CME Sees Electronic Trade Services Powering Up 2012 Revenues

The top executive of CME Group Inc. (CME) said Tuesday the futures exchange group will get a boost next year as it bulks up in services for electronic traders.

Speed-sensitive trading firms are signing on for quicker hookups to CME's markets and the company will boost market data fees for screen traders next year, together seen adding as much as $75 million in 2012 revenue.

CME on Jan. 29, 2012 will go live with so-called co-location services, allowing high-frequency traders and other users of automated trading strategies the shortest and fastest connection to the exchange group's electronic trade-matching systems, according to the company.

More than 100 firms have signed contracts for the service and now are installing their servers in CME's newly built data center facility, located in the Chicago suburbs.

"We've seen very, very strong demand for our co-location services, beyond what we'd initially expected," said Craig Donohue, chief executive of CME, speaking Tuesday at the company's investor day.

Fees paid by firms for co-location are now seen bringing in $40 million to $45 million in revenues next year, according to CME estimates, up from the $30 million to $40 million estimated earlier this year.

CME also aims to lift fees paid by firms to receive market data like pricing information by 15%, to $70 per screen, beginning Jan. 1. That is expected to bring in an additional $25 million to $30 million in revenue.

Shares in CME were down by 2.6% to $242 in a volatile trading session Tuesday.

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

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