It was very disappointing to hear of the massive price increases for CME data feed.
There are eight of us in our office and upon analysis we believe that if we keep our current 7 quote systems, 7 electronic order platforms and 3 spreaders the extra yearly cost will be $6500 per employee! There is no telling how much it will cost many of our customers (who will likely ask us for lower rates as a result) as well as RCG and other FCM?s (who will likely want to charge us more to recoup some of their costs). As with burdensome taxation these increases make it harder for us to operate efficiently and in turn, grow our business.
As a regulator the CME has encouraged us to have redundant systems in case of a simple malfunction or a natural disaster and now there seems to be no limit on how much the CME can charge us to use those systems. Although there is global competition within the futures industry the CME appears to have a type of domestic monopoly on many of the products that we use and we feel taken advantage of. Of course we expect price increases from time to time for services but the size of these are shocking. I have always wondered why the CME would not want as many people as possible to have low cost quotes as a way to encourage trading. Years back it seemed we worked in partnership with the CME and it was a very customer friendly operation.
Last night our office had dinner with a couple of representatives from an FCM in Chicago who has asked for our business for many years. Practically the whole conversation was about how the CME has turned its back on the very customers who have supported the CME for years and how the stockholders have become much more important than the customers. During the conversation I was thinking what it would be like if some or our customers were having a similar conversation about us. I would be horrified! As FCM?s, IB?s and Brokers we are held to a certain ethical standard and required not to take advantage of our customers just because we can. It is hard to understand why the CME is not held to the same standard. Anyone can understand the need to maximize stock value but is it better to raise revenue by over- taxing your constituents or by helping them grow their businesses and increasing the revenue stream over the long run?
Best regards,
George Enloe, Partner
Amarillo Brokerage Company
