What changed in this filing

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Item 1A. Risk Factors

2022-02-25 compared with 2021-02-26 · 86 added, 100 removed, 320 unchanged (37% of the section changed)

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• broad trends in the industry and financial markets;

• changes in price levels, trading volumes and volatility in the derivatives, cash and OTC markets and in their underlying markets;

• changes in price levels, trading volumes and volatility in the derivatives, cash and over-the-counter (OTC) markets and in their underlying markets;

• shifts in demand or supply in commodities underlying our products;

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• changes in government monetary policies, including central bank decisions related to quantitative easing and the U.S.

Federal Reserve and other international banks' forecasted commitment to zero or near-zero interest rates;

Federal Reserve and other international banks' forecasted interest rates;

• availability of capital to our market participants and their appetite for risk-taking;

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The shifts in market trading patterns we experienced as a result of the financial crisis of 2008 may or may not recur in the future, and our business will be affected by future economic uncertainties, which may result in decreased trading volume and a more challenging business environment for us.

We believe that our interest rate product line will continue to be negatively impacted by the current state of the economy and a zero-interest rate policy.

We believe that our interest rate product line could continue to be negatively impacted by a return to a zero interest rate policy.

A reduction in overall trading volume or in certain products could render our markets less attractive to market participants as a source of liquidity, which could result in further loss of trading volume and associated transaction-based revenue.

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We are primarily subject to the jurisdiction of the regulatory agencies in the U.S., U.K.

and European Union.

As a result of our global operations, we are also subject to the rules and regulations of other local jurisdictions in which we conduct business and offer our products and services, as appropriate.

Due to the global financial crisis that began in 2008, the U.S.

and numerous other jurisdictions have undertaken reviews of the legal framework governing financial markets and have either enacted new laws, rules and regulations, or are in the process of enacting new laws, rules and regulations that could impact our business.

We have incurred and expect to continue to incur significant costs to comply with the extensive regulations that apply to our business.

Our businesses and those of many of our clients have been and continue to be subject to extensive legislation and regulatory scrutiny, and we face the risk of changes to our regulatory environment and business in the future and have incurred and expect to continue to incur significant costs to comply.

Additional new laws or regulations or changes in enforcement practices applicable to our businesses or those of our clients could be imposed in the U.S.

or other jurisdictions, which could change, or require us to change, our business practices or the structure of our business, including its current governance structure, or impose significant costs on us by, for example, requiring more of our funds to be set aside for the guaranty fund.

or other jurisdictions, which could change, or require us to change, our business practices or the structure of our business, including its current governance or regulatory structure, or impose significant costs on us by, for example, requiring more of our funds to be set aside for the guaranty fund.

This could adversely affect our ability to compete effectively with other institutions that are not affected in the same way or impact our clients' overall trading volume and demand for our market data and other services.

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Legislation may be proposed, both domestically and internationally, that could add a transaction tax on our products or change the way our market participants are taxed on the products they trade on our markets.

If such proposals were to become law, they could have a negative impact on our industry and on us by making transactions more costly to market participants, which may reduce trading and could make our markets less competitive.

If we fail to comply with applicable laws, rules or regulations, we may be subject to censure, fines, cease-and-desist orders, suspension of our business, removal of personnel or other sanctions, including revocation of our designations as a contract market, derivatives clearing organization, swap execution facility, swap data repository or broker-dealer or other regulatory penalties.

Our broker-dealer and multilateral trading facility businesses, BrokerTec and EBS, are also extensively regulated in various jurisdictions.

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Some of these firms, along with certain industry associations, have sought, and may seek in the future, legislative or regulatory changes to be adopted that would facilitate mechanisms or policies that allow market participants to transfer positions of futures or options from an exchange-owned clearing house to a clearing house owned and controlled by clearing firms.

If these legislative or regulatory changes are adopted, our revenues and profits could be adversely affected.

If these legislative or regulatory changes are adopted, our business, financial condition and operating results could be adversely affected.

We face intense competition from other companies.

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Our competitors may:

• respond more quickly to competitive pressures, including responses based upon their corporate governance structures, which may be more flexible and efficient than our corporate governance structure;

• respond more quickly to competitive pressures and opportunities, including responses based upon their corporate governance structures, which may be more flexible and efficient than our corporate governance structure;

• develop products that are preferred by our customers compared to those offered by CME Group;

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• exploit regulatory disparities between traditional, regulated exchanges and alternative markets that benefit from a reduced regulatory burden and lower-cost business model.

If our products, markets and services are not competitive, our business, financial condition and operating results could be adversely affected.

If our products, markets and services are not competitive or are viewed as less competitive, our business, financial condition and operating results could be adversely affected.

A decline in our fees or loss of customers could lower our revenues, which would adversely affect our profitability.

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The success of our business depends, in part, on our ability to maintain and increase trading volume in our markets.

To do so, we must maintain and expand our product offerings, our customer base and our trade execution facilities, our pre-and post-trade

services and clearing facilities.

To do so, we must maintain and expand our product offerings, our customer base and our trade execution facilities, our pre-and post-trade services and clearing facilities.

Our success also depends on our ability to offer competitive prices and services in an increasingly price-sensitive business.

For example, some of our competitors have engaged in aggressive pricing strategies in the past, such as lowering the fees they charge for taking liquidity and increasing liquidity payments or rebates.

For example, some of our competitors have engaged in aggressive pricing strategies in the

past, such as lowering the fees they charge for taking liquidity and increasing liquidity payments or rebates.

We cannot provide assurances that we will be able to continue to expand our products and services, that we will be able to retain our current customers or attract new customers or that we will not be required to modify our pricing structure to compete effectively.

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Our role in the global marketplace places us at greater risk than other public companies for a cyber attack and other cyber-security risks.

Our technology, our people and those of our third-party service providers may be vulnerable to cyber security threats, which could result in wrongful use of our data or our customers’ data or cause interruptions in our operations that cause us to lose customers and trading volume and result in substantial liabilities.

Our technology, our people and those of our third-party service providers, and our customers may be vulnerable to cyber-security threats, which could result in wrongful use of our data or our customers’ data or cause interruptions in our operations that cause us to lose customers and trading volume and result in substantial liabilities.

We also could be required to incur significant expense to protect our systems and/or investigate any alleged attack.

We regard the secure storage and transmission of data and the ability to continuously transact and clear on our electronic trading platforms as critical elements of our operations.

Our technology, our people and those of our third-party service providers and our customers may be vulnerable to targeted attacks, such as "phishing" attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, "ransom" attacks, firewall or encryption failures or other security risks.

We regard the secure storage and transmission of data and the ability to continuously transact and clear on our electronic trading platforms as critical elements of our operations and our operational resiliency.

Criminal groups, political activist groups and nation-state actors have targeted the financial services industry in general, and our role in the global marketplace places us at greater risk than other public companies for a cyber attack and other information security threats.

While we have not experienced cyber incidents that are individually, or in the aggregate, material, we have experienced cyber attacks of varying degrees in the past.

Our usage of mobile and cloud technologies may increase our risk for a cyber attack.

Our usage of mobile, web, and cloud technologies, such as those pursuant to our partnership with Google Cloud, may increase our risk of a cyber attack.

Our security defenses may also be impacted or breached due to employee error, malfeasance, system errors or vulnerabilities.

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As part of our global information security and privacy programs, we employ resources to prevent, detect and respond to cyber-attacks and security risks that could impact our people, processes and technology infrastructure, including the rapid response to zero-day vulnerabilities.

However, our security measures or those of our third-party providers, including any cloud-based technologies, may prove insufficient depending upon the attack or threat posed.

However, our security measures or those of our third-party providers, including any cloud-based technologies, such as those pursuant to our partnership with Google Cloud, may prove insufficient depending upon the attack or threat posed.

Any security attack or breach could result in system failures and delays, malfunctions in our operations, loss of customers or lower trading volume, loss of competitive position, damage to our reputation, disruption of our business, legal liability or regulatory fines and significant costs, which in turn, may cause our revenues and earnings to decline.

Though we have insurance against some cyber and privacy risks and attacks, we may be subject to litigation and financial losses that exceed our policy limits or are not covered under any of our current insurance policies.

Though we have insurance against certain cyber and privacy risks and attacks, we may be subject to litigation and financial losses that exceed our policy limits or are not covered under any of our current insurance policies.

As a financial services provider, we are subject to significant litigation risk and regulatory liability and penalties.

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It is impossible to accurately predict the likelihood or impact of any terrorist attack on our industry generally or on our business.

While we have implemented significant physical security protection measures, business continuity plans and established backup sites, in the event of an attack or a threat of an attack, these security measures and contingency plans may be inadequate to prevent significant disruptions in our business, technology or access to the infrastructure necessary to maintain our business.

Such an attack may result in harm to our personnel, the closure of our facilities or render our backup data and recovery systems inoperable.

While we have implemented significant physical security protection measures, business continuity plans, and established backup sites to provide operational resiliency, in the event of an attack or a threat of an attack, these security measures and contingency plans may be inadequate to prevent significant disruptions in our business, technology or access to the infrastructure necessary to maintain our business.

Such an attack may result in harm to our personnel or the closure of our facilities or render our backup data and recovery systems inoperable.

Damage to our facilities due to terrorist attacks may be significantly in excess of any amount of insurance coverage available, or we may not be able to insure against such damage at a reasonable price or at all.

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The COVID-19 pandemic has negatively affected the global economy, including the U.S.

economy and the global financial markets, and has disrupted our business and that of our clients’ businesses.

economy and the global financial markets, and has disrupted our business and our clients’ businesses.

The ultimate impact from COVID-19, including duration, is unknown and could have an adverse effect on our business, financial condition and results of operations.

The ongoing COVID-19 health emergency has caused significant disruption in the international and U.S.

The ongoing COVID-19 pandemic has caused significant disruption in the international and U.S.

economies and financial markets.

The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability in the U.S.

The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, employee attrition, supply chain interruptions and overall economic and financial market instability in the U.S.

Similar impacts also have been experienced throughout the world, including in every country in which we do business.

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• Continued disruption to our business and operations;

• Key members of senior management or a significant number of our employees unable to work as a result of contracting COVID-19 or related illnesses;

• Key members of senior management or a significant number of our employees being unable to work as a result of contracting COVID-19 or related illnesses;

• Reduced productivity and operating effectiveness as a result of our employees working remotely and impacts on our clients encountering similar circumstances;

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• Changes in demand for our products and services, based upon fiscal, monetary, and trade policies adopted in response to the economic impact of the pandemic;

• Reduced economic activity generally could cause businesses to have less need to hedge in our markets;

• Delays in our expansion, investment and strategic initiatives and system integrations;

• Reduced economic activity generally, which could cause businesses to have less need to hedge in our markets;

• Delays in our expansion, investment, strategic initiatives and system integrations;

• Impacts to our ability to expand our client base, grow our business and generate new revenue due to the inability to hold in-person meetings, events and conferences, and other impacts from social distancing;

• Impacts on our brand and reputation due to negative investor sentiment in the overall financial markets;

• Increased financial and operational stress experienced by our clearing firm members due to unprecedented volatility, including significant losses that may result in a reduction of business or a default;

• Increased financial and operational stress experienced by our clearing firm members due to unprecedented volatility or downturn, including significant losses that may result in a reduction of business or a default;

• Market access or trading limitations imposed by governmental authorities;

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These potential impacts may exist for a significant period of time and may adversely affect our business, financial condition, and results of operations even after the COVID-19 pandemic has subsided.

In the past year, we have experienced an overall decrease in trading volume, which we believe is in part a result of effects of the COVID-19 pandemic.

Additionally, the spread of COVID-19 has caused us to modify our business practices, including restricting employee travel and continuing work-from-home protocols, and we may take further actions as may be required by government authorities or as we determine to be in the best interests of our employees and clients.

We also closed our open outcry trading floor and trading is now conducted almost entirely through our electronic trading system.

In August 2020, the Eurodollar options pit was reopened after being reconfigured to meet social distancing standards with additional safety standards in place.

There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or will otherwise be satisfactory to government authorities.

The extent to which the COVID-19 pandemic further impacts our business, results of operations or financial condition will depend on future developments, which are highly uncertain and difficult to predict, but may include, among others, the duration and spread of the pandemic, its severity, the actions taken by governments and other third parties to contain the virus or treat its impact, such as vaccination, and the effect of such actions on our business practices (including ending work-from-home protocols), the impact of existing and any future federal stimulus measures, and the pace at which, and the extent to which, normal economic and operating conditions resume, or even if they resume, whether such economic and operating conditions can be sustained.

The spread of COVID-19 has caused us to modify our business practices, including restricting employee travel and continuing work-from-home protocols, and we may take further actions as may be required by government authorities or as we determine

to be in the best interests of our employees and clients.

There is no certainty that such measures will be sufficient to mitigate the risks posed by the pandemic or will otherwise be satisfactory to government authorities.

The extent to which the COVID-19 pandemic further impacts our business, results of operations or financial condition will depend on future developments, which are highly uncertain and difficult to predict, but may include, among others, the duration and spread of the pandemic, including through new variant strains, its severity, the actions taken by governments and other third parties to contain the virus or treat its impact, such as vaccination, and the effect of such actions on our business practices (including ending work-from-home protocols or transitioning to more hybrid work models), the impact of existing and any future federal stimulus measures, and the pace at which, and the extent to which, normal economic and operating conditions resume, or even if they resume, whether such economic and operating conditions can be sustained.

In addition, many of the other risk factors described herein could be heightened by the effects of the COVID-19 pandemic and related economic conditions, which could result in a material impact on our results of operations, financial condition and liquidity.

Damage to our reputation could harm our business.

Maintaining our reputation and brand is critical to attracting and retaining customers and investors and to maintaining our relationships with our regulators.

Negative publicity regarding our company or actual, alleged or perceived issues regarding our products or services, including social and environmental concerns relating to certain commodity products and increased impact from climate change or criticism or market reaction to the performance of our market in periods of extreme volatility, could give rise to reputational risk which could significantly harm our business prospects.

Damage to our reputation or brand could harm our business.

Maintaining our reputation and brand is critical to attracting and retaining customers, investors and employees and to maintaining our relationships with our regulators and other government officials.

Negative publicity regarding our company or actual, alleged or perceived issues regarding our company, products or services, including social and environmental concerns relating to our company or certain commodity products and increased impact from climate change or criticism or market reaction to the performance of our market in periods of extreme volatility, could give rise to reputational risk, which could significantly harm our business prospects.

These issues may include, but are not limited to, any of the risks discussed in this Item 1A, including risks from customer disputes, system failures or intrusions, failures to meet our regulatory obligations, failures of a clearing firm or other counterparty, issues relating to our third-party suppliers, alleged or actual fraud or misconduct or manipulative activity, or ineffective risk management.

The success of our markets depends on our ability to complete development of, successfully implement and maintain the electronic trading and clearing systems that have the functionality, performance, availability, capacity, security and speed required by our customers.

The success of our business depends in large part on our ability to create interactive electronic marketplaces, for a wide range of products, that have the required functionality, performance, availability, capacity, security and speed to attract and retain customers.

The success of our markets depends on our ability to complete development of, successfully implement and maintain the electronic trading and clearing systems that have the functionality, performance, availability and resilience, capacity, security and speed required by our customers.

The success of our business depends in large part on our ability to create interactive electronic marketplaces for a wide range of products that have the required functionality, performance, availability and resilience, capacity, security and speed to attract and retain customers.

In 2021, 93% of our overall contract volume was generated through electronic trading on our CME Globex electronic platform, and we generated $336.3 million in revenue attributable to the BrokerTec and EBS trading platforms.

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• generate sufficient revenue to justify the substantial capital investment we have made and will continue to make to enhance our electronic trading platforms and other technology offerings.

If we do not successfully enhance our electronic trading systems and technology offerings, if we are unable to develop them to include other products and markets, or if they do not have the required functionality, performance, availability, capacity, security and speed desired by our customers, our ability to successfully compete and our revenues and profits will be adversely affected.

Although we are focused on the technology and customer experience as part of the migration of the BrokerTec platform to CME Globex in the first quarter of 2021 and the expected migration of the EBS platform to CME Globex in the

fourth quarter of 2021, we cannot guarantee that we will not experience any client attrition and to the extent any such client attrition is significant, it could have an impact on our revenues.

If we do not successfully enhance our electronic trading systems and technology offerings, if we are unable to develop them to include other products and markets, or if they do not have the required functionality, performance, availability and resilience, capacity, security and speed desired by our customers, our ability to successfully compete and our revenues and profits will be adversely affected.

Although we are focused on the technology and customer experience as part of the anticipated migration of the EBS platform to CME Globex in the first half of 2022, we cannot guarantee that we will not experience any client attrition, and to the extent any such client attrition is significant, it could have a negative impact on our revenues.

Additionally, we rely on our customers' ability to have the necessary back office functionality to support our new products and our trading and clearing functionality.

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• regulatory sanctions.

We cannot assure that we will not experience systems failures from power or telecommunications failures, acts of God, war or terrorism, human error on our part or on the part of our vendors, natural disasters, fire, sabotage, hardware or software malfunctions or defects, computer viruses, cyber attacks, acts of vandalism or similar occurrences.

We cannot assure that we will not experience system failures from power or telecommunications failures, acts of God, war or terrorism, human error on our part or on the part of our third-party providers or partners, natural disasters, fire, sabotage, hardware or software malfunctions or defects, computer viruses, cyber attacks, acts of vandalism or similar occurrences.

If any of our systems or the systems of our third-party providers do not operate properly, are compromised or are disabled, including as a result of system failure, employee or customer error or misuse of our systems, we could suffer financial loss, liability to customers, regulatory intervention or reputational damage that could affect demand by current and potential users of our market.

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We constantly monitor system loads and performance, and regularly implement system upgrades to handle estimated increases in volume.

However, we cannot assure that our estimates of future trading volume and order messaging traffic will be accurate or that our systems will always be able to accommodate actual trading volume and order messaging traffic without failure or degradation of performance.

Increased trading volume and order messaging traffic may result in connectivity problems or erroneous reports that may affect users of our platforms.

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Although many of our systems are designed to accommodate additional volume and products and services without redesign or replacement, we will need to continue to make significant investments in additional hardware and software to accommodate the increases in volume of transactions and order transaction traffic and to provide processing services to third parties.

If we cannot increase the capacity and capabilities of our systems to accommodate an increasing

volume of transactions and to execute our business strategy, our ability to maintain or expand our businesses could be adversely affected.

If we cannot increase the capacity and capabilities of our systems to accommodate an increasing volume of transactions and to execute our business strategy, our ability to maintain or expand our businesses could be adversely affected.

We, as well as many of our customers, depend on third-party suppliers and service providers for a number of services that are important.

An interruption or cessation of an important supply or service by any third party could have a material adverse effect on our business, including revenues derived from our customers' trading activity.

We depend on a number of suppliers, such as banking, clearing and settlement organizations, telephone companies, internet service providers, data processors, cloud hosting providers, data center providers, and software and hardware vendors, for elements of our trading, clearing and other systems, as well as communications and networking equipment, computer hardware and software and related support and maintenance.

elements of our trading, clearing, and other systems, as well as communications and networking equipment, computer hardware and software and related support and maintenance.

Although we conduct due diligence and monitor important suppliers and service providers (including their resiliency), we cannot provide assurances of their performance and any interruption or cessation of their supplies or services could negatively impact our operations or those of our customers, as well as affect our reputation, financial or regulatory posture.

Many of our customers rely on third parties, such as independent software vendors, to provide them with front-end systems to access our trading platforms and other back office systems for their trade processing and risk management needs.

While these service providers have undertaken to keep current with our enhancements and changes to our interfaces and functionality, we cannot guarantee that they will continue to make the necessary monetary and time investments to keep up with our changes.

While these service providers have undertaken to keep current and certify as to our enhancements and changes to their software to our interfaces and functionality, we cannot guarantee that they will continue to make the necessary monetary and time investments to keep up with our enhancements and changes.

To the extent any of our service providers or the organizations that provide services to our customers in connection with their trading activities cease to provide these services or provide these services in an efficient, cost-effective manner, or fail to adequately expand their services to meet our needs and the needs of our customers, we could experience decreased trading volume, lower revenues, and higher costs.

In addition, while we may be entitled to recovery for breaches of, or liabilities otherwise incurred in connection with, our agreements with third-party suppliers and service providers, such recovery is limited by the terms of these agreements and may not compensate us in full.

Our business exposes us to substantial credit risk of our clearing firms and other counterparties and, consequently, a decrease in their financial resources could adversely affect us.

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In addition, we have established a fund (currently $98.0 million) to provide payments, up to certain maximum levels, to qualified family farmers, ranchers and other agricultural industry participants who use our products and who suffer losses to their segregated account balances if their clearing firm becomes insolvent.

Our Three-Month Eurodollar futures contracts are based on the three-month U.S.

Our Three-Month Eurodollar futures and options contracts are based on the three-month U.S.

Dollar London Interbank Offered Rate (LIBOR) underlying rate.

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Certain of our other businesses could also be negatively affected by changes to LIBOR.

Our Eurodollar futures contract is based on the three-month U.S.

Our Eurodollar futures and options contracts are based on the three-month U.S.

Dollar ICE LIBOR underlying rate.

In 2021, average trading volume in our Eurodollar contracts was 3.5 million contracts and open interest was 40.8 million contracts.

LIBOR is the subject of national and international proposals for reform which advocate for the transition of survey based interbank offered rates to alternative transaction-based reference rates.

A transition from the widespread use of LIBOR to alternative benchmark rates is likely to occur over the next several years.

FCA, which regulates LIBOR, has announced the desire to phase out the use of LIBOR by the end of 2021.

FCA, which regulates LIBOR, announced its intention to phase out the use of LIBOR with the cessation of one-week and two-month USD LIBOR, as well as non-USD LIBOR tenors, after December 31, 2021, and the cessation of publication of three-month, six-month and one-year USD LIBOR after June 30, 2023.

Financial institutions that currently report information used to set USD LIBOR are expected to stop doing so during 2023, and in 2021, the U.S.

Federal Reserve Board and other regulatory bodies issued guidance encouraging banks and other financial market participants to cease entering into new contracts that use USD LIBOR as a reference rate no later than December 31, 2021.

In light of regulatory guidance, we expect banks and other financial market participants to cease entering into new contracts based on USD LIBOR and there is no guarantee that they will reference rates associated with our alternative products.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, has recommended replacing U.S.

Dollar LIBOR with other benchmark alternatives, such as SOFR.

It is unknown whether these alternative reference rates will attain market acceptance as replacements for LIBOR.

In October 2020, central banking counterparties revised the discounting and price alignment interest (PAI) of U.S.-dollar cleared interest rate swaps to use SOFR.

This event affected interest rate swaps, including auctions of newly created SOFR basis swaps, and increased liquidity for SOFR and the resulting orderly auctions.

On November 30, 2020, ICE Benchmark Administration (IBA) announced a consultation on its intention to cease the publication of certain LIBOR rates, including its intention to cease the publication of the three-month U.S.

Dollar LIBOR on June 30, 2023.

FCA also announced its proposed approach to ensure an orderly wind-down of LIBOR and has supported publication of three-month U.S.

Dollar LIBOR tenor in a representative manner through June 30, 2023.

Federal Reserve, Office of Comptroller of the Currency and the Federal Deposit Insurance Company also issued a statement

encouraging banks to cease entering into new contracts that use U.S.

Dollar LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021.

financial institutions, has recommended replacing USD LIBOR with other benchmark alternatives, such as Secured Overnight Financing Rate (SOFR).

However, it is unknown whether these alternative reference rates will attain market acceptance as replacements for LIBOR.

Any transition away from LIBOR to alternative reference rates is complex and could have a material adverse effect on our business, financial condition and results of operations.

We have closely engaged with the industry, regulators and market participants to launch products using alternative reference rates, including our SOFR and Sterling Overnight Index Average (SONIA) futures contracts.

While these actions have resulted in an increase in market acceptance of SOFR, there is no guarantee that this transition will be successful or replace the revenue we derive from our Eurodollar contracts if trading volume were to decline or discontinue altogether.

We have closely engaged with the industry, regulators and market participants to launch products using alternative reference rates, including our SOFR and Sterling Overnight Index Average

(SONIA) futures contracts.

While these actions have resulted in an increase in market acceptance of SOFR, there is no guarantee that this transition will be successful, maintain current market structure, or replace the revenue we derive from our Eurodollar contracts if trading volume were to decline or discontinue altogether.

Our market data revenues may be reduced by decreased demand, poor overall economic conditions, regulatory changes or a significant change in how market participants trade and use market data.

We offer a wide range of data services designed to support the trading, risk management, investment and business needs of our global customer base.

Revenues from our market data and information services represented 11% of our total revenues during the years ended December 31, 2020 and December 31, 2019, respectively.

We offer a wide range of data services designed to support the trading, risk management, investment and business needs of our customers.

Revenues from our market data and information services represented 12% and 11% of our total revenues during the years ended December 31, 2021 and December 31, 2020, respectively.

Factors that may affect our performance and demand for our data include, but are not limited to:

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We may have difficulty executing our growth strategy and maintaining our growth effectively.

We continue to focus on strategic initiatives to grow our business, including our efforts to serve the OTC markets and to distribute our products and services on a global basis.

We continue to execute on strategic initiatives to grow our business, including efforts to serve the OTC markets and to distribute our products and services on a global basis.

There is no guarantee that our efforts will be successful.

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Our growth strategy also may subject us to increased legal, compliance and regulatory obligations.

Unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated with our growth, our future profitability could be adversely affected, and we may have to incur significant expenditures to address the additional operational and control requirements as a result of our growth.

Unless our growth results in an increase in revenues that is proportionate to the increase in our costs associated with our growth, our future profitability could be adversely affected, and we may have to incur significant expenditures to address the additional operational and control requirements as a result of our growth.

We intend to continue to explore acquisitions, other investments and strategic alliances.

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As a result, we may be unable to identify strategic opportunities or we may be unable to negotiate or finance future transactions on terms favorable to us, which could impact our ability to identify growth opportunities.

We may finance future transactions by issuing additional equity and/or debt.

We may issue additional equity and/or debt in connection with strategic partnerships.

The issuance of additional equity in connection with any future transaction could be substantially dilutive to our existing shareholders.

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The process of integration also may produce unforeseen regulatory and operating difficulties and expenditures and may divert the attention of management from the ongoing operation of our business.

To the extent we enter into joint ventures and alliances, we may experience difficulties in the development and expansion of the business of any newly formed ventures, in the exercise of influence over the activities of any ventures in which we do not have a controlling interest, as well as encounter

potential conflicts with our joint venture or alliance partners.

We may not realize the anticipated growth and other benefits from our growth initiatives and investments, which may have an adverse impact on our financial condition and operating results.

We also may be required to take an impairment charge in our financial statements relating to our acquisitions and/or investments, which could negatively affect our stock price.

Our acquisition of NEX is subject to many of these risks, including the potential we may not achieve the expected cost savings, synergies and other strategic benefits from the transaction within the anticipated time frames and the integration of NEX with our operations may not be successful or may be delayed or more costly than expected, or that we may experience customer attrition.

Our joint venture, OSTTRA, with IHS Markit is subject to many of these risks, including the potential we may not achieve the expected cost savings, synergies and other strategic benefits from the transaction

within the anticipated time frames, that the joint venture may be more costly than expected, or that we may experience customer attrition.

The expansion of our global operations is complex and subjects us to increased business and economic risks that could adversely affect our financial results.

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• fluctuations in currency exchange rates;

• complying with extensive and complex regulations and oversight;

• complying with extensive and complex compliance requirements, regulations and oversight by regulators other than our primary functional regulators;

• difficulties in staffing and associated costs in managing multiple international locations;

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dollar against the other currencies may affect our operating income and the value of balance sheet items denominated in foreign currencies.

The Brexit transition period between the U.K.

ended in December 2020 and the E.U.-U.K.

Trade and Cooperation Agreement provisionally entered into force on January 1, 2021.

The E.U.-U.K.

Trade and Cooperation Agreement was effective on January 1, 2021.

As a result of Brexit, we have established certain CME Group businesses in Amsterdam, an E.U.

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however, this has resulted in, and may continue to result in, increased legal, compliance and operational costs.

Our risk management and compliance programs might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results.

In the normal course of our business, we discuss matters with our regulators including during regulatory examinations, and we are subject to their inquiry and oversight.

Our risk management, compliance and monitoring programs might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results.

In the normal course of our business, we discuss matters with our regulators, including during supervisory engagements and regulatory examinations, and we are subject to their inquiry and oversight.

Our regulators have broad enforcement and supervisory powers, including the power to censure, fine, issue cease-and-desist orders, prohibit us from engaging in some of our businesses or suspend or revoke our regulatory designations or the registration of our officers or employees who violate applicable laws or regulations.

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In extreme cases, these outcomes could adversely affect our ability to conduct our business.

We maintain risk management and compliance policies, procedures and programs which are designed to prevent, detect, deter, monitor and manage our risks, but such policies, procedures and programs may not be fully effective.

We maintain risk management, compliance and monitoring policies, procedures and programs that are designed to prevent, detect, deter, monitor and manage our risks, including enterprise risk and internal audit programs, but such policies, procedures and programs may not be fully effective.

Some of our risk management processes depend upon evaluation of information regarding markets, customers, employees or other matters or potential threats that are publicly available or otherwise accessible by us.

That information may not in all cases be accurate, complete, up-to-date or properly evaluated.

Management of operational, financial, legal and compliance, regulatory, reputational and strategic risk requires, among other things, policies and procedures to record properly and verify a large

number of transactions and events.

Management of operational, financial, legal and compliance, regulatory, reputational and strategic risk requires, among other things, policies and procedures to record properly and verify a large number of transactions and events.

We cannot guarantee that our policies and procedures will always be effective or that we will always be successful in monitoring or evaluating the risks to which we are or may be exposed.

We could be harmed by misconduct or errors that are difficult to detect and deter.

There have been a number of highly publicized cases involving fraud or other misconduct or manipulative activity by employees of financial services firms and other market participants in the past.

There continue to be highly publicized cases involving fraud or other misconduct or manipulative activity by employees of financial services firms and other market participants.

Improper trading activity on our platforms by participants could include activities such as spoofing, layering, wash trading and manipulation.

Misconduct by our employees and agents could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of customers or the company, or improper use or unauthorized disclosure of data or confidential information of the company or its customers.

Misconduct by our employees and agents could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of customers or the company, improper securities trading activities, improper use or unauthorized disclosure of data or confidential information of the company or its customers, among other potential misconduct.

It is not always possible to deter misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases.

If we were found to have not met our regulatory oversight and compliance obligations, we could be subject to regulatory sanctions, financial penalties, restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously harm our reputation.

If we were found to have not met our regulatory oversight and compliance obligations, we could be subject to regulatory sanctions, enforcement actions, financial penalties, restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity, and such outcomes could seriously harm our reputation.

Our employees and agents also may commit errors that could subject us to financial claims for negligence, as well as regulatory actions, or result in our voluntary assumption of financial liability.

Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation and reduce the number of participants trading in our markets.

Further, allegations by regulatory or criminal authorities of improper trading activities in our markets could affect our brand and reputation and reduce the number of participants trading in our markets.

If that should occur, we could face a corresponding decline in trading volume and revenue.

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Material changes in the intellectual property landscape or regulatory framework pertaining to such benchmarks could have a negative impact on our ability to offer such products.

We are significantly dependent on the contract volume of products which are based on intellectual property rights of indexes derived from third-party price reporting agencies.

We are significantly dependent on the contract volume of products that are based on intellectual property rights of indexes derived from third-party price reporting agencies.

To comply with CFTC core principles, we must be able to demonstrate that our products may not be readily susceptible to manipulation.

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We attempt to protect our proprietary technology and intellectual property rights by relying on trademarks, copyright, database rights, trade secrets, restrictions on disclosure, and other methods.

Notwithstanding the precautions we take to protect our proprietary technology and intellectual property rights, it is possible that third parties may copy, misappropriate or otherwise obtain and use our proprietary technology without authorization or otherwise infringe on our rights.

For example, one of our former employees pleaded guilty to theft of our trade secrets.

Notwithstanding the precautions we take to protect our proprietary technology and intellectual property rights, it is possible that employees or third parties may copy, misappropriate, or otherwise obtain and use our proprietary technology without authorization or otherwise infringe on our rights.

In addition, in the future, we may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity.

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These claims of infringement are not uncommon in our industry.

As a result, we may face allegations that we have infringed the intellectual property rights of third parties, which may be costly for us to defend against.

As a result, we may face allegations that we have infringed the intellectual property rights of third parties, which may be costly for us to defend.

If one or more of our products or services is found to infringe on patents held by others, we may be required to stop developing or marketing the products or services, to obtain licenses to develop and market the services from the holders of the patents or to redesign the products or services in such a way as to avoid infringing on the patents.

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In addition, the agreements governing our outstanding indebtedness do not significantly limit our ability to incur additional indebtedness, which could increase the risks described above to the extent that we incur additional debt.

exchanges, swap execution facility and clearing house also are required to maintain minimum capital levels as defined by the CFTC, and BrokerTec Americas is required to meet minimum capital requirements set by the SEC.

Our regulated businesses are also required to maintain minimum capital requirements set by their applicable regulators.

Please see "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Requirements" beginning on page 45 for additional information capital requirements.

Any reduction in our credit rating could increase the cost of our funding from the capital markets.

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If we fail to meet securities analysts' expectations regarding our operating results, the price of our Class A common stock could decline substantially.

Eleven of our board members own trading rights or are officers or directors of firms that own trading rights on our derivatives exchanges.

Ten of our board members own trading rights, or are officers or directors of firms that own trading rights, on our derivatives exchanges.

As members, these individuals may have interests that differ from or conflict with those of shareholders who are not also members.

Our dependence on the trading and clearing activities of our exchange members, combined with the CME members' rights to elect six directors, may enable them to exert substantial influence over the operation of our business.

Eleven of our directors own or are officers or directors of firms that own trading rights on our exchanges.

Ten of our directors own, or are officers or directors of firms that own trading rights on our exchanges.

We are dependent on the revenues from the trading and clearing activities of our exchange members.

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Additionally, our Class B shareholders, who are members of our CME exchange, are entitled to elect six directors to our board even if their Class A share ownership interest is very small or non-existent.

We have limited ability to eliminate these election rights.

In 2018, we held a special meeting of shareholders to eliminate all or some of these director election rights.

While the proposal received majority support, it failed to achieve the required support under Delaware law from a majority of the outstanding owners of the Class B common stock.

We have limited ability to eliminate these election rights, and prior attempts to do so did not receive the necessary shareholder approvals.

In connection with these rights, our ability to take certain actions that we may deem to be in the best interests of the company and its shareholders, including actions relating to certain pricing decisions, may be limited by the rights of our members.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors