CORRECT: CME Group To Establish Guarantee Fund; 4Q Surges On Tax-Related Adjustment

CHICAGO (Dow Jones)--CME Group Inc. (CME) announced plans Thursday to beef up protections for some customers through a new $100 million fund that will back losses sustained by "family farmers and ranchers" in the event of another failure like MF Global Holdings (MFGLQ).

The fund is slated to be in place by March 1 and will provide up to $25,000 per account should such futures-trading customers suffer losses from the insolvency of a CME clearinghouse member or other market participant, according to CME.

"The fund announced today is the first step in what will be a series of enhancements to industry customer protection mechanisms," said Craig Donohue, chief executive of CME, in a statement.

Federal investigators continue to probe the late-October downfall of MF Global, among the biggest futures-clearing firms in the U.S., as well as the whereabouts of its client funds. CME, which was the failed firm's main regulator at the exchange level, has borne some of the frustration among former MF Global customers as an estimated $1.2 billion in assets remains missing.

Earlier Thursday CME reported that fourth-quarter earnings surged with help from a sizable tax-related adjustment, although the exchange operator turned in core results that fell short of expectations amid a lackluster trading environment.

Global economic turmoil drove derivatives-trading activity to record levels last year, helping CME maintain its standing as the world's largest futures market. The fourth quarter was slower however, particularly in the absence of failed brokerage MF Global.

CME reported that MF Global's downfall cost the futures exchange company about $3 million in lost revenue for the quarter and drove $27 million in additional expenses.

Also Thursday, the company revealed it raised its quarterly dividend by 59% to $2.23 a share and also declared an additional, annual variable dividend, amounting to $3 a share in 2012.

CME reported a profit of $745.9 million, or $11.25 a share, compared with a profit of $196.2 million, or $2.93 a share, a year earlier. Stripping out items like a $528 million noncash benefit from a tax adjustment, per-share earnings fell to $3.55 from $3.77 a year earlier.

Revenue declined 3.5% to $736.5 million as clearing and transaction fee revenue fell 4.2%. Analysts polled by Thomson Reuters expected a per-share profit of $3.64 on revenue of $749 million.

Class A shares closed Wednesday at $245.48 and were inactive premarket. The stock is down 22% over the past 12 months.

-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com

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