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04:40 PM
Lauren Paul
Lauren Paul
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Jim Krause Improves Performance at CME

Preparations for merger with Chicago Board of Trade under way, Capability in options and over-the-counter trading arena expanding, New compression approaches minimize bandwidth utilization and storage growth

Chicago Mercantile Exchange
Jim Krause
Managing Director and CIO

Jim Krause Chicago Mercantile Exchange

During his 22 years at CME, Krause has held various positions in systems development and clearing, including managing director of operations and enterprise computing; and director of clearing, regulatory, administration systems/system development. During the 1990s, he was responsible for the design, development and implementation of the CME Globex electronic trading platform and the Clearing 21 clearing system. Prior to joining CME in 1985, Krause held positions at MCC Powers, Pullman Inc. and Shure Brothers.

B.S. in computer science, Michigan State University; M.B.A. in finance and accounting, Southern Illinois University.

Chicago Mercantile Exchange
20 South Wacker Drive
Chicago, IL 60606

In June 2007, 8 million contracts were traded daily on average.

At CME, it has been Phupinder Gill, president and COO. I'm constantly learning more about the business and how to deal with people.

"Leadership Secrets of Attila the Hun," by Wess Roberts.

What's Next?
I constantly watch Moore's Law. I will watch every vendor's new product according to speed and reliability. We also talk to vendors to see how they can build products to suit us. We feel we are leading what they should give us -- improved speed, reliability of the hardware and fault tolerance. It sort of all wraps into one. Microseconds matter. Milliseconds matter.


IT Budget:


Key Technology Management:


Size of Technology Team:

More than 600.

Percent of IT Projects Outsourced:

Very low percentage.

Key Technology Partners:

HP, Sun, IBM, Dell, Cisco.

Success Metrics:

We try to figure out what customer satisfaction is [for the end customers]. In e-trading, the real metrics for customer satisfaction are speed and reliability. The faster and more reliable you are, the better satisfied your customers are and the more they trade. That has a lot to do with our phenomenal growth rates.


Continuing Merger Activity

There will be additional merger activity. There are still a lot of processes [that must be integrated]. The trading floors will be merged in the second quarter.


The other issue in our basic core business is continued performance and capacity upgrades. The growth in market data has been astronomical. We have come up with approaches that attempt to minimize the growth in bandwidth utilization, methods for compressing the data and limiting the amount of bandwidth and storage growth. We need to limit costs.


Preparing for CBOT Merger

We initiated the deal late last year and received approval in June. In this interim period, we have worked at doing all the prep work in order to complete the integration and merger and start achieving the synergies we said would happen. We expect approval of that merger. [July 9 was the date of the shareholder vote.] We will work feverishly to get the pieces in place to become one company. In the first quarter of 2008 our e-trading systems will become one, the majority on the CME Globex platform.

Expanding Options

We continue to work on expanding our capability in options. We are launching options on the major metal and energy products. We're expanding our options. We are looking to further expand the capabilities into forwards and swaps, etc. -- that is one of the first initiatives into the over-the-counter trading arena.

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