NDAQ Nasdaq Inc

Yesterday, CME Group Inc. (CME) announced its plan of launching CME Co-Location Services in the US on January 29, 2012, in an attempt to enhance the efficiency of its Globex platform.

Accordingly, CME Co-Location Services will operate from the company’s data center located in the suburbs of Chicago. This service is expected to help in well-organized trading for its buyers and sellers athwart on the Globex platform

Besides, the new co-location services are aimed at offering hosting, connectivity and support services that will comprehensively substantially minimize the latency connectivity for all the trading products that are being traded on CME Group’s Globex platform.

Therefore, the new the co-location service will not only boost the operational efficiency with lowest latency factor but will also offer fair access as it initiates equal pricing to all customers. This enhanced efficiency, fair pricing and similar terms across its customer base are likely expected to further increase the demand for CME Group’s co-location services.

Besides, CME Group also expects to launch the clearing of over-the-counter (OTC) metal products in UK through CME Clearing Europe by the end of this year. The company had previously intimidated about the plan in June this year.

The clearing of metals have been developing at a rapid pace recently, primarily since the London Stock Exchange (LSE) announced its plans to build its own clearing house in May of this year. Moreover, the new regulatory reforms are also aiming at increasing competition among exchanges, which further allows for the launch of new post-trading clearing initiatives and hence, offer an open business model for markets.

Overall, we believe that co-location and OTC clearing of metals are likely to trigger growth opportunities for CME Group in the long run. These efforts are also crucial for the company given the demanding regulations and intense competitiveness in these areas from other exchanges, such as NYSE Euronext Inc. (NYX), NASDAQ OMX Group Inc. (NDAQ) and LSE, across the US and Europe.

On Monday, the shares of CME Group closed at $266.06, up 4.8%, on the NASDAQ Stock Exchange.

 
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