What changed in this filing

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Item 1. Business

2024-02-28 compared with 2023-02-27 · 146 added, 129 removed, 313 unchanged (47% of the section changed)

CME Group provides market participants worldwide the ability to efficiently manage risk within and across multiple asset classes, by trading futures, options, cash and over-the-counter (OTC) products.

CME Group enables clients to trade futures, options, cash and over-the-counter (OTC) products, optimize portfolios, and analyze data - empowering market participants worldwide the ability to efficiently manage risk and capture opportunities.

CME Group provides primary price discovery and referential pricing information through its market data in a variety of formats, including real time, historical and derived data for customers in both listed and cash products.

CME Group also offers industry-leading research and analytics tools to provide customers with market education resources.

In addition, it operates one of the world's leading central counterparty clearing providers.

GENERAL DEVELOPMENT OF BUSINESS

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We also offer cash and repo fixed income trading via BrokerTec, and cash and OTC FX trading via EBS.

In addition, we operate one of the world’s leading central counterparty clearing providers, CME Clearing, operated by CME.

Additionally, we operate one of the world’s leading central counterparty clearing providers.

Derivatives Exchange Business:

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Our products provide a means for hedging, speculation and asset allocation related to the risks associated with, among other things, interest rate sensitive instruments, equity ownership, changes in the value of foreign currency and changes in the prices of agricultural, energy and metal commodities.

• CME's product slate includes agricultural, equities, FX, cryptocurrencies/alternative investments and interest rate products, including Eurodollar futures and options, Secured Overnight Financing Rate (SOFR) futures and options, Bloomberg Short-Term Bank Yield (BSBY), livestock and cash-settled contracts based on the S&P 500, including the E-mini S&P 500 ESG (Environmental, Social and Governance) contract, Micro E-mini Equity Index contracts, Nasdaq-100, FTSE Russell and Bitcoin and Ether Reference Rate.

• CME's product slate includes agricultural, equities, FX, cryptocurrencies/alternative investments and interest rate products, including Secured Overnight Financing Rate (SOFR) futures and options, livestock and cash-settled contracts based on the S&P 500, including the E-mini S&P 500 ESG (Environmental, Social and Governance) contract, Micro E-mini Equity Index contracts, Nasdaq-100, FTSE Russell and Bitcoin and Ether Reference Rate.

• CBOT's product slate consists of agricultural, equities and interest rate products, including contracts for United States (U.S.) Treasury futures, soybean, corn and wheat and contracts based on the Dow Jones Industrial Index.

• NYMEX's product slate consists of energy and metals products, including contracts for crude oil, natural gas, heating oil, gasoline and emissions (GEO and NGO).

• COMEX's product slate consists of metals products, including contracts for gold, silver, copper and other base metals.

• NYMEX's product slate consists of energy and metals products, including contracts for crude oil, natural gas, heating oil, gasoline and emissions (GEO, N-GEO and C-GEO).

• COMEX's product slate consists of metals products, including contracts for gold, silver, copper and other base, ferrous and battery metals.

We believe the breadth and diversity of our products and services lines are beneficial to our customers and CME Group's overall performance.

Our asset classes contain products designed to address differing risk management needs, and customers are able to manage risks and achieve operational and capital efficiencies by accessing our diverse products through our platforms and our clearing house.

CME Group products are traded primarily through CME Globex, as well as by open outcry in Chicago for Eurodollar options and SOFR options and through privately negotiated transactions.

CME Group products are traded primarily through CME Globex, as well as by open outcry in Chicago for SOFR options (and previously, Eurodollar options) and through privately negotiated transactions.

We strive to provide the most flexible and scalable platforms to support the operational and capacity needs of our business along with the delivery of innovative technology solutions to the marketplace.

Our CME Globex electronic platform is the trading engine for our central limit order book markets and is available on a global basis nearly 24 hours a day throughout the trading week.

Our CME Globex electronic trading system operates our central limit order book markets and is available on a global basis nearly 24 hours a day throughout the trading week.

The CME Globex platform is accessible through a wide variety of vendor-provided and custom-built trading systems that benefit from our open application programming interface approach.

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• direct market access;

• fairness, price transparency and anonymity;

• open access, price transparency and anonymity;

• convenience and efficiency;

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CME Clearing Business:

Through our clearing house, CME Clearing, which is operated by CME, we provide clearing and settlement services for a broad range of exchange-traded futures and options on futures contracts and OTC derivatives.

Through our clearing house, we provide clearing and settlement services for a broad range of exchange-traded futures and options on futures contracts and OTC derivatives.

Our integrated clearing function is designed to ensure the safety and the soundness of our markets by serving as the counterparty to every trade, becoming the buyer to each seller and the seller to each buyer, and limiting counterparty credit risk.

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For select cleared-only markets, positions are marked-to-market daily, with the capacity to mark-to-market more frequently as market conditions warrant.

The CME ClearPort front-end system provides access to our flexible clearing services for block transactions, bi-lateral trades and swaps.

The CME ClearPort front-end system provides access to our flexible clearing services over multiple asset classes.

The majority of clearing and transaction fees received from clearing firms represents charges for trades executed and cleared on behalf of their customers.

One firm represented at least 10% of our clearing and transaction fees revenue for 2022.

No firm represented at least 10% of our clearing and transaction fees revenue for 2023.

In the event a clearing firm were to withdraw, our experience indicates that the customer portion of the firm's trading activity would likely transfer to one or more other clearing firms of the exchange.

Cash Markets Business:

Our cash markets business is comprised of BrokerTec and EBS.

Certain BrokerTec and EBS products are cleared at third-party clearing houses.

Our cash markets business is comprised of BrokerTec and operated on CME Globex EBS.

Certain BrokerTec products are cleared at third-party clearing houses.

BrokerTec and EBS offer anonymous and disclosed trading venues, offering clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers.

Our BrokerTec Central Limit Order Books were migrated from a third-party platform to our CME Globex electronic platform in the first quarter of 2021 and our EBS Central Limit Order Books were migrated to the CME Globex platform in the second quarter of 2022.

• BrokerTec operates global electronic trading for fixed income products on the CME Globex platform, with a leading position in cash U.S.

• BrokerTec operates global electronic trading for fixed income products, with a leading position in cash U.S.

Treasuries, E.U.

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It facilitates trading for banks and non-bank professional trading firms.

BrokerTec Quote is a third party Request For Quote platform that offers a dealer-to-client trading solution for the European and U.S.

The BrokerTec Central Limit Order Book is a dealer-to-dealer electronic trading platform operated on CME Globex.

BrokerTec Quote is a Request For Quote platform provided on third party technology, that offers a dealer-to-client trading solution for the European, U.K.

government repo markets.

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Treasury instruments.

• EBS provides for the trading of FX products across major and emerging market currencies.

EBS also offers execution of non-deliverable forwards through a Commodity Futures Trading Commission (CFTC) registered swap execution facility (SEF), operated by one of our subsidiaries.

EBS operates both as a Central Limit Order Book platform for spot and non-deliverable forwards currency pairs, as well as a relationship-based third-party trading platform offering spot FX, FX forwards and FX swaps.

• EBS provides for the trading of global FX products across major and emerging market currencies and Spot Precious Metals.

EBS Market is a Central Limit Order Book electronic trading platform for spot FX, Spot Precious Metals and NDFs.

EBS Direct is a relationship-based trading platform offering spot FX, Spot Precious Metals (and FX forwards and FX swaps until the scheduled cessation of that business in April 2024).

Market Data Business:

We offer a variety of market data services through industry-leading market data platforms and third-party distribution partners, which are designed to meet the risk-management, trading, investment and business needs of our

global client base.

As such, we provide proprietary real-time and historical market data related to CME Group’s vibrant and deeply liquid exchanges and cash markets businesses.

We further offer derived cash markets pricing, third-party and alternative data sets, as well as a wide range of analytic tools.

As such, we provide proprietary real-time and historical market data related to CME Group’s deeply liquid exchanges and cash markets businesses.

We further offer derived cash markets pricing, third-party and alternative data sets, as

well as a wide range of analytic tools.

As customers continue to leverage cloud technology to improve and evolve their businesses, CME Group has taken a leading role by becoming the first derivatives marketplace to provide live market data natively in the cloud with the launch of our cloud connect capabilities on the Google Cloud Platform.

CME Group is also the distributor of leading benchmark equity and commodity indices on behalf of third parties as well as our own proprietary benchmarks and indices, including CME Term SOFR Reference Rates (CME Term SOFR), which is a benchmark designed to adhere to the IOSCO Principles for Financial Benchmarks.

CME Group is also the distributor of leading benchmark equity and commodity indices on behalf of third parties, as well as a distributor and licensor of our own proprietary benchmarks and indices, including CME Term SOFR Reference Rates (CME Term SOFR), which are designed to adhere to the IOSCO Principles for Financial Benchmarks and are administered by our U.K.

regulated subsidiary, CME Benchmark Administration Limited.

Our Strategic Initiatives

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Maximize Futures and Options Growth Globally — We continue to focus on driving growth and new customer acquisition by expanding, innovating and scaling our core offerings, and increasing participation from non-U.S.

We do this by expanding our global sales team, cross-selling our products, expanding the strength of our existing benchmark products, launching new products and services and deepening open interest in our core futures and options offerings.

We do this by optimizing our global sales team, cross-selling certain products, expanding the strength of our existing benchmark products, launching new products and services, strengthening our existing product and service offerings, securing intellectual property rights to new products, enhancing our relationships and broadening our base of distribution partners, and deepening open interest in our core futures and options offerings.

We have further focused on building upon cloud-based data distribution capabilities as a more flexible and potentially cost-effective means of providing data to our clients.

In 2022, CME Group futures and options had an average daily volume of 23.3 million contracts, with a volume record in our equity asset class for the seventh consecutive year.

It was also a year of volume records for multiple products, including Ultra 10 Year Treasury Note futures, SOFR futures, Bitcoin futures, Micro E-Mini Equity Index futures and a record number of contracts executed via Basis Trade at Index Close.

We set records in the volume traded for our Micro E-Mini Equity Index futures in total, as well as for each of the Micro E-Mini Nasdaq-100, Russell 2000 and Dow 30 contracts.

In 2023, CME Group futures and options had a record average daily volume of 24.4 million contracts , with a volume record in our interest rates asset class for the second consecutive year.

It was also a year of volume records for multiple products, including Ultra 10 Year Treasury Note futures, SOFR futures, Bitcoin futures and a record number of contracts executed via Basis Trade at Index Close.

We continue to expand and deepen our customer base worldwide and offer customers around the world the most broad and diversified portfolio of benchmark products.

Some of our products introduced over the past two years include:

• E-mini Nasdaq 100 Weekly Options (2021)

• E-mini Russell 2000 Weekly Options (2021)

• Micro Bitcoin Futures (2021)

• Ether and Micro Ether Futures (2021)

• Micro Treasury Yield Futures (2021)

• Micro WTI Futures (2021)

• Global Emissions Offset (GEO) and Nature-based Global Emissions Offset (N-GEO) Futures (2021)

• Additional Cryptocurrency Reference Rates and Real-Time Indices (2022)

• CBL Core Global Emissions Offset Futures (2022)

• CBL Core Global Emissions Offset (C-GEO) Futures (2022)

• 20-year U.S.

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• Aluminum Options (2022)

• Canadian Wheat Futures (2022)

• Micro WTI Options (2022)

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• TBA futures for Mortgage-backed Securities (2022)

• Euro Short-Term Rate (€STR) Futures and RepoFunds Rate (RFR) Futures (2022)

In addition to the individual product launches noted above, we have completed many product extensions across our asset classes, including short-dated options products (Monday and Wednesday weekly options on Gold, Silver and Copper and Tuesday and Thursday weekly options on the E-Mini S&P 500).

• Euro Short-Term Rate (€STR) Futures (2022)

• Additional Cryptocurrency Reference Rates and Real-Time Indices (2022 and 2023)

• Event contracts on Bitcoin Futures (2023)

• Micro E-mini S&P MidCap 400 and Micro E-mini S&P SmallCap 600 Futures (2023)

• Offshore Renminbi Options (2023)

• Lithium Carbonate Futures (2023)

• Ether/Bitcoin Ratio Futures (2023)

• T-Bill Futures (2023)

• Options on Micro Gold Futures (2023)

• Cobalt Hydroxide Futures (2023)

• Micro Henry Hub Futures and Options (2023)

• Additional short-term Options on U.S.

Treasury Futures (2023)

In addition to the individual product launches noted above, we have completed many product extensions across our asset classes, including short-dated options products (Monday options on U.S.

Treasury Futures, Monday and Wednesday options on

WTI Crude Oil, Tuesday and Thursday options on E-mini Russell 2000, and Monday, Tuesday, Wednesday and Thursday options on Micro E-mini Nasdaq-100 and S&P 500).

We continue to expand and deepen our customer base worldwide and offer customers around the world with the most broad and diversified portfolio of benchmark products.

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Our penetration of these markets lags our development in the U.S., and we believe that there is room for significant growth and development of these financial markets.

In 2022, approximately 28% of our electronic

futures an d options volume was from transactions reported as outside the U.S.

In 2023, approximate ly 30% of our electronic futures and options volume was from transactions reported as outside the U.S.

and approximately 54% of our market data revenue was derived from outside the U.S.

We also achieved 27% growth in trading volume during Asian trading hours and 10% growth during European trading hours in 2022 compared to 2021.

We also achieved 13% growth in trading volume during European trading hours and 11% growth during Latin America trading hours in 2023 compared to 2022.

CME Group continues to introduce tools which assist our clients in managing their risks.

In 2021, we updated the FX Market Profile Tool and launched a Metals Market Profile and, in 2022, we launched an UST Market Profile.

The FX and Metals Market Profile Tool on Quant Analytics offers a simple but effective method for clients to compare and contrast our leading FX and metals products and liquidity pools side-by-side, which in turn enables clients to analyze their opportunity to minimize costs and achieve best execution by accessing highly complementary liquidity pools across cash and futures markets.

The FX and Metals Market Profile Tools on Quant Analytics offer simple, but effective methods for clients to compare and contrast our leading FX and metals products and liquidity pools side-by-side, which in turn enables clients to analyze their opportunity to minimize costs and achieve best execution by accessing highly complementary liquidity pools across cash and futures markets.

We expect to continue to expand this Quant Analytics suite in the future as well.

Our CME Liquidity Tool enables market participants to analyze liquidity across CME Group products during U.S., London or Singapore trading hours and was expanded to 37 products in 2021 to meet customer demand for our growing product suite.

CME Group Volatility Indexes (CVOL) comprises a total of 39 indexes, including six unique broad-based benchmarks such as the Treasury Volatility Index and Commodity Volatility Index.

In 2022, we launched real-time streaming versions of the CVOL indexes.

CVOL provide a representative measure of the market expectation of 30-day forward risk, comprising both end of day and live streaming values.

We have increased our customer base and continue to target cross-asset sales across client segments and across cash and futures platforms, driving global sales and generating new client participation across all regions.

Our CME Liquidity Tool enables market participants to analyze liquidity across CME Group products during U.S., London or Singapore trading hours and covers 37 products to meet customer demand for our growing product suite.

CME Group Volatility Indexes (CVOL) comprises a total o f 42 ind exes, including 7 unique broad-based benchmarks such as the Treasury Volatility Index and Commodity Volatility Index.

Our real-time streaming versions of the CVOL indexes provide a representative measure of the market expectation of 30-day forward risk, comprising both end of day and live streaming values.

We have increased our customer base and continue to target cross-asset opportunities across client segments and across cash and futures platforms, driving global sales and generating new client participation across all regions.

We have a long history of providing customer value and responsiveness and believe our products and services position us to help our customers adapt to and comply with new regulations, while enabling them to efficiently manage their risks.

We have a broad distribution network comprised of a combination of internal and external channels and proprietary front-end capabilities.

Diversify our Business and Revenue - Our acquisition of NEX in 2018 strengthened our role in global financial markets infrastructure and information services, adding complementary cash and OTC businesses and scale to our listed interest rate and FX products, while broadening our global client base.

In late 2023, we announced the launch of our new CME FX Spot+ as another tool for our customers to increase access, transparency and trading opportunities across spot FX and FX futures markets.

CME FX Spot+ an all-to-all spot FX marketplace that will connect liquidity between two trading environments, whereby spot FX participants will have expanded access to CME FX futures liquidity in OTC spot terms within an open, transparent, central limit order book environment, while FX futures market users will see expanded access to OTC FX liquidity.

We are expecting to start client testing in the second half of 2024.

Diversify our Business and Revenue - Our acquisition of NEX strengthened our role in global financial markets infrastructure and information services, adding complementary cash and OTC businesses and scale to our listed interest rate and FX products, while broadening our global client base.

We are positioned to take direct advantage of growth in treasury issuance, unwinding of the Fed’s balance sheet, liquid treasury holdings and the trading of treasury instruments, as well as growing repo activity in the U.S.

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The acquisition added strength in underlying customer marketplaces, especially around regional bank customers and other market participants outside of North America and expanded our market data solutions beyond futures and options into cash and OTC offerings.

During 2021, the Alternative Reference Rates Committee (ARRC) formally recommended the forward-looking term rates based on SOFR published by our subsidiary, CME Group Benchmark Administration Limited.

The ARRC formalized this recommendation in July 2021.

Through the end of 2022, we have licensed the CME Term SOFR to over 1,900 firms and over 7,000 users in more than 90 countries.

CME Group is well-positioned to capitalize on its ability to license CME Term SOFR, administered by our subsidiary, CME Group Benchmark Administration Limited.

CME Term SOFR is the only SOFR rate endorsed by the Alternative Reference Rates Committee (ARRC) and the Federal Reserve Board has formally endorsed the forward-looking term rates based on SOFR .

Through the end of 2023, we have licensed the CME Term SOFR benchmark to 2,975 firms and over 11,000 licensees in 100 countries.

In 2010, CME Group acquired a majority stake in Dow Jones Indexes, which was combined with S&P’s index business in 2012 to form S&P Dow Jones Indices LLC, of which CME Group now has a 27% ownership stake.

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In 2022, we invested $410.0 million in this joint venture to fund our portion of the acquisition of the IHS Markit indices business, which includes leading fixed income and credit indices, such as iBoxx, iTraxx and CDX.

In 2021, CME Group and IHS Markit established a 50/50 joint venture, OSTTRA.

We contributed to OSTTRA our post-trade businesses (Traiana, TriOptima and Reset) and IHS Markit contributed its MarkitSERV business.

In 2021, CME Group and IHS Markit (later acquired by S&P Global) established a 50/50 joint venture, OSTTRA.

We contributed to OSTTRA our trade processing/post-trade businesses (Traiana, TriOptima and Reset) and IHS Markit contributed

its MarkitSERV business.

OSTTRA serves as the leading optimization business and provider of progressive post-trade solutions for the global OTC markets across interest rate, FX, equity and credit asset classes.

In February 2022, IHS Markit was acquired by S&P Global.

Deliver Unparalleled Customer Efficiencies and Operational Excellence - With changing regulatory requirements for many of our customers, including additional margin requirements on uncleared trades, and the need for greater efficiencies, we have added tools to enable customers to manage clearing positions in our markets in an efficient manner.

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Our clearing services offer the ability to optimize collateral and capital efficiencies across portfolios within the clearing house while meeting the heightened regulatory requirements on derivatives.

The majority of our clearing volumes and activities are related to our listed futures and options, which represents

the majority of our open interest and collateral held against these positions.

The majority of our clearing volumes and activities are related to our listed futures and options, which represent the majority of our open interest and collateral held against these positions.

We also offer clearing services for OTC interest rate swaps, FX forwards and commodity swaps.

In 2023, we launched CME SPAN 2 for certain futures and options on energy products, an enhancement of our Standard Portfolio Analysis of Risk (SPAN) margin framework, which provides enhanced risk management capabilities in a single, unified interface across futures and options, cleared OTC products and portfolio margining programs.

In 2024, we are expecting to expand SPAN 2 to other asset classes.

As CME SPAN 2 is implemented, margins for diversified portfolios will consist of products using the enhanced CME SPAN 2 framework, in addition to the existing SPAN framework, ensuring appropriate levels of offsets will continue to be provided across products subject to the SPAN and SPAN 2 frameworks.

CME Group provides various tools and services to assist customers with capital and operational efficiencies, including:

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Cross-margining allows firms to achieve portfolio margin efficiencies for offsetting positions between two clearing houses, including CME and Fixed Income Clearing Corporation (FICC) or CME and Options Clearing Corporation (OCC), through reduced performance bond requirements.

Through an enhancement to our arrangement with FICC, in January 2024, we began offering enhanced capital efficiencies to our eligible clearing members when trading U.S.

Treasury securities and CME interest rate futures.

Partnership with Google Cloud - In November 2021, we announced a 10-year strategic partnership with Google Cloud to accelerate CME Group’s move to the cloud, which we expect will transform derivatives markets by expanding access and creating efficiencies for market participants.

The partnership will focus on expanding access to CME Group’s infrastructure, advancing real-time data and analytics capabilities, co-innovating new products and services, increasing efficiencies and driving resiliency in the financial markets’ ecosystem.

2022 was a foundational year, where we built the Cloud platform and successfully migrated some applications.

In 2023, we plan to accelerate our application migration, including launching and commercializing data products in the Cloud.

In 2022, we built our cloud instance on the Google Cloud platform.

In 2023, we have been executing against the plans to move our non-latency sensitive applications, including clearing and data, to the Cloud.

The migration of these applications will enable us to commercialize and launch new clearing and data products.

Patents, Trademarks and Licenses

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We protect our intellectual property rights by relying on trademarks, patents, copyrights, database rights, trade secrets, restrictions on disclosure and other methods.

We offer equity index futures and options on key benchmarks, including S&P, Nasdaq, Dow Jones, FTSE Russell and fixed income index futures on the BSBY indexes.

We offer equity index futures and options on key benchmarks, including S&P, Nasdaq, Dow Jones, FTSE Russell and fixed income index futures.

These products are listed by us subject to license agreements with the applicable owners of the indexes, some of which are exclusive.

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Our license for the S&P 500 Index will be exclusive for futures and options until one year prior to the termination of the S&P License Agreement, and non-exclusive for the last year.

The license for the other S&P stock indexes is generally exclusive for futures and options.

The license for the other S&P stock indexes

is generally exclusive for futures and options.

The term of the S&P License Agreement will continue until the date that is one year after the date that CME Group ceases to own at least 5% (accounting for dilution) of the outstanding interests in S&P Dow Jones Indices.

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A copy of the S&P License Agreement has been filed as a material contract.

CME Group is the owner of CME Term SOFR, a daily set of forward-looking interest rate estimates, calculated and published for 1-month, 3-month and 12-month tenors.

CME Term SOFR was endorsed by the ARRC convened by the Federal Reserve Board and the New York Federal Reserve and the Board itself under its Final Rule published in January 2023, which Rule has generally designated CME Term SOFR as a replacement rate for USD LIBOR under the LIBOR Act.

Additionally, CME Group is the distributor of CME Term SOFR, a daily set of forward-looking interest rate estimates, calculated and published for 1-month, 3-month, 6-month and 12-month tenors and administered by CME Group Benchmark Administration Limited, a U.K.

regulated subsidiary.

We cannot guarantee we will be able to maintain the exclusivity of our licensing agreements with S&P, Dow Jones, Nasdaq and FTSE Russell or be able to maintain existing exclusive and non-exclusive licensing arrangements beyond the term of the current agreements or that any renewal will be on terms as favorable to us.

In addition, we cannot guarantee that others will not succeed in creating stock index futures based on information similar to that which we own or have obtained by license, or that market participants will not increasingly use other instruments, including securities and options based on the S&P, Dow Jones,

Nasdaq or FTSE Russell indexes, to manage or speculate on U.S.

stock risks or clients to select another interest rate alternative.

Parties also may succeed in offering indexed products that are similar to our licensed products without being required to obtain a license, or in countries that are beyond our and/or our licensors' jurisdictional reach.

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• brand and reputation;

• efficient and secure settlement, clearing and support services;

• efficient and secure clearing, settlement and support services;

• depth and liquidity of markets;

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frequency and quality of new product development;

and efficient, secure settlement, clearing and support services, distinguish us from others in the industry.

and efficient, secure clearing, settlement and support services, distinguish us from others in the industry.

We believe that in order to maintain our competitive position, we must continue to expand globally;

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maintain liquidity and low transaction costs;

continue to strengthen our risk management capabilities and solutions;

continue to strengthen our risk management

capabilities and solutions;

and implement customer protections designed to ensure the integrity of our market and the confidence of our customers.

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Our competitors include, among other entities, exchanges such as Intercontinental Exchange, Inc.

(ICE), the Hong Kong Exchanges and Clearing Limited and Deutsche Börse AG.

(ICE), the Chicago Board Options Exchange (CBOE), Euronext N.V., the Hong Kong Exchanges and Clearing Limited and Deutsche Börse AG.

We have also seen the emergence of new players in the derivatives exchange business, in some cases backed by market makers and broker-dealers, as well as crypto platforms.

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In recent years there has been increased competition in the provision of clearing services, and we expect competition to continue to increase in connection with compliance with Dodd-Frank, EMIR 2.2, Basel III, MiFID II and other various laws and regulations.

Our competitors in the clearing services space include, among others, companies such as ICE, LCH Group, the OCC, CBOE Clear, Depository Trust & Clearing Corporation, Hong Kong Exchanges and Clearing, Japan Securities Clearing Corporation, LME Clearing and Deutsche Börse AG.

In light of the implementation of new regulatory requirements and other financial

services reforms, we believe other exchanges and infrastructure providers also may undertake to provide clearing and other related post-trade services in the U.S.

Our competitors in the clearing services space include, among others, companies such as ICE, LCH Group, OCC, CBOE Clear, Depository Trust & Clearing Corporation, Hong Kong Exchanges and Clearing, Japan Securities Clearing Corporation, LME Clear and Deutsche Börse AG.

In light of the implementation of new regulatory requirements and other financial services reforms, we believe other exchanges and infrastructure providers also may undertake to provide clearing and other related post-trade services in the U.S.

as CFTC-regulated clearing organizations.

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Competition in our Cash Markets Business

The cash markets businesses face substantial competition across a wide and growing array of venues.

The cash markets businesses face substantial competition across a wide array and growing number of venues.

In FX, the marketplace is highly fragmented, and there is competition from other electronic communication networks, single-dealer platforms, bank-owned multi-participant platforms, streaming and request for quote services, trading venues tied to data platforms, voice brokers, other broker enabled platforms and other venues.

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repo, and European bond trading, as well as other products such as corporate bonds, municipal bonds, mortgage-backed bonds and agencies, and a multitude of competitors and new entrants offering single-dealer liquidity, bank-owned multi-participant platforms, streaming and request for quote services, and other broker and exchange-enabled platforms.

There is also increasing competition from foreign government entities providing financial inducements to establish new FX trading venues in their countries.

A key strategy of a number of these alternative and emerging venues, is to offer their services at a significantly lower price in comparison to the established EBS and BrokerTec platforms, with the aim of enticing customer business, and the resulting market share, away from our markets.

Competition in our Market Data Business

Technology companies, market data and information vendors and front-end software vendors also represent actual and potential competitors because they have their own substantial market data calculation and distribution capabilities that could serve as alternative means for receiving open market data feeds instead of connecting directly to our exchange.

Multiple other industry participants offer both referential and indicative pricing alternatives to CME offerings, which are widely distributed and available across a variety of media.

Multiple other industry participants offer both referential and indicative pricing alternatives to our offerings, which are widely distributed and available across a variety of media.

Distributors and consumers of our market data also may use our market data as an input into products that compete against our traded or cleared products.

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Regulatory Matters

Our businesses are regulated and serve a customer base that includes regulated market participants, and as such, we are subject to extensive regulation, primarily in the United States and Europe.

Our businesses are regulated and serve a customer base that includes regulated market participants, and as such, we are subject to extensive regulation, primarily in the U.S., U.K.

Developments in the regulatory environment therefore have the potential to significantly affect our businesses.

Please also refer to the discussion below and in "Item 1A - Risk Factors" beginning on page 16 for a description of regulatory and legislative risks and uncertainties.

Regulation of our Derivatives Business, CME Clearing and our SEF

Our operation of U.S.

futures exchanges, CME Clearing and our SEF is subject to extensive regulation by the CFTC that requires our regulated subsidiaries to satisfy the requirements of certain core principles relating to the operation and oversight of our markets and our clearing house.

Regulation of our Derivatives Business, CME Clearing, the NEX SEF and Swap Data Repositories

Our operation of our U.S.

futures exchanges, CME Clearing and the NEX SEF are subject to extensive regulation by the CFTC that requires our regulated subsidiaries to satisfy the requirements of certain core principles relating to the operation and oversight of our markets and our clearing house.

The CFTC carries out the regulation of the futures and swaps markets and clearing houses in accordance with the provisions of the Commodity Exchange Act as amended by, among others, the Commodity Futures Modernization Act and Dodd-Frank.

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Securities and Exchange Commission (SEC) as a broker-dealer and alternative trading system operator.

It also subjects us to regulation by authorities in the E.U.

as a multilateral trading facility and regulated market and by the applicable regulators in

Singapore and Canada.

Our EBS business holds various permissions, approvals and exemptions globally, including those that subject certain of its activities to CFTC, FCA, AFM, Monetary Authority of Singapore, Australian Securities and Investments Commission and Hong Kong Monetary Authority oversight.

BrokerTec is also subject to regulation by the FCA in the U.K., as a multilateral trading facility, in the E.U., under the AFM, as a regulated market and by the applicable regulators in Singapore and Canada.

Our EBS business is regulated by the Commodity Futures Trading Commission (CFTC) as a registered swap execution facility (SEF) and by the Financial Conduct Authority (FCA) as a MiFID Multi-Lateral Trading Facility (MTF) and holds various permissions, approvals and exemptions globally, including those that subject certain of its activities to CFTC, FCA, AFM, Monetary Authority of Singapore, Australian Securities and Investments Commission, Hong Kong Monetary Authority and Canadian oversight.

The settlement of matched principal and exchange-traded businesses requires access to clearing houses either directly or through third-party providers of clearing and settlement services.

BrokerTec Americas is a member of the Fixed Inocme Clearing Corporation, through which it clears U.S.

BrokerTec Americas is a member of the Fixed Income Clearing Corporation, through which it clears U.S.

Treasury and repo products.

Our BrokerTec business operated in the EU also connects to LCH Limited, LCH SA, BME Meff Clear and Cassa di Compensazione e Garanzia (CC&G), who acts as central clearing participants in the European and U.K.

Gilt Repo markets.

Regulation of our Market Data Business

Our subsidiary, CME Group Benchmark Administration, is a registered benchmark administrator, authorized and supervised by the FCA under the UK Benchmark Regulations.

CME Group Benchmark offers a variety of different multi-asset class data products, including CME Term SOFR.

Our subsidiary, CME Group Benchmark Administration Limited, is a registered benchmark administrator, authorized and supervised by the FCA under the UK Benchmark Regulations.

CME Group Benchmark Administration Limited administers a variety of different multi-asset class data products, including CME Term SOFR.

Key Areas of Focus

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Congress, Illinois General Assembly and State of New Jersey Legislature.

Additionally, from time to time, including this fiscal year, the proposed U.S.

Additionally, from time to time, the proposed U.S.

Presidential budget request has included a proposal to impose a user fee to fund all or a portion of the budget of the CFTC.

Legislation would be necessary to impose such a fee.

Federal legislation was also recently proposed by Congress that would impose a user fee on digital asset spot markets to fund CFTC regulation of those assets.

Federal legislation has previously been proposed by Congress that would impose a user fee on digital asset spot markets to fund CFTC regulation of those

Such a user fee, if adopted, could potentially be expanded to apply more broadly to the futures and options markets.

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• Certain provisions in relation to the E.U.

Regulations on Benchmarks have yet to come into effect, and prices and data provided by CME Group for use by E.U.

supervised entities and use of those benchmarks may be impacted.

Regulations on Benchmarks have yet to come into effect, as the E.U.

has extended transitional periods until the end of 2025, and has proposed further legislative changes to apply from 2025 onwards.

It remains possible that data, pricing and analytics provided by CME Group for use by E.U.

supervised entities and use of those benchmarks may be impacted in the future.

• Concerns that European legislators will prohibit or restrict exclusive licenses for benchmark indexes, which might impact the profitability of several of our most popular contracts.

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Treasury securities as collateral could result in increased costs to us and our clearing firms.

• The outcome of the debate regarding the regulation of cryptocurrencies, which may impact our existing offerings or our ability to provide future offerings.

• New regulations governing treasury market structure, including potential clearing obligations or promotions of all-to-all cash treasury models.

The SEC has issued a rule proposal regarding central clearing of U.S.

• The outcome of the debate regarding the regulation of cryptocurrencies, which may impact our existing offerings or o ur ability to provide future offerings.

• New regulations governing treasury market structure, including potential clearing obligations or promotions of all-to-all cash models.

The SEC adopted a rule in December 2023, mandating central clearing of U.S.

Treasury securities and repurchase agreements.

how the SEC finalizes this rule could have an impact on trading in our markets.

This will require infrastructure changes to facilitate access to clearing for all participants, including indirect participants, to ensure continued liquidity in these critical markets (i.e., ensure access to FICC's clearing and settlement services for indirect participants).

• Basel III Endgame rules.

In July 2023, the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency jointly proposed changes to the regulatory capital framework for global systematically important banks (GSIBs), to implement international capital standards issued by the Basel Committee on Banking Supervision.

The proposal would require GSIBs to hold increased capital for OTC exposures that they centrally clear for clients.

• Financial Stability Board (FSB) consultation proposing that central counterparties (CCPs) maintain separate, dedicated resources and tools for resolution.

The FSB cannot dictate the implementation of its standards, including in the U.S., but has historically exerted pressure on local jurisdictions to adopt its proposals.

While the CFTC has not indicated any intention to support such a proposal, if it were supported in the U.S., this proposal could negatively impact cleared markets by increasing costs, reducing participation, and disincentivizing default management participation.

The FSB consultation also supports early intervention by resolution authorities which could preempt CCP recovery efforts and the role of the CFTC.

• The potential for regulatory or policy actions that could result in changes to market structure for the clearing of derivative transactions, which may impact our business model or the competitive landscape of the industry.

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and the remaining 38% (approximately 1,365) working in our various non-U.S.

locations (Australia, Brazil, Canada, China, France, Hong Kong, India, Israel, Japan, Netherlands, Singapore, South Korea, Sweden, Switzerland and the U.K.).

locations (Australia, Brazil, Canada, China, France, Hong Kong, India, Japan, Mexico, Netherlands, Singapore, South Korea, Sweden, Switzerland and the U.K.).

We recognize that fostering a diverse and inclusive global culture is critical to our business success.

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• We offer a wide range of benefits designed to support our employees’ health and well-being, retirement needs and work/life balance.

• We provide a variety of avenues for employees to grow their expertise, including tuition assistance for continuing education, onsite professional development training courses, access to external seminars and technical skills training, as well as an integrated series of leadership development programs to prepare employees for each stage of their careers.

• We provide a variety of avenues for employees to grow their expertise, including tuition assistance for continuing education, onsite and virtual-led professional development training courses, access to external seminars and technical skills training and over 10,000 online educational courses.

We also offer an integrated series of customized leadership development programs to prepare employees for each stage of their careers.

• Our competitive compensation programs align employee rewards with shareholder interests and emphasize our pay-for-performance philosophy.

• Our Employee Resource Groups (ERGs) are essential to fostering an inclusive culture grounded in mutual respect.

All employees are eligible to join our ERGs and employees are encouraged to form new ERGs that align with our shared mission and values, creating communities around professional and personal interests .

We conduct regular employee engagement surveys and we monitor our performance against specific voluntary turnover, open role placement and internal promotion metrics to understand where further workforce investments may be necessary.

During fiscal year 2022, our performance against these metrics was:

• Our Employee Resource Groups (ERGs) play a crucial role in advancing a more diverse and inclusive culture.

By creating communities of colleagues with shared backgrounds and interests, our ERGs help us attract, develop and retain the critical talent we need to continue to grow our business and ultimately enhance the employee experience for all.

Membership is open to all CME Group employees around the globe.

We regularly conduct employee engagement surveys.

We also monitor human capital metrics, such as voluntary turnover, internal placement for open roles and promotions to understand where further workforce investments may be necessary.

During 2023, our performance against these metrics was:

• 5.6% voluntary turnover

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Our Diversity and Inclusion (D&I) Council is responsible for driving our corporate D&I strategy.

Members of our management team and employees from across our global workforce serve on the Council, representing a wide variety of backgrounds and perspectives.

For more information regarding our sustainability practices and to review our annual Corporate Citizenship & Sustainability Reports, including our report for 2022 when issued, please visit:

Members of our management team and employees from across our global workforce serve on the D&I Council, representing a wide variety of backgrounds and perspectives.

For more information regarding our D&I and sustainability practices and to review our annual Environmental, Social and Governance Reports, including our report for 2023 when issued, please visit:

https://www.cmegroup.com/company/corporate-citizenship/esg.html.

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Lynne Fitzpatrick, 45.

Fitzpatrick has served as Senior Managing Director & Deputy Chief Financial Officer since February 2022.

She previously served as Managing Director of Corporate Development and Treasurer of CME Group since 2017, leading the company’s business development, mergers and acquisitions, CME Ventures and corporate treasury functions.

Fitzpatrick has served as our Chief Financial Officer since April 2023 and in her role is responsible for overseeing the company's corporate finance, accounting, investor relations, treasury, real estate, business development, corporate strategy, strategic investments, pricing and procurement functions.

She previously served as Deputy Chief Financial Officer since 2022 and Managing Director of Corporate Development and Treasurer of CME Group since 2017.

Since joining the company in 2006, Ms.

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Julie Holzrichter, 55.

Holzrichter has served as our Senior Managing Director, Chief Operating Officer since 2014 and in February 2022, her role expanded to oversee Global Operations and CME Clearing.

Holzrichter has served as our Chief Operating Officer since 2014 and in February 2022, her role expanded to also oversee our Clearing and Post-Trade division.

She previously served as our Senior Managing Director, Global Operations from 2007.

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He previously served as General Counsel of the CFTC from 2013 to 2017.

Marcus also served as the CFTC's Deputy General Counsel for Litigation and as an Assistant to the Solicitor General of the United States.

Marcus also served as the CFTC's Deputy General Counsel for Litigation and as an Assistant to the Solicitor

General of the United States.

His career also includes senior roles at other nationally recognized law firms and he began his career as a clerk for Judge Jose Cabranes of the U.S.

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Tim McCourt, 45 .

McCourt has served as Senior Managing Director, Global Head of Equity and FX Products since February 2022.

He is responsible for leading the development and execution of the company’s global equity index, foreign exchange, cryptocurrency and alternative investment product strategies.

He serves on the CME Ventures Investment Committee and the S&P Dow Jones Indices U.S.

McCourt has served as Senior Managing Director, Global Head of Financial and OTC Products since June 2023.

Before that he was the global head of Equity and FX Products.

He is responsible for leading the development and execution of the company’s global interest rate, equity index, foreign exchange, OTC, cryptocurrency and alternative investment product strategies.

He also serves on the S&P Dow Jones Indices U.S.

Advisory Panel.

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Hilda Harris Piell, 56 .

Piell has served as Senior Managing Director and Chief Human Resources Officer since 2007.

Piell has served as our Chief Human Resources Officer since 2007.

A practicing attorney for seventeen years, Ms.

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District Court for the Northern District of Illinois.

Pietrowicz, 58.

Pietrowicz has served as Senior Managing Director and Chief Financial Officer since 2014.

Previously, Mr.

Pietrowicz served as our Senior Managing Director, Business Development and Corporate Finance since 2010.

Pietrowicz joined us in 2003 and since then has held various positions of increasing responsibility, including Managing Director and Deputy Chief Financial Officer from 2009 to 2010 and Managing Director, Corporate Finance and Treasury from 2006 to 2009.

Pietrowicz also serves as a director of S&P Dow Jones Indices LLC and on the board of the World Federation of Exchanges.

Pietrowicz announced his plans to retire in 2023 and Ms.

Fitzpatrick will succeed him.

Derek Sammann, 55 .

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Sammann served as Managing Director, Global Head of FX Options and Structured Products at Calyon Corporate and Investment Bank in London from 1997 to 2006.

Sammann serves as a member of the Board of Directors of the following entities:

the Dubai Mercantile Exchange, the COMEX Board of Governors and the Commodities Markets Council, where he also serves as Treasurer.

He also serves on the Shanghai Gold Exchange’s International Advisory Board, the Commodity Futures Trading Commission's Agricultural & Energy and Environmental Markets Advisory Committees, and the Security Traders Association’s Listed Options Committee.

Suzanne Sprague, 43.

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Tobin is a registered certified public accountant.

Sean Tully, 59 .

Tully has served as Senior Managing Director, Global Head of Rates and OTC Products since February 2022.

He previously served as Senior Managing Director, Financial and OTC Products of CME Group since 2014 and as Senior Managing Director, Interest Rates and OTC Products during 2014.

Prior to these roles, he served as Managing Director, Interest Rate and OTC Products since 2013 and as our Managing Director, Interest Rate Products since joining us in 2011.

Before joining the company, Mr.

Tully most recently served as Managing Director, Global Head of Fixed Income Trading at WestLB in London.

Kendal Vroman, 52.

Vroman has served as our Senior Managing Director, Chief Transformation Officer since November 2021.

Vroman has served as our Chief Transformation Officer since November 2021.

He previously served as Senior Managing Director, International and Optimization Services since February 2020 and as our Senior Managing Director, Cash Markets and Optimization Service since 2018.

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Julie Winkler, 49 .

Winkler has served as our Senior Managing Director, Chief Commercial Officer since 2016.

Winkler has served as our Chief Commercial Officer since 2016.

She leads the company’s sales, product marketing, research and product development, data analytics, and innovation lab functions, as well as the data services business line.

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Our corporate governance materials may also be found on our website.

The SEC also maintains an Internet site that contains reports, proxy and information statements, and other reports that we file or furnish with the SEC at http://www.sec.gov.

The SEC also maintains an Internet site that contains reports, proxy and information statements, and other reports that we file or furnish with the SEC at http://

Copies of these materials also are available to shareholders free of charge upon request to Shareholder Relations, officeofthesecretary@cmegroup.com.

Information regarding our sustainability practices is available in our annual Corporate Citizenship & Sustainability Reports, including our report for 2022 when issued, at the following:

Information regarding our sustainability practices is available in our annual Environmental, Social and Governance Reports, including our report for 2023 when issued, at the following:

https://www.cmegroup.com/company/corporate-citizenship/esg.html.

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 1. Business