CME Group Inc. (CME) announced wide-ranging changes to its trading fee schedule Tuesday as the dominant U.S. futures exchange faces the launch of a competing platform, expected in the coming weeks.

CME will expand volume-based fee incentives for its interest rate, equity index and foreign exchange futures, lowering prices as ELX Futures LP, a consortium-backed venture, prepares to challenge CME's lock on the Treasury futures market.

Under a new fee regime effective Aug. 1, Treasury futures traders who are CME members will be charged a flat rate of 5 cents per trade side, while non-members will pay as little as 8 cents per side, as long as they trade more than 45,000 contracts per day on average.

That's cheaper than ELX, which announced last week that it plans to charge 9 cents for high-volume traders.

However, CME's fees don't include clearing, which costs 6 cents per trade side for Treasury futures and wasn't affected by Tuesday's announcement; ELX's fees include clearing through the Options Clearing Corp.

Starting Aug. 1, traders in CME's interest rate futures will also be able to aggregate volume across multiple product lines to qualify for volume discounts.

CME instituted a separate volume-based incentive framework for E-mini equity index products, excluding contracts tracking the Dow Jones Industrial Average. The exchange also standardized fees in agricultural commodity products.

The fee cuts at CME arrive as ELX eyes a launch date around the July 4 holiday weekend.

Chicago-based CME, which handles more than 90% of the U.S. futures business, has lowered fees in the past when confronted by rivals targeting its franchises.

However, Donald Fandetti, an exchange sector analyst with Citi Investment Research, wrote in a research note that low fees alone aren't enough to pull business away from CME.

"In terms of ELX, their pricing on interest rate futures may be lower than CME, but CME's tighter execution spread will more than offset the lower price," he wrote.

A CME spokesman said the exchange continually evaluates its fee structure with an eye toward building liquidity; ELX officials declined comment.

ELX Futures is supported by a group of banks, proprietary trading firms and technology companies, including Citigroup Inc. (C), Deutsche Bank (DB), Merrill Lynch & Co. and its acquirer, Bank of America Corp. (BAC), Barclays PLC (BCS) unit Barclays Capital, Credit Suisse Group (CS), BGC Partners Inc. (BGCP), Getco, JPMorgan Chase & Co. (JPM), Peak6, and Royal Bank of Scotland PLC (RBS).

Chicago hedge fund firm Citadel Investment Group was also a founding ELX member, but gave up its seat on the board after announcing plans to join CME in a credit default swap clearing and trading platform. Citadel still holds an equity stake in ELX.

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