CME's Duffy: Has Talked With Other States On Possible Move -CNBC

CME Group Inc. (CME) has met with lieutenant governors and goverment officials from other states as it mulls a move out of Illinois, according to the exchange company's executive chairman, though talks have been "very preliminary in nature."

State and local lawmakers in Illinois have in recent days have signaled support for CME's objections to a January jump in the state's corporate tax rate, which prompted CME to consider leaving its longtime home, according to CME's Terry Duffy.

"I said this back in January...CME will not sit idly by, and we have not been," said Duffy, appearing on CBNC Wednesday.

"Many other states have publicly demonstrated that they're very business friendly," Duffy said, declining to specify which ones have been courting CME.

CME's long-simmering frustration with Illinois' move to tax corporations at a 7% rate, up from the previous 4.8%, came to the fore at its annual meeting last week when Duffy acknowledged that the world's largest futures exchange company could relocate its corporate base in search of relief from the tax regime.

New Chicago Mayor Rahm Emanuel--a past member of the Chicago Mercantile Exchange's board--said he believed a deal could be worked out to keep CME in Chicago, and Illinois Senate President John Cullerton on Tuesday paid a visit to Duffy in hopes of answering CME's concerns, according to Duffy.

"Right now, CME Group pays the highest tax of any other company in Illinois," Duffy said Wednesday. He called "unjust" a system of loopholes that has allowed other corporations to avoid paying the full rate.

Illinois Governor Pat Quinn on Tuesday said he believed CME would ultimately remain in Chicago, home to its trading pits for more than 160 years. He stressed that the increase was temporary, expiring in four years.

"I've never seen too many taxes that are temporary," Duffy commented Wednesday.

The proposed blockbuster merger of NYSE Euronext (NYX) and Deutsche Boerse AG (DBOEF, DB1.XE)--two of CME's fiercest competitors--is likely to go through, Duffy said Wednesday. CME, which is bigger than both companies by market capitalization, has opted to focus on growing its existing business as other exchanges group together to cut costs and expand their reach.

"Our business is doing quite well with the strategy we have put in place the last couple of years," Duffy said.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

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