and Swap Data Repositories Our operation of our U.S. futures exchanges and our derivatives clearing business are subject to extensive regulation by the CFTC that requires our regulated subsidiaries to satisfy the requirements of certain core principles relating to the operation and oversight of our markets and our clearing house.
Sammann serves as a member of the Board of Directors of the following entities: the Dubai Mercantile Exchange, the COMEX Board of Governors and the Commodities Markets Council, where he also serves as Treasurer.
Sammann serves as a member of the Board of Directors of the following entities: the Gulf Mercantile Exchange, the COMEX Board of Governors and the Commodities Markets Council, where he also serves as Treasurer.
Our Strategic Initiatives The following is a description of our strategic initiatives: Maximize Futures and Options Growth Globally — We continue to focus on driving growth and new customer acquisition by expanding, innovating and scaling our core offerings, and increasing participation from non-U.S. customers.
Our Strategic Initiatives The following is a description of our strategic initiatives: Maximize Futures and Options Growth Globally — We continue to focus on driving growth and new customer acquisition by expanding, innovating and scaling our core offerings, and increasing participation from customers.
Developments in the regulatory environment therefore have the potential to significantly affect our businesses. 11 Table of Contents Please also refer to the discussion below and in "Item 1A - Risk Factors" beginning on page 16 for a description of regulatory and legislative risks and uncertainties.
Developments in the regulatory environment therefore have the potential to significantly affect our businesses. Please also refer to the discussion below and in "Item 1A - Risk Factors" beginning on page 16 for a description of regulatory and legislative risks and uncertainties.
We provide a comprehensive multi-asset class clearing solution to market participants for maximum operational ease and the capital efficiency that comes with connecting to our clearing house. Our clearing services offer the ability to optimize collateral and capital efficiencies across portfolios within the clearing house while meeting the heightened regulatory requirements on derivatives.
We provide a comprehensive multi-asset-class clearing solution to market participants for maximum operational ease and the capital efficiency that comes with connecting to our clearing house. Our clearing services offer the ability to optimize collateral 8 Table of Contents and capital efficiencies across portfolios within the clearing house while meeting the heightened regulatory requirements on derivatives.
In 2023, we launched CME SPAN 2 for certain futures and options on energy products, an enhancement of our Standard Portfolio Analysis of Risk (SPAN) margin framework, which provides enhanced risk management capabilities in a single, unified interface across futures and options, cleared OTC products and portfolio margining programs.
In 2023, we launched CME SPAN 2 for certain futures and options on energy products, an enhancement of our Standard Portfolio Analysis of Risk (SPAN) margin framework, which provides enhanced risk management capabilities in a single, unified interface across futures and options, cleared OTC products and portfolio margining programs. In 2024, we expanded SPAN 2 to equity products.
Legislation would be necessary to impose such a fee. Federal legislation has previously been proposed by Congress that would impose a user fee on digital asset spot markets to fund CFTC regulation of those 12 Table of Contents assets.
Legislation would be necessary to impose such a fee. Federal legislation has previously been proposed by Congress that would impose a user fee on digital asset spot markets to fund CFTC regulation of those assets.
We have increased our customer base and continue to target cross-asset opportunities across client segments and across cash and futures platforms, driving global sales and generating new client participation across all regions.
We have increased our customer base and continue to target cross-asset opportunities across client segments and across cash and futures platforms, driving sale and generating new client participation across all regions.
With the ongoing implementation of regulatory reform in the United States and in Europe, along with global implementation of Basel III capital requirements on financial institutions, we expect centralized clearing and capital efficiencies to continue to be important for our global client base.
With the ongoing implementation of regulatory reform in the U.S. and in Europe, along with global implementation of Basel III capital requirements on financial institutions, we expect centralized clearing and capital efficiencies to continue to be important for our global client base.
Please also refer to the discussion below and in " Item 1A - Risk Factors" beginning on page 16 for a description of competitive risks and uncertainties.
Please also refer to the discussion below and in " Item 1A - Risk Factors" beginning o n page 16 for a description of competitive risks and uncertainties.
In the event a clearing firm were to withdraw, our experience indicates that the customer portion of the firm's trading activity would likely transfer to one or more other clearing firms of the exchange. Cash Markets Business: Our cash markets business is comprised of BrokerTec and operated on CME Globex EBS. Certain BrokerTec products are cleared at third-party clearing houses.
In the event a clearing firm were to withdraw, our experience indicates that the customer portion of the firm's trading activity would likely transfer to one or more other clearing firms of the exchange. Cash Markets Business: Our cash markets business comprises BrokerTec and EBS, primarily operated on CME Globex. Certain BrokerTec products are cleared through third-party clearing houses.
The FSB cannot dictate the implementation of its standards, including in the U.S., but has historically exerted pressure on local jurisdictions to adopt its proposals.
While the FSB cannot dictate the implementation of its standards, including in the U.S., it has historically exerted pressure on local jurisdictions to adopt its proposals.
Treasury securities and CME interest rate futures. Partnership with Google Cloud - In November 2021, we announced a 10-year strategic partnership with Google Cloud to accelerate CME Group’s move to the cloud, which we expect will transform derivatives markets by expanding access and creating efficiencies for market participants.
Partnership with Google Cloud - In November 2021, we announced a 10-year strategic partnership with Google Cloud to accelerate CME Group’s move to the cloud, which we expect will transform derivatives markets by expanding access and creating efficiencies for market participants.
Key Areas of Focus We actively monitor and participate in the domestic and international legislative and rulemaking processes for our industry, including providing government testimony, commenting on proposed legislation and rulemaking, and educating our regulators and policymakers on potential impacts to the marketplace. We are also focused on the U.S.
Key Areas of Focus We actively monitor and participate in the domestic and international legislative and rulemaking processes for our industry, including providing government testimony, commenting on proposed legislation and rulemaking, and educating our regulators and policymakers on potential impacts to the marketplace.
We compete in a large and expanding financial services trading, clearing and settlement marketplace globally. Our competitors include, among other entities, exchanges such as Intercontinental Exchange, Inc. (ICE), the Chicago Board Options Exchange (CBOE), Euronext N.V., the Hong Kong Exchanges and Clearing Limited and Deutsche Börse AG.
We compete in a large and expanding financial services trading, clearing and settlement marketplace globally. Our competitors include, among other entities, exchanges such as Intercontinental Exchange, Inc. (ICE), Cboe Global Markets (Cboe), Euronext N.V., the Hong Kong Exchanges (HKEx) and Clearing Limited, and Deutsche Börse AG.
In 2023 , 84% of our contract volume was from trades by our members. CME Clearing Business: Through our clearing house, we provide clearing and settlement services for a broad range of exchange-traded futures and options on futures contracts and OTC derivatives.
In 2024 , 85% of our contract volume was from trades by our members. CME Clearing Business: Through our clearing house operated by CME, we provide clearing and settlement services for a broad range of exchange-traded futures and options on futures contracts and OTC derivatives.
Our products provide a means for hedging, speculation and asset allocation related to the risks associated with, among other things, interest rate sensitive instruments, equity ownership, changes in the value of foreign currency and changes in the prices of agricultural, energy and metal commodities. • CME's product slate includes agricultural, equities, FX, cryptocurrencies/alternative investments and interest rate products, including Secured Overnight Financing Rate (SOFR) futures and options, livestock and cash-settled contracts based on the S&P 500, including the E-mini S&P 500 ESG (Environmental, Social and Governance) contract, Micro E-mini Equity Index contracts, Nasdaq-100, FTSE Russell and Bitcoin and Ether Reference Rate. • CBOT's product slate consists of agricultural, equities and interest rate products, including contracts for United States (U.S.) Treasury futures, soybean, corn and wheat and contracts based on the Dow Jones Industrial Index. • NYMEX's product slate consists of energy and metals products, including contracts for crude oil, natural gas, heating oil, gasoline and emissions (GEO, N-GEO and C-GEO). • COMEX's product slate consists of metals products, including contracts for gold, silver, copper and other base, ferrous and battery metals.
Our products provide a means for hedging, speculation and asset allocation related to the risks associated with, among other things, interest rate sensitive instruments, equity ownership, changes in the value of foreign currency and changes in the prices of agricultural, energy and metal commodities. • CME's product slate includes agricultural, equities, FX, OTC Interest Rate Swaps complex, cryptocurrencies/alternative investments and interest rate products, including Secured Overnight Financing Rate (SOFR) futures and options, Fed Funds futures and options, livestock and cash-settled contracts based on the S&P 500, Micro E-mini Equity Index contracts, Nasdaq-100, FTSE Russell, Nikkei and Bitcoin and Ether futures and options. • CBOT's product slate consists of agricultural, equities and interest rate products, including contracts for United States (U.S.) Treasury futures, soybean, corn and wheat and contracts based on the Dow Jones Industrial Index. • NYMEX's product slate consists of energy and metals products, including contracts for crude oil, natural gas, heating oil (or low sulfur diesel), gasoline, emissions (GEO, N-GEO and C-GEO), platinum and palladium. • COMEX's product slate consists of metals products, including contracts for gold, silver, copper and other base, ferrous and battery metals.
Our license for the S&P 500 Index will be exclusive for futures and options until one year prior to the termination of the S&P License Agreement, and non-exclusive for the last year. The license for the other S&P stock indexes 9 Table of Contents is generally exclusive for futures and options.
Our license for the S&P 500 Index will be exclusive for futures and options until one year prior to the termination of the S&P License Agreement, and non-exclusive for the last year. The license for the other S&P stock indices is generally exclusive for futures and options.
Select highlights of our employee experience include the following: • We offer a wide range of benefits designed to support our employees’ health and well-being, retirement needs and work/life balance. • We provide a variety of avenues for employees to grow their expertise, including tuition assistance for continuing education, onsite and virtual-led professional development training courses, access to external seminars and technical skills training and over 10,000 online educational courses.
Select highlights of our employee experience include the following: • We offer a wide range of benefits designed to support our employees’ health and well-being, retirement needs and work/life balance. • Our competitive compensation programs align employee rewards with shareholder interests and emphasize our pay-for-performance philosophy. • We provide a variety of avenues for employees to grow their expertise, including tuition assistance for continuing education, onsite and virtual-led professional development training courses, access to external seminars and technical skills training and over 10,000 online educational courses.
It remains possible that data, pricing and analytics provided by CME Group for use by E.U. supervised entities and use of those benchmarks may be impacted in the future. • Concerns that European legislators will prohibit or restrict exclusive licenses for benchmark indexes, which might impact the profitability of several of our most popular contracts. • The implementation of rules resulting in negative treatment of the liquidity profile of U.S.
It remains possible that data, pricing and analytics provided by CME Group for use by E.U. supervised entities and use of those benchmarks may be impacted in the future. • Concerns that European legislators will prohibit or restrict exclusive licenses for benchmark indices, which might impact the profitability of several of our most popular contracts.
BrokerTec and EBS offer anonymous and disclosed trading venues, offering clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers. • BrokerTec operates global electronic trading for fixed income products, with a leading position in cash U.S. Treasuries, E.U. and U.S. repo fixed income instruments and European Government Bonds.
BrokerTec and EBS offer anonymous and disclosed trading venues, offering clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers. BrokerTec operates global electronic trading for fixed income and money market products, with a leading position in cash U.S.
We have further focused on building upon cloud-based data distribution capabilities as a more flexible and potentially cost-effective means of providing data to our clients. In 2023, CME Group futures and options had a record average daily volume of 24.4 million contracts , with a volume record in our interest rates asset class for the second consecutive year.
We have further focused on building upon cloud-based data distribution capabilities as a more flexible and potentially efficient means of providing data to our clients. In 2024, CME Group futures and options had a record average daily volume of 26.5 million contracts , with a volume record in our interest rates asset class for the third consecutive year.
We have also seen the emergence of new players in the derivatives exchange business, in some cases backed by market makers and broker-dealers, as well as crypto platforms.
We have also seen the emergence of new players in the derivatives exchange business, such as brokerage BGC Group’s launch of FMX Futures Exchange, and in some cases backed by market makers and broker-dealers, as well as crypto platforms.
In July 2023, the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency jointly proposed changes to the regulatory capital framework for global systematically important banks (GSIBs), to implement international capital standards issued by the Basel Committee on Banking Supervision.
In July 2023, the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency jointly proposed changes to the regulatory capital framework for global systematically important banks (GSIBs), to implement international capital standards issued by the Basel Committee on Banking Supervision, which the Fed Vice Chair said will not be implemented as originally proposed.
We pay the applicable third-party, per-trade fees based on contract volume under the terms of these licensing agreements. A copy of the S&P License Agreement has been filed as a material contract.
We pay the applicable third-party a revenue share under the terms of these licensing agreements. A copy of the S&P License Agreement has been filed as a material contract.
BrokerTec Stream is a relationship-based trading platform offering U.S. Treasury instruments. • EBS provides for the trading of global FX products across major and emerging market currencies and Spot Precious Metals. EBS Market is a Central Limit Order Book electronic trading platform for spot FX, Spot Precious Metals and NDFs.
Treasury instruments. 6 Table of Contents EBS provides for the trading of global FX products across major and emerging market currencies and Spot Precious Metals. EBS Market is a Central Limit Order Book electronic trading platform for spot FX, Spot Precious Metals and NDFs.
Our competitors in the clearing services space include, among others, companies such as ICE, LCH Group, OCC, CBOE Clear, Depository Trust & Clearing Corporation, Hong Kong Exchanges and Clearing, Japan Securities Clearing Corporation, LME Clear and Deutsche Börse AG.
Our competitors in the clearing services space include, among others, companies such as ICE, LCH Group, OCC, Cboe Clear, Depository Trust & Clearing Corporation, HKEx and Clearing, Japan Securities Clearing Corporation, LME Clear and Eurex Clearing.
We recognize that fostering a diverse and inclusive global culture is critical to our business success. We provide our workforce with a compelling employee experience that allows us to attract, retain and develop industry-leading talent. We are continually seeking new ways to challenge, develop and support our employees.
We provide our workforce with a compelling employee experience that allows us to attract and retain industry-leading talent. We are continually seeking new ways to challenge, develop and support our employees.
Prior to joining us, Mr. Sammann served as Managing Director, Global Head of FX Options and Structured Products at Calyon Corporate and Investment Bank in London from 1997 to 2006. Mr.
He previously served as our Senior Managing Director, Financial Products and Services since 2009 and Global Head of Foreign Exchange Products since joining us in 2006. Prior to joining us, Mr. Sammann served as Managing Director, Global Head of FX Options and Structured Products at Calyon Corporate and Investment Bank in London from 1997 to 2006. Mr.
Mr. Tobin most recently served as our Managing Director, Corporate Finance since 2007. Prior to our merger with CBOT Holdings, Mr. Tobin served as the Director, Corporate Finance for CBOT Holdings and CBOT from 2002 to 2007. Prior to joining CBOT, Mr. Tobin served as a principal consultant with PricewaterhouseCoopers from 1997 to 2002. Mr.
Tobin has served as Managing Director and Chief Accounting Officer since 2015. Mr. Tobin most recently served as our Managing Director, Corporate Finance since 2007. Prior to our merger with CBOT Holdings, Mr. Tobin served as the Director, Corporate Finance for CBOT Holdings and CBOT from 2002 to 2007. Prior to joining CBOT, Mr.
In 2023, approximate ly 30% of our electronic futures and options volume was from transactions reported as outside the U.S. and approximately 54% of our market data revenue was derived from outside the U.S. We also achieved 13% growth in trading volume during European trading hours and 11% growth during Latin America trading hours in 2023 compared to 2022.
In 2024, approximately 31% of our electronic futures and options volume was from transactions reported as outside the U.S. and approximately 54% of our market data revenue was derived from outside the U.S. We also achieved 17% growth in trading volume during European trading hours and 7% growth during Asia Pacific trading hours in 2024 compared to 2023.
As of December 31, 2023, our global employee population consisted of approximately 3,565 staff, with 62% (approximately 2,200) of these employees working in the United States. and the remaining 38% (approximately 1,365) working in our various non-U.S. locations (Australia, Brazil, Canada, China, France, Hong Kong, India, Japan, Mexico, Netherlands, Singapore, South Korea, Sweden, Switzerland and the U.K.).
As of December 31, 2024, our global employee population consisted of approximately 3,760 employees, with 60% (approximately 2,245) working in the U.S. and the remaining 40% (approximately 1,515) working in our various non-U.S. locations (Australia, Brazil, Canada, China, France, Hong Kong, India, Japan, Mexico, Netherlands, Singapore, South Korea, Switzerland and the U.K.).
Securities and Exchange Commission (SEC) as a broker-dealer and alternative trading system operator. BrokerTec is also subject to regulation by the FCA in the U.K., as a multilateral trading facility, in the E.U., under the AFM, as a regulated market and by the applicable regulators in Singapore and Canada.
BrokerTec is also subject to regulation in the U.K. by the FCA, as a multilateral trading facility (MTF), in the E.U. by the AFM, as a regulated market and by the applicable regulators in Singapore and Canada.
Information regarding our sustainability practices is available in our annual Environmental, Social and Governance Reports, including our report for 2023 when issued, at the following: https://www.cmegroup.com/company/corporate-citizenship/esg.html.
Information regarding our sustainability practices is available at the following: https://www.cmegroup.com/company/corporate-citizenship/esg.html, including our 2024 report when issued.
In 2023, we have been executing against the plans to move our non-latency sensitive applications, including clearing and data, to the Cloud. The migration of these applications will enable us to commercialize and launch new clearing and data products.
In 2023, we began executing against the plans to move our non-latency sensitive applications, including clearing and market data, to the CME Group Google Cloud Platform. The migration of these applications will enable a more efficient way for us to commercialize and launch new clearing and data products.
Winkler also serves as a director of S&P Dow Jones Indices LLC. AVAILABLE INFORMATION Our website is www.cmegroup.com . Information made available on our website does not constitute part of this document.
Prior to our merger with CBOT Holdings, Ms. Winkler held positions of increasing responsibility for CBOT Holdings since 1996. Ms. Winkler also serves as a director of S&P Dow Jones Indices LLC. AVAILABLE INFORMATION Our website is www.cmegroup.com. Information made available on our website does not constitute part of this document.
He also serves on the Shanghai Gold Exchange’s International Advisory Board, the Commodity Futures Trading Commission's Agricultural & Energy and Environmental Markets Advisory Committees, and the Security Traders Association’s Listed Options Committee. Suzanne Sprague, 43. Ms. Sprague has served as Senior Managing Director & Global Head of Clearing and Post-Trade Services for CME Group since February 2022.
He also serves on the Shanghai Gold Exchange’s International Advisory Board, the Commodity Futures Trading Commission's Agricultural & Energy and Environmental Markets Advisory Committees, and the Security Traders Association’s Listed Options Committee. Suzanne Sprague, 44. Ms. Sprague has served as our Chief Operating Officer and Global Head of Clearing since November 2024.
Treasury Futures (2023) In addition to the individual product launches noted above, we have completed many product extensions across our asset classes, including short-dated options products (Monday options on U.S.
Real Estate Index Futures In addition to the individual product launches noted above, we have completed many product extensions across our asset classes, including short-dated options products (Monday options on U.S. Treasury Futures, Tuesday and Thursday options on WTI Crude Oil, Tuesday and Thursday options on Gold, Silver, and Copper, and Bitcoin Friday futures).
Since 2015, she served as Managing Director, Credit & Liquidity Risk, Risk Policy & Banking, overseeing CME Clearing’s exposure to counterparty credit risk, liquidity risk management and financial performance, acceptable collateral and collateral services, risk management policies and procedures, financial operations, and banking. Jack Tobin, 60 . Mr. Tobin has served as Managing Director and Chief Accounting Officer since 2015.
Since 2015, she served as Managing Director, Credit & Liquidity Risk, Risk Policy & Banking, 15 Table of Contents overseeing our clearing house's exposure to counterparty credit risk, liquidity risk management and financial performance, acceptable collateral and collateral services, risk management policies and procedures, financial operations, and banking. Jack Tobin, 61. Mr.
We are expecting to start client testing in the second half of 2024. Diversify our Business and Revenue - Our acquisition of NEX strengthened our role in global financial markets infrastructure and information services, adding complementary cash and OTC businesses and scale to our listed interest rate and FX products, while broadening our global client base.
Diversify our Business and Revenue - Our acquisition of NEX strengthened our role in global financial markets infrastructure and information services, adding complementary cash, spot, and OTC businesses, and scale to our listed interest rate and FX products, while broadening our global client base. It also further diversified our customer base and relationships outside the U.S.
He is responsible for leading the development and execution of the company’s global interest rate, equity index, foreign exchange, OTC, cryptocurrency and alternative investment product strategies. He also serves on the S&P Dow Jones Indices U.S. Advisory Panel. Before joining CME Group in 2013 as Global Head of Equity Products, Mr.
He previously served as Global Head of Financial and OTC Products since June 2023. Before that he was the global head of Equity and FX Products. He is responsible for leading the development and execution of the company’s global equity index, foreign exchange, cryptocurrency and alternative investment product strategies. He also serves on the S&P Dow Jones Indices U.S.
Cutinho has served as our Chief Information Officer since February 2022 and previously served as President of CME Clearing since 2014. He joined CME Group in 2002 and since then has held various positions of increasing responsibility within the organization, including as Managing Director, Deputy Head of CME Clearing from April 2014 through September 2014. Lynne Fitzpatrick, 45. Ms.
He joined CME Group in 2002 and since then has held various positions of increasing responsibility within the organization, including as Managing Director, Deputy Head of CME Clearing from April 2014 through September 2014. Michael Dennis, 44. Mr.
Cross-margining allows firms to achieve portfolio margin efficiencies for offsetting positions between two clearing houses, including CME and Fixed Income Clearing Corporation (FICC) or CME and Options Clearing Corporation (OCC), through reduced performance bond requirements. Through an enhancement to our arrangement with FICC, in January 2024, we began offering enhanced capital efficiencies to our eligible clearing members when trading U.S.
Cross-margining allows firms to achieve portfolio margin efficiencies for offsetting positions between two clearing houses, including CME and Fixed Income Clearing Corporation (FICC) or CME and Options Clearing Corporation (OCC), through reduced performance bond requirements.
There is a growing array of platforms and technologies, often owned by well-capitalized financial institutions and intermediaries that are also driving internalization of client FX trade flows.
There is a growing array of platforms and technologies, often owned by well-capitalized financial institutions and intermediaries that are also driving internalization of client FX trade flows. There is also increasing competition from foreign government entities providing financial inducements to establish new FX trading venues in their countries.
Piell has served as our Chief Human Resources Officer since 2007. A practicing attorney for seventeen years, Ms. Piell previously held positions of increasing responsibility in our Legal & Market Regulation division, most recently as Managing Director and Senior Associate General Counsel. Prior to joining CME Group in 2000, Ms.
Piell previously held positions of increasing responsibility in our Legal & Market Regulation division, most recently as Managing Director and Senior Associate General Counsel. Prior to joining CME Group in 2000, Ms. Piell served as Associate Commercial Counsel at MCI Telecommunications (1996-2000) and Associate Litigation Attorney at Jenner & Block (1992-1996).
The CME ClearPort front-end system provides access to our flexible clearing services over multiple asset classes. The majority of clearing and transaction fees received from clearing firms represents charges for trades executed and cleared on behalf of their customers. No firm represented at least 10% of our clearing and transaction fees revenue for 2023.
The majority of clearing and transaction fees received from clearing firms represents charges for trades executed and cleared on behalf of their customers. One firm represented at least 10% of our clearing and transaction fees revenue for 2024.
The SEC adopted a rule in December 2023, mandating central clearing of U.S. Treasury securities and repurchase agreements. This will require infrastructure changes to facilitate access to clearing for all participants, including indirect participants, to ensure continued liquidity in these critical markets (i.e., ensure access to FICC's clearing and settlement services for indirect participants). • Basel III Endgame rules.
This will require infrastructure changes to facilitate access to clearing for all participants, including indirect participants, to ensure continued liquidity in these critical markets (i.e., ensure access to FICC's clearing and settlement services for indirect participants). The goal of CMESC is to help market participants comply with these clearing requirements. • Basel III Endgame rules.
Since joining the company in 2001, he has held a variety of senior leadership roles, including Managing Director, Planning and Execution; Global Head, Commodity Products and OTC Solutions, and Managing Director and Chief Corporate Development Officer. Prior to joining us, Mr. Vroman most recently served as Vice President, Corporate Operations/Chief of Staff to the Chief Executive Officer for marchFirst Inc.
Since joining the company in 2001, he has held a variety of senior leadership roles, including Managing Director, Planning and Execution; Global Head, Commodity Products and OTC Solutions, and Managing Director and Chief Corporate Development Officer. Julie Winkler, 50. Ms. Winkler has served as our Chief Commercial Officer since 2016.
Duffy previously served as our Executive Chairman and President since 2012 and as Executive Chairman from 2006. Mr. Duffy has been a member of our board of directors since 1995. He also served as President of TDA Trading, Inc. from 1981 to 2002 and has been a member of our CME exchange since 1981. Sunil Cutinho , 52 . Mr.
He also served as President of TDA Trading, Inc. from 1981 to 2002 and has been a member of our CME exchange since 1981. Sunil Cutinho, 53. Mr. Cutinho has served as our Chief Information Officer since February 2022 and previously served as President of our clearing house since 2014.
As customers continue to leverage cloud technology to improve and evolve their businesses, CME Group has taken a leading role by becoming the first derivatives marketplace to provide live market data natively in the cloud with the launch of our cloud connect capabilities on the Google Cloud Platform.
We further offer derived cash markets pricing, third-party and alternative data sets, as well as a wide range of analytic tools. As customers continue to leverage cloud technology to improve and evolve their businesses, CME Group has taken a leading role by becoming the first derivatives marketplace to provide live market data natively on the Google Cloud.
Fitzpatrick has served as our Chief Financial Officer since April 2023 and in her role is responsible for overseeing the company's corporate finance, accounting, investor relations, treasury, real estate, business development, corporate strategy, strategic investments, pricing and procurement functions.
Fitzpatrick has served as our President & Chief Financial Officer since November 2024, when her role expanded to oversee human resources and transformation and execution, as well as her prior responsibilities for overseeing the company's corporate finance, accounting, investor relations, treasury, business development, corporate strategy, strategic investments, pricing and procurement functions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have registered many of our most important trademarks in the U.S. and other countries. We hold the rights to a number of patents and have patent applications pending. Our patents cover match engine, trader user interface, trading floor support, market data, general technology and clearing house functionalities.
Biggest changeWe own the rights to a large number of trademarks, service marks, domain names and trade names in the U.S., Europe, and other parts of the world. We have registered many of our most important trademarks in the U.S. and other countries. We hold the rights to a number of patents and have patent applications pending.
We cannot provide assurances that we will be able to continue to expand our products and services, that we will be able to retain our current customers or attract new customers or that we will not be required to modify our pricing structure to compete effectively. Changes in our pricing structure may result in a decrease in our profit margin.
We cannot provide assurances that we will be able to continue to expand our products and services, that we will be able to retain our current customers or attract new customers or that we will not be required to modify our pricing structure to compete effectively. Changes in our pricing structure may result in a decrease to our profit margin.
Our competitors may: • respond more quickly to competitive pressures and opportunities, including responses based upon their corporate governance structures, which may be more flexible and efficient than our corporate governance structure; • develop products that are preferred by our customers compared to those offered by CME Group; • develop risk transfer products that compete with our products; • price their products and services more competitively; • develop and expand their network infrastructure and service offerings more efficiently; • utilize better, more user-friendly or more reliable technology; • take greater advantage of acquisitions, alliances and other opportunities that provide a competitive advantage; • more effectively market, promote and sell their products and services; • better leverage existing relationships with customers and alliance partners or exploit better recognized brand names to market and sell their services; or • exploit regulatory disparities between traditional, regulated exchanges and alternative markets that benefit from a reduced regulatory burden and lower-cost business model.
Our competitors may: • respond more quickly to competitive pressures and opportunities, including responses based upon their corporate governance structures, which may be more flexible and efficient than our corporate governance structure; • develop products that are preferred by our customers compared to those offered by CME Group; • develop risk transfer products that compete with our products; • price their products and services more competitively; • develop and expand their network infrastructure and service offerings more efficiently; • utilize better, more user-friendly or more reliable technology, including artificial intelligence; • take greater advantage of acquisitions, alliances and other opportunities that provide a competitive advantage; • more effectively market, promote and sell their products and services; • better leverage existing relationships with customers and alliance partners or exploit better recognized brand names to market and sell their services; or • exploit regulatory disparities between traditional, regulated exchanges and alternative markets that benefit from a reduced regulatory burden and lower-cost business model.
Although we conduct due diligence and monitor important suppliers and service providers (including their resiliency), we cannot provide assurances of their performance and any interruption or cessation of their supplies or services could negatively impact our operations or those of our customers, as well as affect our reputation, financial or regulatory posture.
Although we conduct due diligence and monitor important suppliers and service providers (including the resiliency of their operations), we cannot provide assurances of their performance and any interruption or cessation of their supplies or services could negatively impact our operations or those of our customers, as well as affect our reputation, financial or regulatory posture.
We may issue additional equity and/or debt as part of strategic partnerships with third parties, as was the case in connection with our transaction with Google Cloud. The issuance of additional equity in connection with any future transaction could be substantially dilutive to our existing shareholders. The issuance of additional debt could increase our leverage substantially.
We may issue additional equity and/or debt as part of strategic partnerships with third parties, as was the case in connection with our partnership with Google Cloud. The issuance of additional equity in connection with any future transaction could be substantially dilutive to our existing shareholders. The issuance of additional debt could increase our leverage substantially.
While these service providers have undertaken to keep current and certify as to our enhancements and make corresponding changes to their software to our interfaces and functionality, we cannot guarantee that they will continue to make the necessary monetary, resource and time investments to keep up with our enhancements and changes.
While these service providers have undertaken to keep current and certify as to our enhancements and make corresponding changes to their software for our interfaces and functionality, we cannot guarantee that they will continue to make the necessary monetary, resource and time investments to keep up with our enhancements and changes.
We cannot guarantee that our policies and procedures will always be effective or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed. We could be harmed by misconduct or errors that are difficult to detect and deter.
We cannot guarantee that our policies and procedures will always be effective or that we will always be successful in evaluating, monitoring or managing the risks to which we are or may be exposed. We could be harmed by misconduct or errors that are difficult to detect and deter.
Additionally, outside parties may attempt to fraudulently induce employees, users, customers or our third party providers to disclose sensitive information in order to gain access to our technology systems and data, or our customers’ data.
Additionally, outside parties may attempt to fraudulently induce employees, users, customers or our third party providers to disclose sensitive information in order to gain access to our technology systems and data, or our customers’ systems and data, or our third parties' systems and data.
In 2023, 92% of o ur overall contract volume was generated through electronic trading on our CME Globex electronic platform. We must continue to enhance our electronic trading platforms and other technology offerings to remain competitive. As a result, we will continue to be subject to risks, expenses and uncertainties encountered in the rapidly evolving market for electronic transaction services.
In 2024, 92% of o ur overall contract volume was generated through electronic trading on our CME Globex electronic platform. We must continue to enhance our electronic trading platforms and other technology offerings to remain competitive. As a result, we will continue to be subject to risks, expenses and uncertainties encountered in the rapidly evolving market for electronic transaction services.
BrokerTec Americas maintains access to liquidity resources it believes will satisfy these obligations in normal and stressed circumstances, but there can be no guarantee it will never experience a shortfall. Please see "Item 1 - Business - Regulatory Matters" beginning on page 11 for additional information on our areas of regulatory focus.
BrokerTec Americas maintains access to liquidity resources it believes will satisfy these obligations in normal and stressed circumstances, but there can be no guarantee it will never experience a shortfall. Please see "Item 1 - Business - Regulatory Matters" beginning on page 12 for additional information on our areas of regulatory focus.
Misconduct by our employees and agents could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of customers or the company, improper securities trading activities, circumvention of controls and procedures, improper use of assets, improper use and unauthorized disclosure of data or confidential information of the company or its customers, improper use of artificial intelligence or failure to provide effective oversight over artificial intelligence, among other potential misconduct.
Misconduct by our employees and agents could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of customers or the company, improper securities trading activities, circumvention of controls and procedures, improper use of assets, improper use and unauthorized disclosure of data or confidential information of the company or its customers or third parties, improper use of artificial intelligence or failure to provide effective oversight over artificial intelligence, among other potential misconduct.
We cannot assure that we will not experience system failures from power or telecommunications failures, acts of God, war or terrorism, human error on our part or on the part of our third-party providers or partners, natural disasters, fire, sabotage, hardware or software malfunctions or defects, computer viruses, cyber attacks, acts of vandalism or similar occurrences.
We cannot assure that we will not experience system failures from power or telecommunications failures, acts of God, war or terrorism, human error on our part or on the part of our third-party providers or partners, natural disasters, fire, rising temperatures, sabotage, hardware or software malfunctions or defects, computer viruses, cyber attacks, acts of vandalism or similar occurrences.
Our systems, or those of our third-party providers, including cloud providers, may fail or be shut down or, due to capacity constraints, may operate slowly, causing one or more of the following to occur: • unanticipated disruptions in service to our customers; • slower response times and delays in our customers' trade execution and processing; • failed settlement of trades; • incomplete or inaccurate accounting, recording, or processing of trades; 20 Table of Contents • financial losses; • cybersecurity attacks; • litigation or other customer claims; • loss of customers; or • regulatory sanctions.
Our systems, or those of our third-party providers, including cloud providers, may fail or be shut down or, due to capacity constraints, may operate slowly, causing one or more of the following to occur: • unanticipated disruptions in service to our customers; • slower response times and delays in our customers' trade execution and processing; • failed settlement of trades; • incomplete or inaccurate accounting, recording, or processing of trades; • financial losses; • cybersecurity attacks; • litigation or other customer claims; • loss of customers; or • regulatory sanctions.
Additional new laws or regulations or 16 Table of Contents changes in enforcement practices applicable to our businesses or those of our clients could be imposed in the U.S. or other jurisdictions, which could change, or require us to change, our business practices or the structure of our business, including its current governance, risk oversight or regulatory structure, or impose significant costs on us by, for example, requiring more of our funds to be set aside for the guaranty fund or to meet other compliance requirements.
Additional new laws or regulations or changes in enforcement practices applicable to our businesses or those of our clients could be imposed in the U.S. or other jurisdictions, which could change, or require us to change, our business practices or the structure of our business, including its current governance, risk oversight or regulatory structure, or impose significant costs on us by, for example, requiring more of our funds to be set aside for the guaranty fund or to meet other compliance requirements.
Please see "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Requirements" beginning on page 45 for additional information regarding capital requirements. Any reduction in our credit rating could increase the cost of our funding from the capital markets.
Please see "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Requirements" beginning on page 47 for additional information regarding capital requirements. Any reduction in our credit rating could increase the cost of our funding from the capital markets.
Our dependence on the trading and clearing activities of our exchange members, combined with the CME members' rights to elect six directors, may enable them to exert influence over the operation of our business. Ten of our directors own, or are officers or directors of firms that own trading rights on our exchanges.
Our dependence on the trading and clearing activities of our exchange members, combined with the CME members' rights to elect six directors, may enable them to exert influence over the operation of our business. Nine of our directors own, or are officers or directors of firms that own trading rights on our exchanges.
In addition, in the future, we may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity.
In addition, in the future, we may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, challenge the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity.
Ten of our board members own trading rights, or are officers or directors of firms that own trading rights, on our derivatives exchanges. As members, these individuals may have interests that differ from or conflict with those of shareholders who are not also members.
Nine of our board members own trading rights, or are officers or directors of firms that own trading rights, on our derivatives exchanges. As members, these individuals may have interests that differ from or conflict with those of shareholders who are not also members.
Federal Reserve and other international banks' forecasted interest rates; • availability of capital to our market participants and their appetite for risk-taking; • levels of assets under our customers' management; • volatile weather patterns, droughts, natural disasters and other catastrophes; • pandemics affecting our customer base or our ability to operate our markets; and • consolidation or expansion in our customer base and within our industry.
Federal Reserve and other international banks' forecasted interest rates; • availability of capital to our market participants and their appetite for risk-taking; • levels of assets under our customers' management; • volatile weather patterns, droughts, natural disasters and other catastrophes; 16 Table of Contents • pandemics affecting our customer base or our ability to operate our markets; and • consolidation or expansion in our customer base and within our industry.
As of December 31, 2023, we had approximately $3.4 billion of total indebtedness and we had excess borrowing capacity for general corporate purposes under our existing facilities of approximately $2.3 billion. Our indebtedness could have important consequences.
As of December 31, 2024, we had approximately $3.4 billion of total indebtedness and we had excess borrowing capacity for general corporate purposes under our existing facilities of approximately $2.3 billion. Our indebtedness could have important consequences.
To the extent any of our service providers or the organizations that provide services to our customers in connection with their trading activities cease to provide these services or cease to provide these services in an efficient, cost-effective manner, or fail to adequately expand their services to meet our needs and the needs of our customers, we could experience decreased trading 21 Table of Contents volume, lower revenues and higher costs.
To the extent any of our service providers or the organizations that provide services to our customers in connection with their trading activities cease to provide these services or cease to provide these services in an efficient, cost-effective manner, or fail to adequately expand their services to meet our needs and the needs of our customers, we could experience decreased trading volume, lower revenues and higher costs.
Our technology, our customers, our people and our third-party service providers may be vulnerable to targeted attacks, such as "phishing" attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, "ransomware" attacks, attacks created through artificial intelligence, firewall or encryption failures or other security or operational risks.
Our technology, our customers, our people and our third-party service providers may be vulnerable to targeted attacks, such as "phishing" attacks, unauthorized access, fraud, business email compromise, computer viruses, denial of service attacks, terrorism, "ransomware" attacks, attacks created through artificial intelligence, firewall or encryption failures or other security or operational risks.
In addition, our members and participants in our various incentive programs generally are charged lower fees than our non-member customers. Variation in each of these factors is difficult to predict and will have an impact on our average rate per contract in 25 Table of Contents the particular period.
In addition, our members and participants in our various incentive programs generally are charged lower fees than our non-member customers. Variation in each of these factors is difficult to predict and will have an impact on our average rate per contract in the particular period.
Any such litigation, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely affect our business. 24 Table of Contents Patents of third parties may have an important bearing on our ability to offer certain products and services.
Any such litigation, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely affect our business. Patents of third parties may have an important bearing on our ability to offer certain products and services.
In connection with these rights, our ability to take certain actions that we may deem to be in the best interests of the company and its shareholders, including actions relating to certain pricing decisions, may be limited by the rights of our members. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
In connection with these rights, our ability to take 26 Table of Contents certain actions that we may deem to be in the best interests of the company and its shareholders, including actions relating to certain pricing decisions, may be limited by the rights of our members. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
If we experience systems failures or capacity constraints, our ability to conduct our operations and execute our business strategy could be materially harmed, and we could be subjected to significant costs and liabilities.
If we experience systems failures or capacity constraints, our ability to conduct our operations and execute our business strategy could be materially harmed, and we could be subject to significant costs and liabilities.
We are primarily subject to the jurisdiction of the regulatory agencies in the U.S., U.K. and European Union. As a result of our global operations, we are also subject to the rules and regulations of other local jurisdictions in which we conduct business and offer our products and services, as appropriate.
We are primarily subject to the jurisdiction of the regulatory agencies in the U.S., U.K. and E.U. As a result of our global operations, we are also subject to the rules and regulations of other local jurisdictions in which we conduct business and offer our products and services, as appropriate.
We encounter competition in all aspects of our business, including from entities having substantially greater capital and resources, offering a wide range of products and 17 Table of Contents services and in some cases operating under a different and possibly less stringent regulatory regime.
We encounter competition in all aspects of our business, including from entities having substantially greater capital and resources, offering a wide range of products and services and in some cases operating under a different and possibly less stringent regulatory regime.
Further, allegations by regulatory or criminal authorities of improper trading activities in our markets could affect our brand and reputation and reduce the number of participants trading in our markets. If that should occur, we could face a corresponding decline in trading volume and revenue.
Further, allegations by regulatory or criminal authorities of improper 24 Table of Contents trading activities in our markets could affect our brand and reputation and reduce the number of participants trading in our markets. If that should occur, we could face a corresponding decline in trading volume and revenue.
As part of maintaining its FICC membership, BrokerTec Americas is required to timely and fully meet all margin calls and other obligations established by FICC, and as such must maintain ready access to sufficient liquidity to satisfy those obligations.
As part of maintaining its FICC membership, BrokerTec Americas is required to timely and fully meet all margin calls and other obligations established by FICC, and as such must maintain ready access to sufficient liquidity to satisfy 17 Table of Contents those obligations.
To the extent a clearing firm were to experience a decrease in capital and be unable to meet requirements, it may be required to decrease its trading activity.
To the extent a clearing member were to experience a decrease in capital and be unable to meet requirements, it may be required to decrease its trading activity.
Factors that may affect our performance and demand for our data include, but are not limited to: • Our ability to maintain existing customers utilizing our data and to attract new customers with our products and services; • A decrease in overall trading volume, which may lead to a decreased demand for our market data; • A challenging business environment for our customers, which may require them to reduce their usage of our market data; • The impacts of new regulations, laws, rules or other government policies; • Our ability to ensure that customers are appropriately licensed and are paying fees for the data used; • The protection of our intellectual property rights and identification of misappropriation and/or misuses of CME Group market data, including through the use of artificial intelligence; and • Our ability to keep pace with technological developments and client preferences.
Factors that may affect our performance and demand for our data include, but are not limited to: • Our ability to maintain existing customers utilizing our data and to attract new customers with our products and services; • A challenging business environment for our customers, which may require them to reduce their usage of our market data; • The impacts of new regulations, laws, rules or other government policies; • Our ability to ensure that customers are appropriately licensed and are paying fees for the data used; • The protection of our intellectual property rights and identification of misappropriation and/or misuses of CME Group market data, including through the use of artificial intelligence; and • Our ability to keep pace with technological developments and client preferences.
Our ability to manage our risks and comply with applicable laws and regulations in the jurisdictions where we operate is largely dependent on our establishment and maintenance of effective risk management, 23 Table of Contents compliance and monitoring programs.
Our ability to manage our risks and comply with applicable laws and regulations in the jurisdictions where we operate is largely dependent on our establishment and maintenance of effective risk management, compliance and monitoring programs.
Our technology, our customers, our people and our third-party service providers are vulnerable to cyber-security threats, which could result in wrongful use of our data or our customers’ data or cause interruptions in our 18 Table of Contents operations, which could cause us to lose customers and trading volume and result in substantial liabilities.
Our technology, our customers, our people and our third-party service providers are vulnerable to cyber-security threats, which could result in wrongful use of our data or our customers’ data or cause interruptions in our operations, our customers' operations, or our third-party service providers' operations, which could cause us to lose customers and trading volume and result in substantial liabilities.
We are dependent on the revenues from the trading and clearing activities of our exchange members. In 2023, 84% o f our derivatives contract volume was derived from our members. This dependence may give them influence over how we operate our business.
We are dependent on the revenues from the trading and clearing activities of our exchange members. In 2024, 85% o f our derivatives contract volume was derived from our members. This dependence may give them influence over how we operate our business.
Many of our customers rely on third parties, such as independent software vendors, to provide them with front-end systems to access our trading platforms and other back office systems for their trade processing and risk management needs.
Many of our customers rely on third parties, such as ISVs, to provide them with front-end systems to access our trading platforms and other back office systems for their trade processing and risk management needs.
These risks include: • fluctuations in currency exchange rates; • complying with extensive and complex compliance requirements, regulations and oversight by regulators other than our primary functional regulators, including sanctions and anti-bribery laws; • difficulties in staffing and associated costs in managing multiple international locations; • general economic, social and political conditions; • protectionist laws and business practices that favor local businesses in some countries; • reduced protection for intellectual property rights in some countries; • language and cultural differences; and • potentially adverse tax consequences.
These risks include: • fluctuations in currency exchange rates; 23 Table of Contents • complying with extensive and complex compliance requirements, regulations and oversight by regulators other than our primary functional regulators; • difficulties in staffing and associated costs in managing multiple international locations; • general economic, social and political conditions; • protectionist laws and business practices that favor local businesses in some countries; • reduced protection for intellectual property rights in some countries; • language and cultural differences; and • potentially adverse tax consequences.
Some of CME Clearing's largest clearing firms have indicated their belief that clearing facilities should not be owned or controlled by exchanges and should be operated as utilities and not for profit.
Some of our clearing house's largest clearing firms have indicated their belief that clearing facilities should not be owned or controlled by exchanges and should be operated as utilities and not for profit.
Please see "Item 1A - Risk Factors - Risks Relating To Our Business" beginning on page 20 for additional information.
Please see "Item 1A - Risk Factors - Risks Relating To Our Business" beginning o n page 20 for additional information.
These risks include our failure or inability to: • provide reliable and cost-effective services to our customers; • develop, in a timely manner, the required functionality to support electronic trading in a manner that is competitive with the functionality supported by other electronic markets; • maintain the competitiveness of our fee structure; • attract independent software vendors to write front-end software that will effectively access our electronic trading systems and automated order routing system; • respond to technological developments or service offerings by competitors; and • generate sufficient revenue to justify the substantial capital investment we have made and will continue to make to enhance our electronic trading platforms and other technology offerings.
These risks include our failure or inability to: • provide reliable and cost-effective services to our customers; • develop, in a timely manner, the required functionality to support electronic trading in a manner that is competitive with the functionality supported by other electronic markets; 20 Table of Contents • maintain the competitiveness of our fee structure; • attract ISVs to write software that will allow our customers to effectively access our systems; • respond to technological developments or service offerings by competitors; and • generate sufficient revenue to justify the substantial capital investment we have made and will continue to make to enhance our electronic trading platforms and other technology offerings.
Please see "Item 1 - Business - Competition" beginning on page 10 for additional information on the competitive environment and its potential impact on our business. Our trading volume, and consequently our revenues and profits, would be adversely affected if we are unable to retain our current customers at substantially similar trading levels or attract new customers.
Please see "Item 1 - Business - Competition" beginn ing on page 10 f or additional information on the competitive environment and its potential impact on our business. 18 Table of Contents Our trading volume, and consequently our revenues and profits, would be adversely affected if we are unable to retain our current customers at substantially similar trading levels or attract new customers.
Any security attack or breach could result in system failures and delays, malfunctions in our operations, loss of customers or lower trading volume, loss of competitive position, damage to our reputation, disruption of our business, legal liability or regulatory fines and significant costs, which in turn may cause our revenues and earnings to decline.
Any security attack or breach could result in system failures and delays, malfunctions in our operations, loss of customers or lower trading volume, loss of competitive position, damage to our reputation, disruption of our business, legal liability or regulatory fines and significant 19 Table of Contents costs, which in turn may cause our revenues and earnings to decline and could have a material impact on our financial condition or results of operations.
Our broker-dealer and multilateral trading facility businesses, BrokerTec and EBS, are also extensively regulated in various jurisdictions.
Our broker-dealer and MTF businesses, BrokerTec and EBS, are also extensively regulated in various jurisdictions.
The process of integration also may produce unforeseen regulatory and operating difficulties and expenditures and may divert the attention of management from the ongoing operation of our business.
To the extent we acquire a new business, the process of integration also may produce unforeseen regulatory and operating difficulties and expenditures and may divert the attention of management from the ongoing operation of our business.
However, our security measures or those of our third-party providers, including any cloud-based technologies, such as those pursuant to our partnership with Google Cloud, may prove insufficient depending upon the attack or threat posed.
However, our security measures or those of our third-party providers, including any cloud-based technologies, may prove insufficient depending upon the attack or threat posed.
If we do not continue to enhance our electronic trading systems and technology offerings, including the development and migration of our marketplace and supporting operational and business functions to the cloud, if we are unable to develop our trading systems and technology offerings to include other products and markets, or if they do not have the required functionality, performance, availability and resilience, capacity, security and speed desired by our customers, our ability to successfully compete and our revenues and profits will be adversely affected.
If we do not continue to enhance our electronic trading systems and technology offerings, including the development and migration of our markets and supporting operational and business functions to the CME Google Cloud platform and the private Google Cloud region, if we are unable to develop our trading systems and technology offerings to include other products and markets, or if they do not have the required functionality, performance, availability and resilience, capacity, security and speed desired by our customers, our ability to successfully compete and our revenues and profits will be adversely affected, which could have a material impact on our financial condition or results of operations.
We may make acquisitions or investments or enter into strategic partnerships, joint ventures and other alliances. The market for such transactions is highly competitive, especially in light of historical merger and acquisition activity in our industry.
We intend to continue to explore and pursue acquisitions and other strategic opportunities to strengthen our business and grow our company. We may make acquisitions or investments or enter into strategic partnerships, joint ventures and other alliances. The market for such transactions is highly competitive, especially in light of historical merger and acquisition activity in our industry.
For example, our indebtedness may: • require us to dedicate a significant portion of our cash flow from operations to payments on our debt, thereby reducing the availability of cash flows to fund capital expenditures, to pursue acquisitions or investments, to pay dividends and for general corporate purposes; • increase our vulnerability to general adverse economic conditions; • limit our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry; or • place us at a competitive disadvantage against any less leveraged competitors.
For example, our indebtedness may: • require us to dedicate a significant portion of our cash flow from operations to payments on our debt, thereby reducing the availability of cash flows to fund capital expenditures, to pursue acquisitions or investments, to pay dividends and for general corporate purposes; • increase our vulnerability to general adverse economic conditions; • limit our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry; or • place us at a competitive disadvantage against any less leveraged competitors. 25 Table of Contents The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations, prospects and ability to satisfy our debt service obligations.
In extreme cases, these outcomes could adversely affect our ability to conduct our business. We maintain risk management, compliance and monitoring policies, procedures and programs that are designed to prevent, detect, deter, monitor and manage our risks, including enterprise risk, compliance and internal audit programs, but such policies, procedures and programs may not be fully effective in their operation.
We maintain risk management, compliance and monitoring policies, procedures and programs that are designed to prevent, detect, deter, monitor and manage our risks, including enterprise risk, compliance and internal audit programs, but such policies, procedures and programs may not be fully effective in their design or operation.
Such an attack may result in harm to our personnel or the closure of our facilities or render our backup data and recovery systems inoperable.
Such an attack may result in harm to our personnel or the closure of our facilities or render our backup data and recovery systems inoperable, or have similar consequences for our third party service providers.
It is impossible to accurately predict the likelihood or impact of any terrorist attack on our industry generally or on our business.
It is impossible to accurately predict the likelihood or impact of any terrorist attack against us or our third party service providers, or on our industry generally.
In addition, we have established a fund (currently $98.0 million) to provide payments, up to certain maximum levels, to qualified family farmers, ranchers and other agricultural industry participants who use our products and who suffer losses to their segregated account balances if their clearing firm becomes insolvent.
In addition, we have established a fund (currently $98.0 million) to provide payments, up to certain maximum levels, to qualified family farmers, ranchers and other agricultural industry participants who use our products and who suffer losses to their segregated account balances if their clearing firm becomes insolvent. 22 Table of Contents Our market data revenues may be reduced by decreased demand, poor overall economic conditions, regulatory changes or a significant change in how market participants trade and use market data.
We intend to continue to explore acquisitions, other investments and strategic alliances. We may not be successful in identifying opportunities or in integrating the acquired businesses.
We intend to continue to explore acquisitions, other investments and strategic alliances. We may not be successful in identifying opportunities or in integrating the acquired businesses. Any such transaction may not produce the results we anticipate, which could adversely affect our business and our stock price.
Any of these events could have a material adverse effect on our business, financial condition, and operating results. 19 Table of Contents RISKS RELATING TO OUR BUSINESS Damage to our reputation or brand could harm our business.
Any of these events could have a material adverse effect on our business, financial condition, and operating results. RISKS RELATING TO OUR BUSINESS Damage to our reputation or brand could harm our business. Maintaining our reputation and brand is critical to attracting and retaining customers, investors and employees and to maintaining our relationships with our regulators and other government officials.
System failure or degradation could lead our customers to file formal complaints with industry regulatory organizations, to file lawsuits against us or to cease doing business with us or could lead our regulators to initiate inquiries or proceedings for failure to comply with applicable laws and regulations.
Increased trading volume and order messaging traffic may result in connectivity problems or erroneous reports that may affect users of our platforms. 21 Table of Contents System failure or degradation could lead our customers to file formal complaints with industry regulatory organizations, to file lawsuits against us or to cease doing business with us or could lead our regulators to initiate inquiries or proceedings for failure to comply with applicable laws and regulations.
We attempt to protect our proprietary technology and intellectual property rights by relying on trademarks, copyright, database rights, trade secrets, restrictions on disclosure, and other methods.
Our patents cover match engine, trader user interface, trading floor support, market data, general technology and clearing house functionalities. We attempt to protect our proprietary technology and intellectual property rights by relying on patents, trademarks, copyright, database rights, trade secrets, restrictions on disclosure, and other methods.
Our failure to maintain our ratings could adversely affect the cost and other terms upon which we are able to obtain funding and increase our cost of capital.
As a result, there can be no assurance that we will maintain our current ratings. In the past, we have experienced ratings downgrades. Our failure to maintain our ratings could adversely affect the cost and other terms upon which we are able to obtain funding and increase our cost of capital.
Our risk management, compliance and monitoring programs might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results. In the normal course of our business, we discuss matters with our regulators, including during supervisory engagements and regulatory examinations, and we are subject to their inquiry and oversight.
In the normal course of our business, we discuss matters with our regulators, including during supervisory engagements and regulatory examinations, and we are subject to their inquiry and oversight.
Our inability to offer products based on these indexes could have a negative impact on our contract volume and revenues. A failure to protect our intellectual property rights, or allegations that we have infringed the intellectual property rights of others, could adversely affect our business.
A failure to protect our intellectual property rights, or allegations that we have infringed the intellectual property rights of others, could adversely affect our business. Our business is dependent on proprietary technology and intellectual property that we own or license from third parties.
Therefore, any increases or decreases in the value of the U.S. dollar against the other currencies may affect our operating income and the value of balance sheet items denominated in foreign currencies. The E.U.-U.K. Trade and Cooperation Agreement was effective on January 1, 2021.
Therefore, any increases or decreases in the value of the U.S. dollar against the other currencies may affect our operating income and the value of balance sheet items denominated in foreign currencies. Our risk management, compliance and monitoring programs might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results.
The use of certain artificial intelligence technology can give rise to intellectual property risks, including compromises to proprietary intellectual property and intellectual property infringement.
The use of certain artificial intelligence technology can give rise to intellectual property risks, including claims that the data used to train, or in connection with certain models infringes the intellectual property rights of the owner of such data.
Revenues from our market data and information services represent ed 12% o f our total revenues during the years ended December 31, 2023 and December 31, 2022.
We offer a wide range of data services designed to support the trading, risk management, investment and business needs of our customers. Revenues from our market data and information services represe nted 12% of our total revenues during the years ended December 31, 2024 and December 31, 2023.
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Maintaining our reputation and brand is critical to attracting and retaining customers, investors and employees and to maintaining our relationships with our regulators and other government officials.
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In extreme cases, these outcomes could adversely affect our ability to conduct our business.
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Increased trading volume and order messaging traffic may result in connectivity problems or erroneous reports that may affect users of our platforms.
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A significant percentage of our contract volume and revenue is based on indexes derived from third-party price reporting agencies. If such third parties take actions that result in the loss of protection for those intellectual property rights or changes in intellectual property laws yield that result, it could have a negative impact on our contract volume and revenues.
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Our market data revenues may be reduced by decreased demand, poor overall economic conditions, regulatory changes or a significant change in how market participants trade and use market data. We offer a wide range of data services designed to support the trading, risk management, investment and business needs of our customers.
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Any such transaction may not produce the results we anticipate, which could adversely affect our business and our stock price. 22 Table of Contents We intend to continue to explore and pursue acquisitions and other strategic opportunities to strengthen our business and grow our company.
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OSTTRA, our joint venture with IHS Markit (now a part of S&P Global), is subject to many of these risks, including the potential we may not achieve the expected cost savings, synergies and other strategic benefits from the transaction within the anticipated time frames, that the joint venture may be more costly than expected, or that we may experience customer attrition.
Removed
As a result of Brexit, we have established a CME Group business in the Netherlands, a member of the European Union, which allows BrokerTec and EBS to continue trading in regulated financial instruments to customers in the European Economic Area; however, this has resulted in, and may continue to result in, increased legal, compliance and operational costs.
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We are significantly dependent on the contract volume of products that are based on intellectual property rights of indexes derived from third-party price reporting agencies. To comply with CFTC core principles, we must be able to demonstrate that our products may not be readily susceptible to manipulation.
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Our business is dependent on proprietary technology and other intellectual property that we own or license from third parties. We own the rights to a large number of trademarks, service marks, domain names and trade names in the U.S., Europe, and other parts of the world.
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The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations, prospects and ability to satisfy our debt service obligations.
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In light of the difficulties in the financial services industry and the financial markets over the last few years, there can be no assurance that we will maintain our current ratings. In the past, we have experienced ratings downgrades.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis Cyber Defense team consists of subject matter experts from GIS and Information Governance, who work together to monitor and respond to cybersecurity incidents. The IRP outlines our cyber and incident response policies and governs our incident response lifecycle, which divides overall incident response into serial phases.
Biggest changeThe IRP outlines our cyber and incident response policies and governs our incident response lifecycle, which divides overall incident response into serial phases. The Crisis Management Team (CMT) is responsible for oversight during an incident, in conjunction with the Cyber Coordination Team (CCT).
We manage cybersecurity risk to the organization as part of our business strategy, risk management and financial functions in alignment with our overall Enterprise Risk Management Program and regularly engage with the risk committee of the board of directors and the board of directors as a whole regarding the effectiveness of the GIS Program.
We manage cybersecurity risk to the organization as part of our business strategy, risk management and financial functions in alignment with our overall Enterprise Risk Management Program and regularly engage with the risk committee of the board of directors and the board of directors as a whole regarding the effectiveness of the GIS Program and the management of our cybersecurity risks.
Our GIS team is comprised of over 200 full-time employees, many of which hold cybersecurity, risk, or management certifications, such as Certified Information Systems Security Professional, Certified Information Security Manager, Certified in Risk and Information Systems Control, Series 99, Certified Information Systems Auditor, Project Management Professional, various cloud provider certifications and various levels of ITIL certifications.
Our GIS team is comprised of over 200 full-time employees, many of whom hold cybersecurity, risk, or management certifications, such as Certified Information Systems Security Professional, Certified Information Security Manager, Certified in Risk and Information Systems Control, Series 99, Certified Information Systems Auditor, Project Management Professional, various cloud provider certifications and various levels of ITIL certifications.
The GIS Program is led by CME Group’s Chief Information Security Officer (CISO), who has worked in various roles in information security for over 20 years, and has led our GIS Program for more than four years since joining the company in 2016 in a senior role in GIS.
The GIS Program is led by CME Group’s Chief Information Security Officer (CISO), who has worked in various roles in information security for over 20 years and has led our GIS Program for more than five years since joining the company in 2016 in a senior role in GIS.
We implement technical, physical and administrative safeguards to protect the confidential and sensitive information of our clients, employees and other information under CME Group’s stewardship.
We implement technical, physical and administrative safeguards to protect the confidential and sensitive information of our clients, third parties, employees and other information under CME Group’s stewardship.
As part of our GIS Program, CME Group operates a state-of-the-art Cyber Defense Center that virtually links 24/7 to our international operational cybersecurity teams and serves as a global hub for cybersecurity risk management activities, including log collection, event monitoring, threat detection and incident response, resiliency, operations, vulnerability management and the proactive collection and processing of 26 Table of Contents both open source and proprietary threat and intelligence feeds allowing the company to efficiently manage, investigate and respond to cybersecurity events.
As part of our GIS Program, CME Group operates a Cyber Defense Center that virtually links 24/7 to our international cybersecurity teams and serves as a global hub for cybersecurity risk management activities, including log collection, event monitoring, threat detection and incident response, resiliency, operations, vulnerability management and the proactive collection and processing of both open source and proprietary threat and intelligence feeds allowing the company to efficiently manage, investigate and respond to cybersecurity events.
The teams monitor cyber-related incidents and known third party vulnerabilities with the goal of enhancing processes, improving risk management and partnering on exit planning and testing for certain vendors associated with essential functions. • We have insurance against certain cybersecurity and privacy risks and attacks. • We are an active participant in the financial services industry and government forums and information sharing programs, designed to improve both internal and sector cybersecurity defense.
The teams conduct initial due diligence on vendors and monitor cyber-related incidents and known vulnerabilities with the goal of enhancing processes, improving risk management and partnering on exit planning and testing for certain vendors associated with essential functions. • We have insurance against certain cybersecurity and privacy risks and attacks. • We are an active participant in the financial services industry and government forums and information sharing programs, designed to improve both internal and sector cybersecurity defense.
The strategy incorporates multiple layers of controls, including, monitoring, vulnerability management, identity and access management and security assessments. • Our program is based on the National Institute of Standards and Technology Cybersecurity Framework (NIST) and other technical standards and frameworks. • We have a robust cybersecurity defense response plan that provides a documented framework for handling security incidents and facilitates coordination across multiple parts of the company. • We invest in threat intelligence and operate a state-of-the-art Cyber Defense Center, which acts as our hub of information sharing and threat intelligence analysis. • We incorporate external expertise and reviews into our cybersecurity risk management program and continue to engage a leading professional consulting firm to assist our company in incorporating cybersecurity best practices. • We provide annual cybersecurity awareness and ongoing phishing training, such as routinely performing cybersecurity attack simulation exercises, which includes participation from various levels of management. • Following a risk-based approach, we conduct due diligence reviews of our third party providers for potential cybersecurity risks to the company.
The strategy incorporates multiple layers of controls, including, monitoring, vulnerability management, identity and access management and security assessments. • Our program is aligned with the National Institute of Standards and Technology Cybersecurity Framework (NIST) and other technical standards and frameworks. • We have a robust cybersecurity defense response plan that provides a documented framework for handling security incidents and facilitates coordination across multiple parts of the company. • We invest in threat intelligence and operate a Cyber Defense Center, which acts as our hub of information sharing and threat intelligence analysis. • We incorporate external expertise and reviews into our cybersecurity risk management program and continue to engage leading professional consulting firms to assist our company in incorporating cybersecurity best practices. 27 Table of Contents • We provide annual cybersecurity awareness and ongoing phishing training, and we routinely conduct cybersecurity attack simulation exercises, which includes participation from various levels of management. • Following a risk-based approach, we conduct due diligence reviews of our third party providers for potential cybersecurity risks to the company.
We also engage with a leading professional consulting firm to provide regular updates to the board on cybersecurity-related risks in the evolving threat landscape and to provide education on best practices for board oversight of our GIS Program.
We also engage with leading professional consulting firms to provide periodic updates to the board on cybersecurity-related risks in the evolving threat landscape and to provide education on best practices for board oversight of our GIS Program.
Its intent is to safeguard the confidentiality, integrity and availability of our information and services. The GIS Program is designed to strengthen the integrity of the global markets we support, protect CME Group’s information assets, maintain client and employee trust, support our pursuit of strategic objectives, contribute to shareholder value and preserve our reputation and brand.
The GIS Program is designed to strengthen the integrity of the global markets we support, protect CME Group’s information assets, maintain client, third party and employee trust, support our pursuit of strategic objectives, contribute to shareholder value and preserve our reputation and brand.
Our GIS team conducts analyses and aims to prevent, detect and respond to systemic events that might threaten our company, industry or the economy. The GIS Program includes a Cyber Defense team, which manages the Incident Response Plan (IRP).
Our GIS team conducts analyses and aims to prevent, detect and respond to systemic events that might threaten our company, industry or the economy. The GIS Program includes a Cyber Defense team, which manages the Incident Response Plan (IRP), and consists of subject matter experts from GIS and Information Governance, who work together to monitor and respond to cybersecurity incidents.
ITEM 1C. CYBERSECURITY As a highly regulated global financial services company, we understand the substantial operational risks for companies in our industry as well as the importance of protecting the information and data of our clients and employees. As such, our Global Informational Security (GIS) Program is designed and operated to mitigate information security risks and threats to the company.
ITEM 1C. CYBERSECURITY As a highly regulated global financial services company, we understand the substantial operational risks for companies in our industry as well as the importance of protecting the information and data of our clients, third parties and employees and the resilience of our systems.
Testing activities support a variety of regulatory requirements and external industry certifications held by CME Group. 27 Table of Contents The board provides oversight of cybersecurity risks and has designated primary responsibility to the risk committee who oversees our information security programs, including cybersecurity, and is actively involved in monitoring the progress of key cybersecurity initiatives.
The board provides oversight of cybersecurity risks and has designated primary responsibility to the risk committee which oversees our information security programs, including cybersecurity, and is actively involved in monitoring the progress of key cybersecurity initiatives.
Our Enterprise Risk Management (ERM) team oversees our Third Party Risk Management (TPRM) program, which partners with our GIS, Information Governance, and Operational Resilience groups to manage and monitor third party risk of CME Group vendors and certain third parties of customers (fourth parties).
We also maintain a cross-functional Third Party Risk Management program, which partners with our GIS, Information Governance, and Operational Resilience teams, among others, to manage and monitor third party risk presented by CME Group vendors and certain third parties of third parties (fourth parties).
The Crisis Management Team (CMT) is responsible for oversight during an incident, in conjunction with the Cyber Coordination Team (CCT). The CCT manages responses to cybersecurity and compliance incidents, collaborating with subject matter experts (SMEs) from various departments in response to specific incidents.
The CCT manages responses to cybersecurity and compliance incidents, collaborating with subject matter experts from various departments in response to specific incidents.
Gaps and opportunities identified through testing are assigned to certain members of management and tracked through to closure.
Remediation of gaps and opportunities identified through testing are tracked through to closure. Testing activities support a variety of regulatory requirements and external industry certifications held by CME Group.
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Historically, and at the time of this filing, we have not experienced cybersecurity incidents that were deemed by the company to be material individually or in the aggregate, or reasonably likely to be material, but we have experienced cyber attacks of varying degrees in the past.
Added
As such, our Global Informational Security (GIS) Program is designed and operated to mitigate information security risks and threats to the company. Its intent is to safeguard the confidentiality, integrity and availability of our information and services.
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To date, the company is not aware of risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the company, including our business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located at 20 South Wacker Drive, Chicago, IL, where we lease approximately 545,000 square feet of general office space. This lease expires in 2032. Our European headquarters are located at the London Fruit & Wool Exchange at 1 Duval Square, London, where we lease approximately 120,000 square feet of general office space.
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located at 20 South Wacker Drive, Chicago, IL, where we lease approximately 530,000 square feet of general office space. This lease expires in 2032. Our European headquarters are located at the London Fruit & Wool Exchange at 1 Duval Square, London, where we lease approximately 120,000 square feet of general office space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS See "Legal and Regulatory Matters" in note 12. Contingencies to the consolidated financial statements beginning on page 74 for CME Group’s legal proceedings disclosure, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS See "Legal and Regulatory Matters" in note 12. Contingencies to the consolidated financial statements beginning on page 76 for CME Group’s legal proceedings disclosure, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 28 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe stock price performance included in this graph is not necessarily indicative of future stock price performance. 2019 2020 2021 2022 2023 CME Group Inc. $ 109.67 $ 102.73 $ 133.02 $ 102.56 $ 134.67 S&P 500 131.49 155.68 200.37 164.08 207.21 Peer Group 131.21 154.03 184.43 160.15 195.00 Unregistered Sales of Equity Securities Not applicable. 29 Table of Contents Issuer Purchases of Equity Securities Period in 2023 Total Number of Shares (or Units) Purchased (1) Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (in millions) October 1 to October 31 389 $ 214.25 — $ — November 1 to November 30 — — — — December 1 to December 31 14,268 210.09 — — Total 14,657 — _______________ (1) Shares purchased consist of an aggregate o f 14,657 shares of Class A common stock surrendered to satisfy employee tax obligations upon the vesting of restricted stock.
Biggest changeAn investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock, in the peer group and the S&P 500 index on December 31, 2019 and its relative performance is tracked through December 31, 2024. 29 Table of Contents The stock price performance included in this graph is not necessarily indicative of future stock price performance. 2020 2021 2022 2023 2024 CME Group Inc. $ 93.66 $ 121.26 $ 93.50 $ 122.76 $ 141.71 S&P 500 118.40 152.39 124.79 157.59 197.02 Peer Group 117.40 140.56 122.06 148.62 172.05 Unregistered Sales of Equity Securities Not applicable. 30 Table of Contents Issuer Purchases of Equity Securities Period in 2024 Total Number of Shares (or Units) Purchased (1) Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (in millions) October 1 to October 31 — $ — — $ — November 1 to November 30 150 233.42 — — December 1 to December 31 15,919 233.54 — — Total 16,069 — _______________ (1) Shares purchased consist of an aggregate o f 16,069 shares of Class A common stock surrendered to satisfy employee tax obligations upon the vesting of restricted stock.
As of February 7, 2024, there were approximately 1,530 holders of record of our Class B common stock. Preferred Stock In 2021, we issued and sold in a private placement approximately 4.6 million shares of Series G Non-Voting Convertible Preferred Stock.
As of February 12, 2025, there were approximately 1,480 holders of record of our Class B common stock. Preferred Stock In 2021, we issued and sold in a private placement approximately 4.6 million shares of Series G Non-Voting Convertible Preferred Stock.
Series G Non-Voting Convertible Preferred Stock has the same equitable interest in our 28 Table of Contents earnings and the same dividend payments per share as our Class A shares on an as converted basis. As of February 7, 2024, there was one holder of record of our Series G Non-Voting Convertible Preferred Stock.
Series G Non-Voting Convertible Preferred Stock has the same equitable interest in our earnings and the same dividend payments per share as our Class A shares on an as converted basis. As of February 12, 2025, there was one holder of record of our Series G Non-Voting Convertible Preferred Stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Class A Common Stock Our Class A common stock is currently listed on Nasdaq under the ticker symbol "CME." As of February 7, 2024, there were approximately 4,100 holders of record of our Class A common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Class A Common Stock Our Class A common stock is currently listed on Nasdaq under the ticker symbol "CME." As of February 12, 2025, there were approximately 3,870 holders of record of our Class A common stock.
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An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock, in the peer group and the S&P 500 index on December 31, 2018 and its relative performance is tracked through December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(dollars in millions) Year- over-Year Change Change as a Percentage of 2022 Expenses Non-qualified deferred compensation $ 33.2 2 % Technology support services 29.7 1 Salaries, benefits and employer taxes 28.7 1 Currency fluctuation 26.1 1 Legal Fees 13.5 1 Employee separation and restructuring 10.3 1 Other expenses, net (1.8) — Total $ 139.7 7 % 41 Table of Contents Overall operating expenses increased in 2023 when compared with 2022 due to the following reasons: • An increase in our non-qualified deferred compensation liability during 2023, the impact of which does not affect net income because of an equal and offsetting change in investment income, contributed to increases in compensation and benefits expenses. • The increases in expenses related to technology support services were primarily driven by higher software license fees and third party services to support the ongoing Google Cloud transformation project. • Salaries, benefits and employer taxes expenses were higher during 2023 than 2022 due to increases in headcount during the year, which were primarily attributable to additional headcount in the company's international locations. • In 2023, we recognized a net loss of $12.9 million, compared to a net gain of $13.2 million in 2022, as a result of currency exchange fluctuations and realized foreign currency translation from entity liquidations done to simplify the corporate structure.
Biggest change(dollars in millions) Year- over-Year Change Change as a Percentage of 2023 Expenses Technology support services $ 37.0 2 % License fees 32.7 2 Salaries, benefits and employer taxes 27.2 2 Occupancy and building operations (11.5) (1) Professional fees and outside services (11.7) (1) Employee separation and restructuring (12.5) (1) Other expenses, net (5.8) — Total $ 55.4 3 % Overall operating expenses increased in 2024 when compared with 2023 due to the following reasons: • The increase in expenses related to technology support services was primarily driven by higher software license fees and third party services to support the ongoing Google Cloud transformation project. • License fees expense was higher primarily due to an increase in volume for certain equity products and improved revenue performance related to certain other incentive arrangements. • Salaries, benefits and employer taxes was higher due to an increase in headcount during the year, which was primarily attributable to additional headcount in the company's international locations.
Customers include both members of the exchange and non-members. We offer our customers the opportunity to trade futures contracts and options contracts on a range of products, including those based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy and metals. Through our cash markets business, we offer fixed income trading through BrokerTec and foreign currency trading through EBS.
Customers include both members of the exchange and non-members. We offer our customers the opportunity to trade futures contracts and options contracts on a range of products, including those based on interest rates, equity indexes, foreign exchange, energy, metals and agricultural commodities. Through our cash markets business, we offer fixed income trading through BrokerTec and foreign currency trading through EBS.
Our DCMs are in compliance with all DCM financial requirements. BrokerTec Americas LLC is required to maintain sufficient net capital under Securities Exchange Act of 1934, as amended (Exchange Act), Rule 15c3-1 (the Net Capital Rule).
Our DCMs are in compliance with all DCM financial requirements. BrokerTec Americas LLC is required to maintain sufficient net capital under the Securities Exchange Act of 1934, as amended (Exchange Act), Rule 15c3-1 (the Net Capital Rule).
We may use the proceeds to provide temporary liquidity in the unlikely event a clearing firm fails to promptly discharge an obligation to CME Clearing, in the event of a liquidity constraint or default by a depositary (custodian for our collateral), in the event of a temporary disruption with the domestic payments system that would delay payment of settlement variation between us and our clearing firms, or in other cases as provided by the CME rulebook.
We may use the proceeds to provide temporary liquidity in the unlikely event a clearing firm fails to promptly discharge an obligation to the clearing house, in the event of a liquidity constraint or default by a depositary (custodian for our collateral), in the event of a temporary disruption with the domestic payments system that would delay payment of settlement variation between us and our clearing firms, or in other cases as provided by the CME rulebook.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows: • Executive Summary : Includes an overview of our business; current economic, competitive and regulatory trends relevant to our business; our current business strategy; and our primary sources of operating and non-operating revenues and expenses. • Critical Accounting Policies : Provides an explanation of accounting policies that may have a significant impact on our financial results and the estimates, assumptions and risks associated with those policies. • Results of Operations : Includes an analysis of our 2023 financial results and a discussion of any known events or trends that are likely to impact future results. • Liquidity and Capital Resources : Includes a discussion of our future cash requirements, capital resources, significant planned expenditures and financing arrangements.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows: • Executive Summary : Includes an overview of our business; current economic, competitive and regulatory trends relevant to our business; our current business strategy; and our primary sources of operating and non-operating revenues and expenses. • Critical Accounting Policies : Provides an explanation of accounting policies that may have a significant impact on our financial results and the estimates, assumptions and risks associated with those policies. • Results of Operations : Includes an analysis of our 2024 financial results and a discussion of any known events or trends that are likely to impact future results. • Liquidity and Capital Resources : Includes a discussion of our future cash requirements, capital resources, significant planned expenditures and financing arrangements.
Debt Instruments The following table summarizes our debt outstanding as of December 31, 2023: (in millions) Par Value Fixed rate notes due March 2025, stated rate of 3.00% (1) $ 750.0 Fixed rate notes due June 2028, stated rate of 3.75% $ 500.0 Fixed rate notes due March 2032, stated rate of 2.65% $ 750.0 Fixed rate notes due September 2043, stated rate of 5.30% (2) $ 750.0 Fixed rate notes due June 2048, stated rate of 4.15% $ 700.0 _______________ (1) We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.11%.
Debt Instruments The following table summarizes our debt outstanding as of December 31, 2024: (in millions) Par Value Fixed rate notes due March 2025, stated rate of 3.00% (1) $ 750.0 Fixed rate notes due June 2028, stated rate of 3.75% 500.0 Fixed rate notes due March 2032, stated rate of 2.65% 750.0 Fixed rate notes due September 2043, stated rate of 5.30% (2) 750.0 Fixed rate notes due June 2048, stated rate of 4.15% 700.0 _______________ (1) We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable on the notes effectively became fixed at a rate of 3.11%.
It is also possible that we may need to raise additional funds to finance our activities through future public debt offerings or by direct borrowings from financial institutions through our committed revolving credit facilities. Cash will also be required for non-cancellable purchase obligations as at December 31, 2023. Commitments include material contractual purchase obligations that are non-cancellable.
It is also possible that we may need to raise additional funds to finance our activities through future public debt offerings or by direct borrowings from financial institutions through our committed revolving credit facilities. Cash will also be required for non-cancellable purchase obligations as at December 31, 2024. Commitments include material contractual purchase obligations that are non-cancellable.
The following table summarizes our credit ratings as of December 31, 2023: Rating Agency Short-Term Debt Rating Long-Term Debt Rating Outlook Standard & Poor’s A1+ AA- Stable Moody’s Investors Service P1 Aa3 Stable Given our cash flow generation, our ability to pay down debt levels and our ability to refinance existing debt facilities, if necessary, we expect to maintain an investment grade rating.
The following table summarizes our credit ratings as of December 31, 2024: Rating Agency Short-Term Debt Rating Long-Term Debt Rating Outlook Standard & Poor’s A1+ AA- Stable Moody’s Investors Service P1 Aa3 Stable Given our cash flow generation, our ability to pay down debt levels and our ability to refinance existing debt facilities, if necessary, we expect to maintain an investment grade rating.
Competition is influenced by our brand and reputation; the efficiency and security of our clearing. settlement and support services; depth and liquidity of our markets; diversity of product offerings, including frequency and quality of new product development and innovative services; our ability to position and expand upon existing products to address changing market needs; efficient and seamless customer experience; transparency, reliability, anonymity and security of transaction processing; the regulatory environment; connectivity, accessibility, flexibility in execution methods, and distribution; and technology capability and innovation, as well as overall transaction costs.
Competition is influenced by our brand and reputation; the efficiency and security of our clearing, settlement and support services; depth and liquidity of our markets; capital and margin efficiencies; diversity of product offerings, including frequency and quality of new product development and innovative services; our ability to position and expand upon existing products to address changing market needs; efficient and seamless customer experience; transparency, reliability, anonymity and security of transaction processing; the regulatory environment; connectivity, accessibility, flexibility in execution methods, and distribution; and technology capability and innovation, as well as overall transaction costs.
The regulatory environment to which we are subject is discussed in "Item 1 - Business" beginning on page 11 . Business Strategy Our strategy focuses on maximizing futures and options growth globally, diversifying our business and revenues and delivering unparalleled customer efficiencies and operational excellence, including through our partnership with Google Cloud.
The regulatory environment to which we are subject is discussed in "Item 1 - Business" beginning on page 12 . Business Strategy Our strategy focuses on maximizing futures and options growth globally, diversifying our business and revenues and delivering unparalleled customer efficiencies and operational excellence, including through our partnership with Google Cloud.
In establishing these policies within the framework of accounting principles generally accepted in the U.S., management must make certain assessments, estimates and choices that will result in the application of these principles in a manner that appropriately reflects our financial condition and results of operations.
In establishing these policies within the framework of accounting principles generally accepted in the United States (U.S.), management must make certain assessments, estimates and choices that will result in the application of these principles in a manner that appropriately reflects our financial condition and results of operations.
Our exchange-traded derivatives exchanges and other businesses are regulated and we serve a customer base that includes regulated institutions and individuals. Developments in the regulatory environment have the potential to significantly impact our business. Compliance with regulations may require us and our customers to dedicate significant financial and operational resources, which could adversely affect our profitability.
Regulatory Environment. Our exchange-traded derivatives exchanges and other businesses are regulated and we serve a customer base that includes regulated institutions and individuals. Developments in the regulatory environment have the potential to significantly impact our business. Compliance with regulations may require us and our customers to dedicate significant financial and operational resources, which could advers ely affect our profitability.
Due to the relationship between average rate per contract and contract volume, the change in clearing and transaction fees attributable to changes in each is only an approximation. 37 Table of Contents Contract Volume The following table summarizes average daily contract volume.
Due to the relationship between average rate per contract and contract volume, the change in clearing and transaction fees attributable to changes in each is only an approximation. 38 Table of Contents Contract Volume The following table summarizes average daily contract volume.
Other Sources of Revenue Market data and information services. In 2023 when compared with 2022, the increase in market data and information services revenue was largely attributable to price increases for certain products as well as an increase in usage for certain products.
Other Sources of Revenue Market data and information services. In 2024 when compared with 2023, the increase in market data and information services revenue was largely attributable to price increases for certain products as well as an increase in usage for certain products.
This strategy allows us to continue to develop into a more broadly diversified financial exchange that provides trading and clearing solutions across a wide range of products and asset classes. Our strategic initiatives are discussed in "Item 1 - Business" beginning on page 7 . Revenues Clearing and transaction fees.
This strategy allows us to continue to develop into a more broadly diversified financial exchange that provides trading and clearing solutions across a wide range of products and asset classes. Our strategic initiatives are discussed in "Item 1 - Business" beginning o n page 7 . Revenues Clearing and transaction fees.
Other revenues . In 2023 when compared with 2022, the increase in other revenue was largely attributable to higher custody fees as well as an increase in co-location and other connectivity fees.
Other revenues . In 2024 when compared with 2023, the increase in other revenue was largely attributable to higher custody fees as well as an increase in co-location and other connectivity fees.
Stock-based compensation varies depending on the quantity and fair value of awards granted. The fair value of restricted stock awards and other performance share grants is based on either the share price on the date of the grant or a model of expected future stock prices. Professional fees and outside services.
Stock-based compensation varies depending on the quantity and fair value of awards granted. The fair value of restricted stock awards 34 Table of Contents and other performance share grants is based on either the share price on the date of the grant or a model of expected future stock prices. Professional fees and outside services.
Trading activity in our centralized markets has fluctuated due to the ongoing uncertainty in the financial markets, fluctuations in the availability of credit, variations in the amount of assets under management as well as the Federal Reserve Bank’s interest rate policy.
Trading activity in our centralized markets has fluctuated due to the ongoing uncertainty in the financial markets, fluctuations in the availability of credit, variations in the amount of assets under management as well as the 32 Table of Contents Federal Reserve Bank’s interest rate policy.
Clearing and transaction fees for cash markets business . Our cash markets business provides matching services whereby we match a buyer and seller of financial instruments to allow both parties to complete the trade bilaterally or through a third-party clearing house.
Our cash markets business provides matching services whereby we match a buyer and seller of financial instruments to allow both parties to complete the trade bilaterally or through a third-party clearing house.
We compete in a large and expanding financial services trading, clearing and settlement marketplace globally. As markets continue to evolve, we will continue to adapt our trading technology and clearing services to meet the needs of our customers. The competitive environment to which we are subject is discussed in "Item 1 - Business" beginning on page 10 . Regulatory Environment.
We compete in a large and expanding financial services trading, clearing and settlement marketplace globally. As markets continue to evolve, we will continue to adapt our trading technology and clearing services to meet the needs of our customers. The competitive environment to which we are subject is discussed in "Item 1 - Business" beginning o n page 10 .
The firm began operating as a (k)(2)(i) broker-dealer in November 2017 following notification to the Financial Industry Regulatory Authority and the SEC. A company operating under the (k)(2)(i) exemption is not required to lock up customer funds as would otherwise be required under Exchange Act Rule 15c3-3. 45 Table of Contents
The firm began operating as a (k)(2)(i) broker-dealer in November 2017 following notification to the Financial Industry Regulatory Authority and the SEC. A company operating under the (k)(2)(i) exemption is not required to lock up customer funds as would otherwise be required under Exchange Act Rule 15c3-3.
For a comparison of our results of operations for the fiscal years ended December 31, 2022 to December 31, 2021, see "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 27, 2023.
For a comparison of our results of operations for the fiscal years ended December 31, 2023 to December 31, 2022, see "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024.
We recognize potential liabilities for anticipated tax audit issues in the United States and other applicable foreign tax jurisdictions using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken or expected to be taken.
We recognize potential liabilities for anticipated tax audit issues in the U.S. and other applicable foreign tax jurisdictions using a more-likely-than-not recognition threshold based on the technical merits of the tax position taken or expected to be taken.
We expect competition to continue to intensify, especially in light of ongoing regulatory reform in the financial services industry.
We expect competition to continue to intensify, especially in light of ongoing regulatory development in the financial services industry.
Under the performance criteria of our annual incentive plans, the bonus funded under the plans is based on achieving certain financial performance 33 Table of Contents targets established by the compensation committee of our board of directors.
Under the performance criteria of our annual incentive plans, the bonus funded under the plans is based on achieving certain financial performance targets established by the compensation committee of our board of directors.
Liquidity and Cash Management Cash and cash equivalents, excluding restricted cash, totaled $2.9 billion and $2.7 billion at December 31, 2023 and December 31, 2022, respectively. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our corporate investment policy and alternative investment choices.
Liquidity and Cash Management Cash and cash equivalents, excluding restricted cash, totaled $2.9 billion at both December 31, 2024 and December 31, 2023. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our corporate investment policy and alternative investment choices.
However, the amount of the actual contribution is contingent on various factors, including the actual rate of return on our plan assets during 2024 and the December 31, 2024 discount rate. Regulatory Requirements CME is regulated by the CFTC as a derivatives clearing organization (DCO).
However, the amount of the actual contribution is contingent on various factors, including the actual rate of return on our plan assets during 2025 and the December 31, 2025 discount rate. 46 Table of Contents Regulatory Requirements CME is regulated by the CFTC as a derivatives clearing organization (DCO).
Investment income is influenced by market interest rates, changes in the levels of cash performance bonds deposited by clearing firms, the amount of dividends distributed by our strategic investments and the availability of funds generated by operations. • Interest and other borrowing costs expense includes charges associated with various short-term and long-term funding facilities, including commitment fees on lines of credit agreements. • Equity in net earnings (losses) of unconsolidated subsidiaries includes income and losses from our investments in S&P Dow Jones Indices LLC, OSTTRA, Shanghai CFETS-NEX International Money Broking Co., Ltd. and Dubai Mercantile Exchange. 34 Table of Contents • Other income (expense) includes expenses related to the distribution of a portion of interest earned on performance bond collateral reinvestment to the clearing firms, gains and losses on derivative contracts and other various income and expenses outside our core operations.
Investment income is influenced by market interest rates, changes in the levels of cash performance bonds deposited by clearing firms, the amount of dividends distributed by our strategic investments and the availability of funds generated by operations. • Interest and other borrowing costs expense includes charges associated with various short-term and long-term funding facilities, including commitment fees on lines of credit agreements. • Equity in net earnings (losses) of unconsolidated subsidiaries includes income and losses from our investments in S&P Dow Jones Indices LLC, OSTTRA, Shanghai CFETS-NEX International Money Broking Co., Ltd. and Gulf Mercantile Exchange. • Other income (expense) includes expenses related to the distribution of a portion of interest earned on performance bond collateral reinvestment to the clearing firms, gains and losses on derivative contracts and other various income and expenses outside our core operations. 35 Table of Contents CRITICAL ACCOUNTING POLICIES The notes to our consolidated financial statements include disclosure of our significant accounting policies.
These documents, however, do contain other customary financial and operating covenants that place restrictions on the operations of the company that could indirectly affect the ability to pay dividends. 44 Table of Contents At December 31, 2023, we have excess borrowing capacity for general corporate purposes of approximately $2.3 billion under our multi-currency revolving senior credit facility.
These documents, however, do contain other customary financial and operating covenants that place restrictions on the operations of the company that could indirectly affect the ability to pay dividends. At December 31, 2024, we have excess borrowing capacity for general corporate purposes of approximatel y $2.3 billion under our multi-currency revolving senior credit facility.
Each year, capital expenditures are incurred for improvements to and modification of our offices, remote data centers, telecommunications network and other operating equipment. In 2024, we expect capital expenditures to total approximately $85 million, net of any leasehold improvement allowances. We continue to monitor our capital needs and may revise our forecasted expenditures as necessary in the future.
Each year, capital expenditures are incurred for improvements to and modification of our offices, remote data centers, telecommunications network and other operating equipment. In 2025, we expect capital expenditures to total approximately $90.0 million, n et of any leasehold improvement allowances. We continue to monitor our capital needs and may revise our forecasted expenditures as necessary in the future.
We are also required to comply with restrictions contained in the general corporation laws of our state of incorporation, which could limit our ability to declare and pay dividends. On February 8, 2024, the company declared a regular quarterly dividend of $1.15 per share for all outstanding common and preferred shares.
We are also required to comply with restrictions contained in the general corporation laws of our state of incorporation, which could limit our ability to declare and pay dividends. On February 6, 2025, the company declared a regular quarterly dividend of $1.25 per sh are for all outstanding common and preferred shares.
We incur additional ongoing expenses for communications, technology support services and various other activities necessary to support our operations. • Technology expense consists of costs related to maintenance of the hardware and software required to support our technology.
We incur additional ongoing expenses for technology, licensing and other fee agreements and various other activities necessary to support our operations. • Technology expense consists of costs related to maintenance of the hardware and software required to support our technology.
Cash Markets Business Total clearing and transaction fees revenue in 2023 included $284.7 million of transaction fees attributable to the cash markets business, compared with $318.8 million in 2022. This revenue primarily includes BrokerTecs's fixed income volume and EBS foreign exchange volume.
Cash Markets Business Total clearing and transaction fees revenue in 2024 included $276.7 million of transaction fees attributable to the cash markets business, compared with $284.7 million in 2023. This revenue primarily includes transaction fees from BrokerTecs's fixed income volume and EBS foreign exchange volume.
Additionally, the substitution of our clearing house as the counterparty to every transaction allows our customers to establish a position with one party and offset the position with another party. This contract offsetting process provides our customers with flexibility in establishing and adjusting positions and provides for collateral and margining efficiencies.
Additionally, the substitution of our clearing house as the counterparty to every transaction allows our customers to establish a position with one party and offset the position with another party. This contract offsetting process provides our customers with flexibility in establishing and adjusting positions and provides for collateral and margining efficiencies. Certain BrokerTec contracts are cleared at third-party clearing houses.
Year-over-Year Change (in millions) 2023-2022 Increase due to change in total contract volume $ 174.7 Increase due to change in average rate per contract 287.6 Net increase in clearing and transaction fees $ 462.3 Average rate per contract is impacted by our rate structure, including volume-based incentives, product mix, trading venue and the percentage of volume executed by customers who are members compared with non-member customers.
Year-over-Year Change (in millions) 2024-2023 Increase due to change in total contract volume $ 405.7 Decrease due to change in average rate per contract (3.2) Net increase in clearing and transaction fees $ 402.5 Average rate per contract is impacted by our rate structure, including volume-based incentives, product mix, trading venue and the percentage of volume executed by customers who are members compared with non-member customers.
Year-over-Year Change 2023 2022 2023-2022 Total contract volume (in millions) 6,098.5 5,846.0 4 % Clearing and transaction fees (in millions) $ 4,220.8 $ 3,758.5 12 Average rate per contract 0.692 0.643 8 We estimate the following net increase in clearing and transaction fees based on a change in total contract volume and a change in average rate per contract during 2023 compared with 2022.
Year-over-Year Change 2024 2023 2024-2023 Total contract volume (in millions) 6,685.0 6,098.5 10 % Clearing and transaction fees (in millions) $ 4,623.3 $ 4,220.8 10 Average rate per contract 0.692 0.692 — We estimate the following net increase in clearing and transaction fees based on a change in total contract volume and a change in average rate per contract during 2024 compared with 2023.
Clearing firm guaranty fund contributions received in the form of cash or U.S. Treasury securities as well as the performance bond assets (pursuant to the CME rulebook) can be used to collateralize the facility. At December 31, 2023, guaranty fund contributions available to collateralize the facility totaled $ 8.6 billion .
Clearing firm guaranty fund contributions received in the 45 Table of Contents form of cash or U.S. Treasury securities as well as the performance bond assets (pursuant to the CME rulebook) can be used to collateralize the facility. At December 31, 2024, guaranty fund contributions available to collateralize the facility totaled $10.1 billion.
At December 31, 2023, future minimum payments due under purchase obligations were payable as follows (in millions): Year 2024 $ 118.2 2025-2026 265.4 2027-2028 216.7 Thereafter 625.0 Total $ 1,225.3 Future capital expenditures for technology are anticipated as we continue to support our growth through increased system capacity, performance improvements, integration of acquired platforms and improvements to some of our office spaces.
At December 31, 2024, future minimum payments due under purchase obligations were payable as follows (in millions): Year 2025 $ 176.5 2026-2027 382.7 2028-2029 377.2 Thereafter 350.0 Total $ 1,286.4 Future capital expenditures for technology are anticipated as we continue to support our growth through increased system capacity, performance improvements, integration of acquired platforms and improvements to some of our office spaces.
Our practice is to have our pension plan 100% funded at each year end on a projected benefit obligation basis, while also satisfying any minimum required contribution and obtaining the maximum tax deduction. Based on our actuarial projections, we estimate that a $16.9 million additional contribution will be necessary in 2024 to meet our funding goal.
Our practice is to have our pension plan 100% funded at each year end on a projected benefit obligation basis, while also satisfying any minimum required contribution and obtaining the maximum tax de duction. Base d on our actuarial projections, we estimate that a $12.2 million additional contribution will be necessary in 2025 to meet our funding goal.
In 2023 when compared with 2022, we recognized higher expense related to the distribution of interest earned on performance bond collateral reinvestments to the clearing firms in conjunction with higher interest income earned on our reinvestment during the period due to a higher interest rates in 2023.
In 2024 when compared with 2023, we recognized lower expense related to the distribution of interest earned on performance bond collateral reinvestments to the clearing firms in conjunction with lower interest income earned on our reinvestment during the period due to lower average reinvestment balances in 2024.
The dividend will be payable on March 26, 2024 to shareholders of record on March 8, 2024. Assuming no changes in the number of shares outstanding, the first quarter dividend payment will total approximately $420 million.
The dividend will be payable on March 26, 2025 to shareholders of record on March 7, 2025. Assuming no changes in the number of shares outstanding, the first quarter dividend payment will total approximately $455.0 million.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 Corn 444 418 6 % Soybean 319 268 19 Wheat 208 175 19 In 2023 when compared with 2022, overall commodity contract volume increased, due to higher overall market volatility. We believe this is a result of continued weather uncertainty due to a drier than average 2023 growing season.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 Corn 511 444 15 % Soybean 367 319 15 Wheat 228 208 10 In 2024 when compared with 2023, overall commodity contract volume increased due to higher overall market volatility. We believe this is a result of continued weather uncertainty due to a drier than average 2024 growing season.
Cash that is not available for general corporate purposes because of regulatory requirements or other restrictions is classified as restricted cash and is included in other current assets or other assets in the consolidated balance sheets.
Cash that is not available for general corporate purposes because of regulatory requirements or other restrictions is classified as restricted cash and is included in other current assets or other assets in the consolidated balance sheets. Cash performance bonds and guarantee fund contribution assets are deemed to be restricted cash.
The two largest resellers of our market data represented, in aggregate, approximately 32% of our market data and information services revenue in 2023. Despite this concentration, we consider exposure to significant risk of revenue loss to be minimal.
Approximately 30% of our market data and information services revenue in 2024 was earned from the two largest resellers of our market data. Despite this concentration, we consider exposure to significant risk of revenue loss to be minimal.
In general, the amount of the annual variable dividend will be determined by the end of each year, and the level will increase or decrease from year to year based on operating results, capital expenditures, potential merger and acquisition activity and other forms of capital return, including regular dividends and share buybacks during the prior year.
In general, the amount of the annual variable dividend will be determined at the end of each year, and the level will increase or decrease from year to year based on operating results, capital expenditures, potential merger and acquisition activity and other forms of capital return, including regular dividends and share buybacks during the prior year. 44 Table of Contents Sources and Uses of Cash The following is a summary of cash flows from operating, investing and financing activities.
The board of directors also declared an additional, annual variable dividend of $5.25 per share on December 7, 2023 paid on January 18, 2024 to the shareholders of record on December 28, 2023.
The board of directors also declared an additional, annual variable dividend of $5.80 per share on December 5, 2024 paid on January 16, 2025 to the shareholders of record on December 27, 2024.
Year-over-Year Change (dollars in millions, except per share data) 2023 2022 2023-2022 Total revenues $ 5,578.9 $ 5,019.4 11 % Total expenses 2,143.2 2,003.5 7 Operating margin 61.6 % 60.1 % Non-operating income (expense) $ 717.9 $ 474.4 51 Effective tax expense rate 22.3 % 22.9 % Net income attributable to CME Group $ 3,226.2 $ 2,691.0 20 Diluted earnings per common share attributable to CME Group 8.86 7.40 20 Cash flows from operating activities 3,453.8 3,056.0 13 36 Table of Contents Revenues Year-over-Year Change (dollars in millions) 2023 2022 2023-2022 Clearing and transaction fees $ 4,588.5 $ 4,142.7 11 % Market data and information services 663.7 610.9 9 Other 326.7 265.8 23 Total Revenues $ 5,578.9 $ 5,019.4 11 Clearing and Transaction Fees Futures and Options The following table summarizes our total contract volume, revenue and average rate per contract for futures and options.
Year-over-Year Change (dollars in millions, except per share data) 2024 2023 2024-2023 Total revenues $ 6,130.1 $ 5,578.9 10 % Total expenses 2,198.6 2,143.2 3 Operating margin 64.1 % 61.6 % Non-operating income (expense) $ 609.9 $ 717.9 (15) Effective tax expense rate 22.4 % 22.3 % Net income attributable to CME Group $ 3,525.8 $ 3,226.2 9 Diluted earnings per common share attributable to CME Group 9.67 8.86 9 Cash flows from operating activities 3,690.5 3,453.8 7 37 Table of Contents Revenues Year-over-Year Change (dollars in millions) 2024 2023 2024-2023 Clearing and transaction fees $ 4,988.2 $ 4,588.5 9 % Market data and information services 710.2 663.7 7 Other 431.7 326.7 32 Total Revenues $ 6,130.1 $ 5,578.9 10 Clearing and Transaction Fees Futures and Options The following table summarizes our total contract volume, revenue and average rate per contract for futures and options.
Year-over-Year Change (amounts in millions) 2023 2022 2023-2022 BrokerTec fixed income transaction fees $ 152.1 $ 164.7 (8) % EBS foreign exchange transaction fees 132.6 154.1 (14) % The related average daily notional value for the years ended 2023 and 2022 for key cash markets products were as follows: Year-over-Year Change (amounts in billions) 2023 2022 2023-2022 European Repo (in euros) $ 326.5 $ 345.2 (5) % U.S.
Year-over-Year Change (amounts in millions) 2024 2023 2024-2023 BrokerTec fixed income transaction fees $ 145.1 $ 152.1 (5) % EBS foreign exchange transaction fees 131.6 132.6 (1) 41 Table of Contents The related average daily notional value for the years ended 2024 and 2023 for key cash markets products were as follows: Year-over-Year Change (amounts in billions) 2024 2023 2024-2023 U.S.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 WTI crude oil 1,087 1,108 (2) % Natural gas 601 492 22 Refined products 336 328 2 Overall energy contract volume increased in 2023 when compared with 2022.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 WTI crude oil 1,167 1,087 7 % Natural gas 811 601 35 Refined products 375 336 12 Overall energy contract volume increased in 2024 when compared with 2023.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 Average Daily Volume by Product Line: Interest rates 12,517 10,818 16 % Equity indexes 6,698 7,650 (12) Foreign exchange 954 987 (3) Agricultural commodities 1,508 1,289 17 Energy 2,118 2,026 5 Metals 599 521 15 Aggregate average daily volume 24,394 23,291 5 Average Daily Volume by Venue: CME Globex 22,353 21,712 3 Open outcry 1,145 800 43 Privately negotiated 896 779 15 Aggregate average daily volume 24,394 23,291 5 Electronic Volume as a Percentage of Total Volume 92 % 93 % Market volatility within certain financial markets remained high throughout 2023.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 Average Daily Volume by Product Line: Interest rates 13,716 12,517 10 % Equity indexes 6,847 6,698 2 Foreign exchange 1,030 954 8 Agricultural commodities 1,711 1,508 13 Energy 2,488 2,118 17 Metals 736 599 23 Aggregate average daily volume 26,528 24,394 9 Average Daily Volume by Venue: CME Globex 24,510 22,353 10 Open outcry 1,023 1,145 (11) Privately negotiated 995 896 11 Aggregate average daily volume 26,528 24,394 9 Electronic Volume as a Percentage of Total Volume 92 % 92 % Market volatility within certain financial markets remained high throughout 2024.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 Gold 356 318 12 % Copper 114 93 23 Silver 93 83 12 Overall metal contract volume increased in 2023 when compared with 2022, which we believe was attributable to higher overall market volatility within the gold and silver markets.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 Gold 431 356 21 % Copper 133 114 17 Silver 123 93 33 Overall metal contract volume increased in 2024 when compared with 2023, which we believe was attributable to higher overall market volatility.
Expenses Year-over-Year Change (dollars in millions) 2023 2022 2023-2022 Compensation and benefits $ 828.6 $ 753.1 10 % Technology 218.7 188.6 16 Professional fees and outside services 144.4 137.4 5 Amortization of purchased intangibles 226.6 227.7 — Depreciation and amortization 126.0 134.9 (7) Licensing and other fee agreements 322.8 320.0 1 Other 276.1 241.8 14 Total Expenses $ 2,143.2 $ 2,003.5 7 2023 Compared With 2022 Operating expenses increased by $139.7 million in 2023 when compared with 2022.
Expenses Year-over-Year Change (dollars in millions) 2024 2023 2024-2023 Compensation and benefits $ 850.3 $ 828.6 3 % Technology 255.8 218.7 17 Professional fees and outside services 132.7 144.4 (8) Amortization of purchased intangibles 221.7 226.6 (2) Depreciation and amortization 115.1 126.0 (9) Licensing and other fee agreements 355.4 322.8 10 Other 267.6 276.1 (3) Total Expenses $ 2,198.6 $ 2,143.2 3 42 Table of Contents 2024 Compared With 2023 Operating expenses increased by $55.4 million in 2024 when compared with 2023.
If the carrying value exceeds the undiscounted net cash flows, management is then required to estimate the fair value of the assets and record an impairment loss for the excess of the carrying value over the fair value.
If the carrying value exceeds the undiscounted net cash flows, management is then required to estimate the fair value of the assets and record an impairment loss for the excess of the carrying value over the fair value. In connection with this impairment assessment, management also challenges the useful lives of our definite-lived intangible assets. Revenue recognition.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 Eurodollar futures and options: Futures expiring within two years 87 1,100 (92) % Options 41 833 (95) Futures expiring beyond two years 21 440 (95) SOFR futures and options: Futures expiring within two years 2,545 1,479 72 Futures expiring beyond two years 850 282 n.m. Options 1,726 440 n.m. U.S.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 Eurodollar futures and options: Futures expiring within two years — 87 (100) % Options — 41 (100) Futures expiring beyond two years — 21 (100) SOFR futures and options: Futures expiring within two years 2,654 2,545 4 Futures expiring beyond two years 957 850 13 Options 1,580 1,726 (8) U.S.
Certain BrokerTec contracts are cleared at third-party clearing houses. 31 Table of Contents Business Trends Economic Environment. Our customers continue to use our markets as an effective and transparent means to manage risk and meet their investment needs.
Business Trends Economic Environment. Our customers continue to use our markets as an effective and transparent means to manage risk and meet their investment needs.
The majority of clearing and transaction fees received from clearing firms represent charges for trades executed and cleared on behalf of their customers. No clearing firms represented at least 10% of our clearing and transaction fees in 2023.
Concentration of Revenue We bill a significant portion of our clearing and transaction fees to our clearing firms. The majority of clearing and transaction fees received from clearing firms represent charges for trades executed and cleared on behalf of their customers. One clearing firm represented at lea st 10% of our clearing and transaction fees in 2024.
Market uncertainty following the collapse of two U.S. regional banks and the Federal Reserve's interest rate policy decisions led to an overall increase in demand for gold and other precious metals as safe-haven investments. In addition, copper contract volume increased largely due to an increase in demand for copper in China following the lifting of restrictions from the COVID pandemic.
Market uncertainty surrounding Federal Reserve's interest rate policy decisions as well as uncertainty surrounding the U.S. presidential and congressional elections led to an overall increase in demand for gold and other precious metals as safe-haven investments. In addition, copper contract volume increased largely due to an increase in demand for artificial intelligence data centers and renewable infrastructure.
Non-Operating Income (Expense) Year-over-Year Change (dollars in millions) 2023 2022 2023-2022 Investment income $ 5,275.3 $ 2,198.4 140 % Interest and other borrowing costs (159.4) (162.7) (2) Equity in net earnings (losses) of unconsolidated subsidiaries 296.9 301.1 (1) Other income (expense) (4,694.9) (1,862.4) 152 Total Non-Operating $ 717.9 $ 474.4 51 _________ n.m. not meaningful Investment income .
Non-Operating Income (Expense) Year-over-Year Change (dollars in millions) 2024 2023 2024-2023 Investment income $ 4,079.1 $ 5,275.3 (23) % Interest and other borrowing costs (160.9) (159.4) 1 Equity in net earnings (losses) of unconsolidated subsidiaries 350.9 296.9 18 Other income (expense) (3,659.2) (4,694.9) (22) Total Non-Operating $ 609.9 $ 717.9 (15) Investment income .
We believe this is due to the uncertainty in the global energy markets caused by the continuing war between Russia and Ukraine and unrest in the Middle East. In addition, uncertain weather conditions led to an increase in overall natural gas volume. We believe these factors contributed to higher overall energy volume in 2023.
We believe the increase in volume is due to uncertainty in the global energy markets caused by multiple geopolitical conflicts in the Middle East and Eastern Europe. In addition, uncertain weather conditions throughout the year led to an increase in overall natural gas volume.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 E-mini S&P 500 futures and options 4,154 4,535 (8) % E-mini Nasdaq 100 futures and options 1,829 2,208 (17) E-mini Russell 2000 futures and options 316 378 (16) Equity index contract volume decreased due to lower overall volatility in 2023 when compared with 2022.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 E-mini S&P 500 futures and options 4,016 4,154 (3) % E-mini Nasdaq 100 futures and options 2,065 1,829 13 E-mini Russell 2000 futures and options 308 316 (2) Equity index contract volume increased slightly in 2024 compared with 2023.
In addition to using our existing cash, cash equivalents, marketable securities and cash generated from operations, we may continue to utilize our commercial paper program to meet our working capital needs, capital expenditures and other commitments.
While our cost structure is generally fixed in the short term, our sources of operating cash are largely dependent on contract trading volume levels. In addition to using our existing cash, cash equivalents, marketable securities and cash generated from operations, we may continue to utilize our commercial paper program to meet our working capital needs, capital expenditures and other commitments.
Our exchange and platforms are an international marketplace that brings together buyers and sellers mainly through our electronic trading as well as through open outcry trading and privately negotiated transactions.
Our exchange and platforms are an international marketplace that brings together buyers and sellers mainly through our electronic trading as well as through open outcry trading and privately negotiated transactions. Any customer who is guaranteed by a clearing firm and who agrees to be bound by our exchange rules is able to obtain direct access to our electronic platforms.
Clearing and transaction fees are recognized as revenue when a buy and sell order are matched, novated and when the trade is cleared. On occasion, the customer's exchange trading privileges may not be properly entered by the clearing firm and incorrect fees are charged for the transactions in the affected accounts.
On occasion, the customer's exchange trading privileges may not be properly entered by the clearing firm and incorrect fees are charged for the transactions in the affected accounts. When this information is corrected within the time period allowed by the exchange, a fee adjustment is provided to the clearing firm.
The reserve is based on the historical pattern of adjustments processed as well as management's estimate of future adjustment activity. Income taxes. Calculation of the income tax provision includes an estimate of the income taxes that will be paid for the current year, as well as an estimate of income tax liabilities or benefits deferred into future years.
Calculation of the income tax provision includes an estimate of the income taxes that will be paid for the current year, as well as an estimate of income tax liabilities or benefits deferred into future years. Deferred tax assets are reviewed to determine if they will be realized in future periods.
Net cash used in financing activities (48,339.3) (25,381.7) 90 _________ n.m. not meaningful 43 Table of Contents Operating activities Net cash provided by operating activities was higher in 2023 compared with 2022, largely due to an increase in revenue resulting from fee increases and an increase in investment income on collateral reinvestment net of expense related to the distribution of interest earned.
Net cash provided by (used in) financing activities 5,076.5 (48,339.3) (111) _________ n.m. not meaningful Operating activities Net cash provided by operating activities was higher in 2024 compared with 2023, largely due to an increase in revenue resulting from fee increases and an increase in overall volumes.
The calculation of our tax provision involves uncertainty in the application of complex tax regulations and we occasionally may consult with relevant tax authorities or engage third-party expertise where appropriate.
To the extent it is determined that some deferred tax assets may not be fully realized, the assets are reduced to their realizable value by a valuation allowance. The calculation of our tax provision involves uncertainty in the application of complex tax regulations and we occasionally may consult with relevant tax authorities or engage third-party expertise where appropriate.
Customers entering into privately negotiated transactions also incur additional charges beyond the fees assessed on other transactions. Member/non-member mix. Generally, member customers are charged lower fees than our non-member customers. Holding all other factors constant, revenue decreases if the percentage of trades executed by members increases, and increases if the percentage of non-member trades increases.
Typically, customers submitting trades through our electronic platforms are charged fees for using the platforms in addition to the fees assessed on all transactions executed on our exchange. Customers entering into privately negotiated transactions also incur additional charges beyond the fees assessed on other transactions. Member/non-member mix. Generally, member customers are charged lower fees than our non-member customers.
Treasury 106.1 126.1 (16) % Spot FX 56.7 65.7 (14) % Overall average daily notional values and transactions revenues for the cash markets business and spot FX business were lower in 2023 when compared with 2022. We believe the decrease in U.S.
Repos $ 328.4 $ 293.6 12 % European Repo (in euros) 290.1 326.5 (11) U.S. Treasury 101.9 106.1 (4) Spot FX 59.5 56.7 5 Overall average daily notional values and transactions revenues for the cash markets business were slightly lower in 2024 when compared with 2023.
Foreign Exchange Products The following table summarizes average daily contract volume for our key foreign exchange products.
We also believe the increase in volume is due our additional client outreach efforts throughout the year. Foreign Exchange Products The following table summarizes average daily contract volume for our key foreign exchange products.
Beginning in July 2023, open outcry trading is now limited to Secured Overnight Financing Rate (SOFR) options products following the permanent closure of most of our open outcry pits. Typically, customers submitting trades through our electronic platforms are charged fees for using the platforms in addition to the fees assessed on all transactions executed on our exchange.
Open outcry trading is conducted exclusively by our members, who may execute trades on behalf of 33 Table of Contents customers or for themselves. Beginning in July 2023, open outcry trading is now limited to Secured Overnight Financing Rate (SOFR) options products following the permanent closure of most of our open outcry pits.
Year-over-Year Change (amounts in thousands) 2023 2022 2023-2022 Euro 252 263 (4) % Japanese yen 185 167 11 British pound 111 129 (14) Australian dollar 106 106 — Overall foreign exchange contract volume decreased in 2023 when compared with 2022, which we believe is due to lower overall market volatility.
Year-over-Year Change (amounts in thousands) 2024 2023 2024-2023 Euro 258 252 2 % Japanese yen 192 185 4 British pound 120 111 8 Australian dollar 114 106 8 Overall foreign exchange contract volume increased in 2024 when compared with 2023, which we believe is due to uncertainty surrounding the Federal Reserve and other global central banks' interest rate policy decisions.
Equity Index Products The following table summarizes average daily contract volume for our key equity index products.
The increase in overall interest rate contract volume was also due to our ongoing sales efforts to increase global participation. Equity Index Products The following table summarizes average daily contract volume for our key equity index products.
In connection with this impairment assessment, management also challenges the useful lives of our definite-lived intangible assets. 35 Table of Contents Revenue recognition. A significant portion of our revenue is derived from the clearing and transaction fees we assess on each contract executed through our trading venues and cleared through our clearing house.
A significant portion of our revenue is derived from the clearing and transaction fees we assess on each contract executed through our trading venues and cleared through our clearing house. Clearing and transaction fees are 36 Table of Contents recognized as revenue when a buy and sell order are matched, novated and when the trade is cleared.
Sources and Uses of Cash The following is a summary of cash flows from operating, investing and financing activities. Year-over-Year Change (dollars in millions) 2023 2022 2023-2022 Net cash provided by operating activities $ 3,453.8 $ 3,056.0 13 % Net cash provided by (used in) investing activities 20.9 (489.8) n.m.
Year-over-Year Change (dollars in millions) 2024 2023 2024-2023 Net cash provided by operating activities $ 3,690.5 $ 3,453.8 7 % Net cash (used in) provided by investing activities (82.6) 20.9 n.m.
We believe these factors contributed to higher overall commodity volume in 2023. 39 Table of Contents Energy Products The following table summarizes average daily volume for our key energy products.
We believe these factors contributed to the increase in total volume in 2024 compared with 2023. Interest Rate Products The following table summarizes average daily contract volume for our key interest rate products. We no longer offer Eurodollar contract trading as of June 2023.
In September 2021, we contributed the net assets of our optimization business to OSTTRA, our joint venture with IHS Markit (later acquired by S&P Global). Our clearing house clears, settles and guarantees futures and options contracts traded through our exchanges, in addition to cleared swaps products. Our clearing house's performance guarantee is an important function of our business.
In addition, trades can be executed through privately negotiated transactions that are cleared and settled through our clearing house. Our clearing house clears, settles and guarantees futures and options contracts traded through our exchanges, in addition to cleared swaps products. Our clearing house's performance guarantee is an important function of our business.
Metal Products The following table summarizes average daily volume for our key metal products.
We also believe the increase in volume is due our additional client outreach efforts throughout the year. Metal Products The following table summarizes average daily volume for our key metal products.
Treasury futures and options: 10-Year 2,701 2,497 8 5-Year 1,834 1,543 19 2-Year 838 682 23 Treasury Bond 587 503 17 Federal Funds futures and options 442 335 32 _________ n.m. not meaningful 38 Table of Contents In 2023 compared with 2022, overall interest rate contract volume increased as a result of higher overall volatility.
Treasury futures and options: 10-Year 3,248 2,701 20 5-Year 1,977 1,834 8 2-Year 1,044 838 25 Treasury Bond 714 587 22 Ultra T-Bond 415 312 33 Federal Funds futures and options 414 442 (6) 39 Table of Contents In 2024 compared with 2023, overall interest rate contract volume increased as a result of general market uncertainty.
At December 31, 2023, we were in compliance with the various covenant requirements of all our debt facilities. CME Group, as a holding company, has no operations of its own. Instead, it relies on dividends declared and paid to it by its subsidiaries in order to provide the funds that it uses to pay dividends to its shareholders.
We currently do not have any foreign currency trades outstanding under this facility. At December 31, 2024, we were in compliance with the various covenant requirements of all our debt facilities. CME Group, as a holding company, has no operations of its own.
Also contributing to the increase was the additional investment in S&P Dow Jones Indices LLC of $410.0 million in 2022. Financing activities Cash used in financing activities was higher in 2023 when compared with 2022 mainly due to a decrease in cash performance bonds and guaranty fund contributions. In addition, there was an increase in dividends paid in 2023.
Financing activities Cash provided by financing activities was higher in 2024 when compared with 2023 mainly due to an increase in cash performance bonds and guaranty fund contributions. This was partially offset by an increase in dividends paid in 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

17 edited+5 added−5 removed21 unchanged
Biggest changeThe following shows the available assets for the interest rate swap financial safeguard package at December 31, 2023 in the event of a payment default by a clearing firm that clears interest rate swap contracts, after first utilizing the defaulting firm's available assets: (in millions) Clearing House Available Assets Designated corporate contributions for interest rate swap contracts (1) $ 150.0 Guaranty fund contributions (2) 1,969.2 Assessment powers (3) 705.2 _______________ (1) Our clearing house designates $150.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit.
Biggest changeAssessment powers are calculated to reflect the potential obligation that each clearing member could be called for in the event clearing member defaults exhaust the guaranty fund; however, the total amount available would be reduced by the defaulted clearing firms' assessment obligations since they would no longer be able to satisfy their obligations. 48 Table of Contents The following shows the available assets for the interest rate swap financial safeguard package at December 31, 2024 in the event of a payment default by a clearing firm that clears interest rate swap contracts, after first utilizing the defaulting firm's available assets: (in millions) Clearing House Available Assets Designated corporate contributions for interest rate swap contracts (1) $ 150.0 Guaranty fund contributions (2) 1,798.9 Assessment powers (3) 905.7 _______________ (1) Our clearing house designates $150.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit.
(2) Guaranty fund contributions of clearing firms include guaranty fund contributions required of clearing firms, but do not include any excess deposits held by us at the direction of clearing firms.
(2) Guaranty fund contributions of clearing firms include guaranty fund contributions required of clearing firms, but do not include any excess deposits held by us at the direction of clearing firms.
(3) In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting clearing firms' guaranty fund contributions, we would assess all non-defaulting clearing members as provided in the rules governing the guaranty fund.
(3) In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting clearing firms' guaranty fund contributions, we would assess all non-defaulting clearing firm as provided in the rules governing the guaranty fund.
Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for based on potential failure of the third and fourth largest clearing member; however, the total amount available would be reduced by the defaulted clearing members' assessment obligations since they would no longer be able to satisfy their obligations.
Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for based on potential failure of the third and fourth largest clearing member; however, the total amount available would be reduced by the defaulted clearing firms' assessment obligations since they would no longer be able to satisfy their obligations.
(3) In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting firms' guaranty fund contributions, we would assess non-defaulting clearing members as provided in the rules governing the interest rate swap guaranty fund.
(3) In the event of a clearing firm default, if a loss continues to exist after the utilization of the assets of the defaulted firm, our corporate contribution and the non-defaulting firms' guaranty fund contributions, we would assess non-defaulting clearing firms as provided in the rules governing the interest rate swap guaranty fund.
Changes in interest rates impact the fair values of fixed-rate debt, but do not impact earnings or cash flows. We did not have any variable-rate borrowings at December 31, 2023.
Changes in interest rates impact the fair values of fixed-rate debt, but do not impact earnings or cash flows. We did not have any variable-rate borrowings at December 31, 2024.
For transactions with counterparties that are not members of the third-party clearing house, settlement typically occurs on the day following execution and, prior to settlement, BrokerTec Americas is exposed to the risk of loss in the event a 47 Table of Contents counterparty fails to meet its obligations.
For transactions with counterparties that are not members of the third-party clearing house, settlement typically occurs on the day following execution and, prior to settlement, BrokerTec Americas is exposed to the risk of loss in the event a counterparty fails to meet its obligations.
Gains and losses on foreign currency transactions result primarily from cash, debt and other monetary assets, liabilities, revenues and expenses denominated in British pounds, euros and Japanese yen. Aggregate transaction gains (losses) for 2023, 2022 and 2021 were $(12.9) million, $13.2 million and $0.4 million, respectively.
Gains and losses on foreign currency transactions result primarily from cash, debt and other monetary assets, liabilities, revenues and expenses denominated in British pounds, euros and Japanese yen. Aggregate transaction gains (losses) for 2024, 2023 and 2022 were $(3.0) million, $(12.9) million and $13.2 million, respectively.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to various market risks, including those caused by changes in interest rates, credit and foreign currency exchange rates. Interest Rate Risk Debt outstanding at December 31, 2023 consisted of fixed-rate borrowings of $3.4 billion (in U.S. dollar equivalent).
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to various market risks, including those caused by changes in interest rates, credit and foreign currency exchange rates. Interest Rate Risk Debt outstanding at December 31, 2024 consisted of fixed-rate borrowings of $3.4 billion.
The following shows the available assets at December 31, 2023 in the event of a payment default by a clearing firm for the base financial safeguard package after first utilizing the defaulting firm's available assets: (in millions) Clearing House Available Assets Designated corporate contributions for futures and options (1) $ 100.0 Guaranty fund contributions (2) 6,653.4 Assessment powers (3) 18,297.0 _______________ (1) Our clearing house designates $100.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit.
The following shows the available assets at December 31, 2024 in the event of a payment default by a clearing firm for the base financial safeguard package after first utilizing the defaulting firm's available assets: (in millions) Clearing House Available Assets Designated corporate contributions for futures and options (1) $ 100.0 Guaranty fund contributions (2) 8,254.3 Assessment powers (3) 22,699.2 _______________ (1) Our clearing house designates $100.0 million of corporate contributions to satisfy a clearing firm default in the event that the defaulting clearing firm's guaranty contributions and performance bonds do not satisfy the deficit.
We could assess non-defaulting clearing members 275% of their existing guaranty fund requirements up to a maximum of 550% of their existing guaranty fund requirements as provided in the rules.
We could assess non-defaulting clearing firms 275% of their existing guaranty fund requirements in the event of a single default, and up to a maximum of 550% of their existing guaranty fund requirements in the event of a default by multiple clearing firms, as provided in the rules.
At December 31, 2023, the balance of the collateral at FICC was $175.0 million , which was included in other current assets on the consolidated balance sheet.
At December 31, 2024, the balance of the collateral at FICC was $230.0 million, wh ich was included in other current assets on the consolidated balance sheet.
If that were to occur, BrokerTec Americas would have the right to cover or liquidate the open position but could incur a loss as a result of market movements. At December 31, 2023, we had a receivable from counterparties and payable to counterparties of $714.9 million and $708.9 million, respectively.
If that were to occur, BrokerTec Americas would have the right to cover or liquidate the open position but could incur a loss as a result of market movements.
Gains and losses resulting from this translation are recognized as a foreign currency translation adjustment within accumulated other comprehensive income, which is a component of shareholders' equity and comprehensive income. Aggregate translation gains (losses), net of tax, for 2023, 2022 and 2021 were $70.8 million , $(195.4) million and $(62.0) million, respectively.
Gains and losses resulting from this translation are recognized as a foreign currency translation adjustment within accumulated other comprehensive income, which is a component of shareholders' equity and comprehensive income.
Foreign Currency Exchange Risk Related to Customer Collateral A portion of performance bond deposits is denominated in various foreign currencies. We mark-to-market all deposits daily and require payment from clearing firms whose collateral has lost value due to changes in foreign currency rates and price.
We mark-to-market all deposits daily and require payment from clearing firms whose collateral has lost value due to changes in foreign currency rates and price. Therefore, our exposure to foreign currency risk related to performance bond deposits is considered minimal and is not expected to be material to our financial condition or operating results. 50 Table of Contents
Despite our safeguards, we cannot guarantee that these measures will be sufficient to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.
Despite our safeguards, we cannot guarantee that these measures will be sufficient to protect us from a default or that we will not be materially and adversely affected in the event of a significant default. 47 Table of Contents We maintain two separate financial safeguard packages: • a financial safeguard package for all futures, options and OTC swap contracts other than cleared interest rate swap contracts (base package); and • a financial safeguard package for cleared interest rate swap contracts.
In addition to the 364-day multi-currency line of credit, we also have the option to use our $2.3 billion multi-currency revolving senior credit facility to provide liquidity for our clearing house in the unlikely event of default. 46 Table of Contents At December 31, 2023, aggregate performance bond deposits for clearing firms for both financial safeguard packages was $272.1 billion , including cash performance bond deposits, non-cash deposits, Interest Earnings Facility funds and letters of credit.
Performance bond collateral of a defaulting clearing firm may also be used to secure a draw on the line. In addition to the 364-day multi-currency line of credit, we also have the option to use our $2.3 billion multi-currency revolving senior credit facility to provide liquidity for our clearing house in the unlikely event of default.
Removed
We maintain two separate financial safeguard packages: • a financial safeguard package for all futures, options and OTC swap contracts other than cleared interest rate swap contracts (base package); and • a financial safeguard package for cleared interest rate swap contracts.
Added
We maintain committed repurchase facility agreements amounting to a total of $1.0 billion. The committed repurchase facilities provide access to cash, secured by non-cash collateral, in the event that one or more of our clearing firms fails to promptly discharge an obligation to the clearing house. The facilities are subject to annual renewal.
Removed
Performance bond collateral of a defaulting clearing firm may also be used to secure a draw on the line.
Added
We currently do not have any borrowings outstanding under these facilities. We also maintain a committed facility of up to $750.0 million for foreign currency conversions.
Removed
Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for in the event clearing member defaults exhaust the guaranty fund; however, the total amount available would be reduced by the defaulted clearing members' assessment obligations since they would no longer be able to satisfy their obligations.
Added
The committed foreign currency facility allows the clearing house to convert cash to another currency within generally accepted local market timeframes in the event that one or more of our clearing firms fails to promptly discharge an obligation to the clearing house. The facility is subject to annual renewal.
Removed
These receivables and payables were settled within two business days following December 31, 2023. The counterparty receivables and payables are recognized within other current assets and other current liabilities, respectively.
Added
We currently do not have any foreign currency trades outstanding under this facility. At December 31, 2024, aggregate performance bond deposits for clearing firms for both financial safeguard packages was $291.5 billion, including cash performance bond deposits, non-cash deposits, Interest Earnings Facility funds and letters of credit.
Removed
Therefore, our exposure to foreign currency risk related to performance bond deposits is considered minimal and is not expected to be material to our financial condition or operating results. 48 Table of Contents
Added
Aggregate translation gains (losses) for 2024, 2023 and 2022 were $(61.0) million, $70.8 million and $(195.4) million, respectively. 49 Table of Contents Foreign Currency Exchange Risk Related to Customer Collateral A portion of performance bond deposits is denominated in various foreign currencies.

Other CME 10-K year-over-year comparisons