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CME Executive Chairman Terry Duffy on the impact of regulations on the company’s operations.
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Some of the most traveled names -- business gathering at the Milken conference in Los Angeles today and Beverly Hills no less -- -- David how is it -- got a first.
Perhaps this is interview with the head of the country's biggest futures exchange can't wait.
Well the first thing he said by the way is we're -- come -- was is that I have to say hello to you from Terry -- -- Terry you go ahead hello.
And I don't.
Great to see we're so happy you got -- first on Fox Business with David can't wait to -- we have to say David.
Are right thank you Terry good deceived by the way not only you chairman of CME group -- now -- president president has if you didn't have enough didn't have enough to add a little bit to the plate then what next street -- do is -- is now just a little bit more reporting.
From different.
Parts organization whether it's -- -- whether some public relations whether it's it legal so they're more coming to not to me directly now.
Regulations.
That must take a lot of your time it does David it takes probably good sixty to 70% of my time -- -- when -- look at CME group.
We're highly regulated and -- told my board constantly -- to do know we're maybe it's record company we're a technology company were clearing organization and we also have a regulatory part of our.
Organization that.
If we can't make sure this is okay of those other businesses will suffer so it's.
Very much -- folks -- now there's a lot of high talk in Washington that that perhaps you shouldn't be self regulators what's the latest on that well I would say that they don't we have the biggest interest and self regulation anybody else in the world publicly held company would.
We don't have a credible marketplace and we don't have incredible business and we have the expertise and self regulation -- nobody else has an expertise so.
There's a lot of arguments why it works for us we had an isolated incidents.
Granted it was a very large one.
But the same time I think you look at the we've seen these models been -- over last hundred years has been fairly flawless RI MF global.
In the news.
A lot of people of we have bond traders say that they have money stolen from them are they right.
Well you know I'm not a judge and jury David but -- testified four times now on MF global and it's been a very disturbing event not only in.
The -- Folgers CME but you know for our clients and yes -- monies are -- an attempt demise are missing you may want to consider them stolen.
So hopefully these people look at the money back CME's you know put up 550 million dollars to encourage trustee to go up to a certain level he went to 72 cents in the dollar.
Now there's another and or distribution of -- is -- updated two cents of the dollar so.
Hopefully more more this money will come back and we convicted these people all this money was stolen -- you surprised there's not a criminal indictment.
If money is still and I will be very surprised that a criminal indictment yes.
And any.
Is is there an investigation ongoing because we haven't heard much about you know again we have been not asked to have our own investigation we make sure that we did a forensic analysis of what we did internally units come back very very plain self again we'll leave it up to the authorities to make those terminations up.
We were talking about some of them.
People were worshipped by this crisis for some of them were the ones who can least afford it the farmers and every audit that spend their life savings that -- their bets in order prevents disaster in the future.
Is there anything you'd be done for them well one of the things that we came up with David right away it was the family Farmers Insurance -- so going forward now we are going to.
Have a hundred million dollar fund for farmers and ranchers to guarantee -- or.
Trades at CME group so to put that in the perspective villages a hundred million dollars doesn't talk a lot of money.
But if in fact that plan was -- to take a lot of money to make a lot of might need to put that money was in place today every farmer and rancher was -- CME group would have got a 100% of their money return.
That's providing the seventy cents a dollar came back so it is a very significant -- by us in the group.
Looking to the future how do you avoid problems like this well I think there's a couple different ways right now we're talking about haven't CEOs and CFOs sign off on any type of distribution of segregated funds I mean I I'm a big bully really got to stiffen the penalties and in -- 145000.
Dollar.
Find the CFTC for a second violation seems a little perverse wonders one point six or one point two or 700 million dollars -- So there I think that the finds it to be made -- doing this and sent people from doing bad things and -- in addition to -- -- Sometimes that's not.
Not much for people I mean it may sound like a lot of money to us right but it's only 1% of their holdings right should be even more than just fights EI -- censure from trading -- -- -- every a lot of different things about do and I'm hoping that the congress and the regulars come up with some new plants to make sure this never happens again.
Let's talk commodities over a second -- a lot of folks out there wanna know what you think.
The future -- you've -- these huge jumps in.
In most commodities some people say it's because of that what's gonna happen in the future.
Well it's -- commodities is always hard because you look at.
There are always weather dependent you know especially when you look at agricultural products this year we are projected to have the third worst to winner in the midwest -- history.
We probably had a lot -- -- -- the -- in the midwest and history so in return you don't have as much smoke volume that was much water underground.
What does that mean coming -- to the growing season so that could also have an effect on prices going forward.
Again it's all.
Yet to be seen.
But you know these are very personal products so we need to were feeding the world today -- and people's appetites of change dramatically and their appetite for our food products has changed met and the economy in general.
-- -- -- in general I mean the markets have been actually trading fairly well I mean I'm not an economist -- set on a panel of an economist today and he lost a few -- that look I had in mind that.
-- look at a very real.
Approach towards economy I think that world is looking for yield dividend paying stocks things of that nature.
It doesn't appear -- -- of any interest rate movement any time soon so people need to earn money on the money.
-- -- -- that -- to do that -- -- market so I think you're looking at low volatility.
High dividend paying stocks.
And that's what people are -- to right now Terry Duffy wonderful to see in my David thank you very hard for having me hello again I'm sorry Liz wasn't here well list -- New York sun comes -- I don't know -- stuff.
