Good day, everyone, and welcome to the CME Group third quarter earnings call. At this time, for opening remarks and introductions, I would like to turn the conference over to Mr. John Peschier.

Thank you all for joining us. Craig Donohue, our CEO, and Jamie Parisi, our CFO, will spend a few minutes outlining the highlights of the third quarter. And then we will open up the call for your questions. Also joining us for participation in the Q&A session is Terry Duffy, our Executive Chairman; Rick Redding, our Head of Products and Services. We have Phupinder Gill and Kim Taylor calling in from New York. Before they begin, I will read the Safe Harbor language. Statements made on this call and in the accompanying slides on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the SEC, including our most recent Form 10-K and Form 10-Q, which are available on the Investor Relations portion of the website. During this call, we will refer to GAAP and non-GAAP pro forma results. A reconciliation is available in our press release, and there is an accompanying file on the Investor Relations portion of our site that provides detailed quarterly information on a GAAP and pro forma basis. With that, I would like to turn the call over to Craig.

Thank you for joining us this afternoon. The third quarter has seen many key developments in our business, including the completion of the NYMEX acquisition, record volumes in our equity and FX product lines, and the announcement of our CDS initiative, which will facilitate migration of existing CDS transactions to our clearing house, allow for submission of bilaterally-executed trades into clearing, and provide an optional electronic platform for execution and clearing of new CDS trades. I will discuss each of these items in detail in a moment, but first I would like to share a few thoughts regarding the recent and unprecedented market turmoil. Throughout September and October tumultuous market conditions were driven in large part by concerns about counter-party credit risks. The ensuing upheaval in financial markets has affected us all and continues to prompt regulatory and legislative action from governments around the world. CME Group’s proven risk management and financial safeguard techniques have allowed our markets to continue to operate above the fray of counter-party credit concerns. During September and October our markets remained deeply liquid, daily pay and collects took place on schedule and without incident, and has always been true over our 110 year history, no customers lost any money due to counter-party failure. What we are most proud of is that this is business as usual for us. Our markets, our clearing methodology, and our technology are designed for robust, seamless functionality during the most chaotic conditions imaginable. These systems are backed by management and staff with extensive experience and a deep commitment to principled, transparent, secure, and efficient markets. While we are pleased with our track record and historical performance, by no means do we feel complacent. We continue to look for ways to build on our proven strength and create value for our…

Despite the turmoil brought about by the credit crisis, CME Group turned in a solid financial performance. The third quarter was also a busy one from a financial perspective. We closed the NYMEX transaction, entered the debt markets, began our share buyback program in mid-September, completed the sale of the legacy CBOT metals business, and started winding down FXMarketSpace. Today I will go through the details of Q3 on a pro forma basis as if we owned NYMEX and CBOT for all periods considered. We have also posted a view of the quarter, including the NYMEX revenue expense and shares from August 25 forward on our website as I know some of you model the business that way. Finally, I will touch on a few of the non-core and merger-related items included in our GAAP statements. Let me start with the pro forma results. On a pro forma basis we generated $787.0 million in revenue for the quarter and $518.0 million of operating income. While average daily volumes were down 7% year-over-year, driven solely by interest rate volumes, a strong rate per contract in Q3 and disciplined expense management more than offset the cyclical volume decline. The rate per contracts for the legacy CME business was $0.659, up 2% sequentially and up 6% versus Q3 2007. The primary mix drivers of the increase of the increase were a lower percentage of interest rate products and a slightly higher proportion of non-member activity. On the NYMEX side the average gross rate was $1.57, up 1% both sequentially and year-over-year, driven primarily by a larger percentage of trades cleared through ClearPort, a higher percentage of COMEX metals volume, and a higher percentage of non-member volume. Now turning to the quotation data fees. They were $92.0 million for the quarter, up 24% from…

(Operator Instructions) Your first question comes from Analyst for Roger Freeman – Barclays. Analyst for Roger Freeman – Barclays: The first question, I hate to harp on the volume issue, which obviously has been around for more than a year now, but you gave a lot of color on the interest rate side so I’m hoping that you could just give a little more in terms of what you think are the biggest factors and what you would be looking for in terms of the normalization of that market. And then, related to that, there has been a lot of focus on the hedge fund community and you also gave a little bit of color there but with all the redemptions that they are probably facing, de-leveraging and so forth, maybe you can give us a little more clarity around how your hedge fund customers break down, how much of the volume they are and how much is really concentrated in the biggest guys, arguably the ones that maybe are better positioned, and maybe not so well positioned hedge funds out there.

As far as the hedge funds are concerned, what we have seen in the market place is a lot of the smaller funds having difficult times and actually a number of them shutting down their operations. But I think it is important to note that those typically are not our customer base. Most of the hedge funds that are our customer base are in these larger hedge funds that are well established and are mostly in the global macro and multi-strategy areas. What we said was their volume was around 10% and that was, on a percentage basis, down very slightly from previous quarters. So as much talk as there is out there in the market about the health of the hedge funds, we have seen a very little change in their volumes over this year. I think the bigger issue with the hedge funds is actually the lack of conviction a lot of them have in investment themes. So a lot of them are sitting on tremendous amounts of cash, both anticipating redemptions at the end of the year, but also when that gets out of the way, there seems to be an awful of cash that something is going to have been with it. So that likely will be moved in one of the asset classes and this is a time where it’s very fortunate that we are in every asset class so we will be able to take advantage of whatever asset class they find or the asset classes they find attractive. A little more color on just kind of the overall volumes. As we said, with as much said with the banks and with a couple of banks going out of business or being merged out in the third quarter, they were still in that 15%…

First of all there has been an awful lot of work done, not just by us by others as well, in a fairly short period of time, to try to bring solutions to the CDS market that include central counter-party clearing services. We have been working very extensively with the regulators on that as well as bringing our offering to market in terms of marketing to both the sell side and the buy side. And I would say that there is an awful lot of interest in discovery that people are doing right now to try to understand how these competing offerings will work, what the risk methodologies will be, what’s the structure of the entity, what’s the creditworthiness of it, how can they participate, etc. and I think that process is still reasonably early. We literally have people who are working very hard to get out and talk to the sell-side community as well as the buy side to help them understand those different issues. So it’s still early stages yet. I would say that there is a divergence of views among the sell side and the buy side on issues like product construction, breadths of solution. For example, should the products be limited to indexed products or should they extend to single-name, should they be Europe- and U.S.-based or more limited. Should there be an execution facility or only a clearing facility. So one of the things we are doing is talking to people and trying to gain input on that. I think also one of the key issues we’re finding as we’re out talking to many people on the buy side is whether a solution that doesn’t include the buy side in the central counter-party clearing service is really effective in that obviously many of the buy-side participants are concerned not just about limiting systemic risks between and among the dealer community but also between the buy side, or the client segment of the market, and the dealer community. And that is certainly a key advantage that we provide. So I think the best answer is that we are working hard to try to make sure people understand our offering, understand the comparative differences between what we provide and what the other competitors in the market place will be providing. And we’re working hard to try to generate support for what we’re doing. Analyst for Roger Freeman – Barclays: On the acquisition of the synergies, you have a lot of moving pieces obviously, so do you have a set number for the $150.0 million on the CBOT and the $60.0 million of NYMEX, how much of the expenses you have actually realized to date in the run rate?

Right now on the run rate we are at about $137.0 million in the third quarter and by year end we should be at the $150.0 million run rate for the Board of Trade synergies. It’s still very early in the game on the NYMEX synergies. We will realize those over the next 12 to 18 months and as you have seen we did announced the staff reductions of about 150.

Your next question comes from Richard Repetto - Sandler O'Neill & Partners. Richard Repetto - Sandler O'Neill & Partners: Just a follow-up on the CDS. Just trying to understand what’s the process here? It’s very much in the press about the New York Fed. But what would you expect to come, what would be the best-case scenario, the process that could get you into business here, as you work with the regulators?

It’s a good question but it’s difficult to answer in part because we can’t speak for the regulators. What I think is fair to say is we’ve working for quite some time with the various regulators, which include the New York Fed, and the SEC and the CFTC, and we are trying to work through that process with them. Ultimately they will determine the time frame within which they will act on the various requests that we have in front of them. A lot of work and time has been put into this, not just by us, but by those regulators as well. And I know that they have a sense of wanting to see these solutions come to market as quickly as possible, subject to making sure that they have satisfied themselves on how these things will work. So I don’t have a great answer for that. I mean, operationally we have already indicated that we are prepared very imminently to implement this. But it will require regulatory approval. Richard Repetto - Sandler O'Neill & Partners: A month from the time that you talked about it would be about next week, am I correct?

Correct. And so it’s just a question now of getting the regulatory approvals that are necessary. Richard Repetto - Sandler O'Neill & Partners: Our investors are definitely trying to sort out what is cyclical and what is secular and I appreciate the information on the customer mix. Do you see any secular changes here? I’m hearing about the percentage mixes not changing between bank proprietary and hedge funds, but could we just have the coincidence where the secular changes are driving everybody down in the same percentages?

There is no algorithm we can give you on that, but I do think that many of the longer-term secular drivers of growth in the industry remain. We have increased volatility, increased uncertainty, and I think it’s fair to say increased need for risk management products, hedging, risk-transfer products. I think we’re still finding, in our own marketing and sales efforts, that there’s increased sophistication among investors about how to use these products for a broad range of trading strategies that even go beyond hedging and infringement. And it is clear to us, anyway, that the globalization trend is continuing and that we will see tremendous growth in these markets on a global basis, certainly including emerging markets, over the course of the next decade. So I don’t really see those things changing for the long run.

And I think one thing that we did see in the third quarter and we continue to see is the high-velocity algorithmic guys actually increasing their activity. But that makes sense, in these high-volatility markets and also as people’s ability to hold positions for long periods of time has been affected by the credit crisis. So kind of all the things that you would expect to see, given the market conditions, we are seeing. Richard Repetto - Sandler O'Neill & Partners: On the buyback, I do the math and it looks like the average purchase price per share was $352. Were you blacked out in October from purchasing your own shares?

Basically what we’ve done is we’ve put a plan in place shortly after we closed the NYMEX transaction and so that plan is in place and operating and there’s aspects of that plan that are opportunistic in nature.

Your next question comes from Patrick O'Shaughnessy - Raymond James.

Curious if you can tell us about how do you think the decision making process is going to work as far as the CDS clearing offering, who do you think is going to be making the decision here? Is it the dealer community? Is it the regulators? Are they going to make it in conjunction? How do you think that’s all going to work out?

I think it’s very difficult to speculate on that and I don’t think we want to be presumptuous about what the regulatory community will ultimately decide. I think it’s fair to say that their interest is in helping address some of the risk issues that exist in the way the market is currently organized and functioning and it seems to us, anyway, that they are working well with everybody to try to facilitate their ability to bring these solutions to market. And we are expecting that that will be the case. There will be more than one competitor in this market, that we will be one of them. And that ultimately our success or failure will depend on whether the market participants find value in what we’re offering.

And a follow-up CDS question. How would you say that your CDS clearing offering would differentiate itself from some of the other offerings that some of our competitors are throwing out there? You have mentioned that you are probably farther along in the development process, but how else would you say that what you have is differentiated from what other people are suggesting?

Well, to speak to our virtues and without criticizing others, we certainly feel like we have tremendous financial capacity. I think if you looked at the amount of collateral that we hold on a daily basis, which exceeds $100.0 billion, the fact that we have a financial safeguards package worth $7.0 billion, the fact that we do daily pays and collects of approximately $5.0 billion, and the fact that we have been in this business for more than 110 years with a tremendous base of experience in dealing with volatile products and tumultuous market conditions, and I think an extraordinary reputation for risk management capabilities, I think that’s a significant distinguishing factor. The other thing that I would say is that we have been aggressively working on this for quite a number of months and we are doing that prior to the time that we started to see the melt down in the financial sector and the defaults in the financial services sector and so that does provide us with some time to market advantages that are significant. We also have a very inclusive approach that we think is valuable not just to the sell side but to the buy side as well. And where the large buy-side participants in the credit defaults swaps market could participate and help reduce counter-party credit risks as between themselves and the dealer community in a way that I think our have not yet facilitated, we have a very strong reputation for neutrality and independence and establishing risk management policies and in making sure that the marks, if you will, as part of the valuation of exposures, are independent and objective. And we also offer I think the most flexible solution in that we are providing for firstly a migration facility for existing gross exposures in the CDS market, we are contemplating allowing access to clearing-only services, where market participants can continue to transact bilaterally in the over-the-counter market but submit those exposure and trades to the clearing house for a central counter-party guarantee. And then lastly and I think very uniquely, we are also offering an execution platform, both the central limit order book for highly standardized indexed products as well as an RFP transaction platform for single-name products that many not normally be deeply liquid and subject to a high turnover or transaction frequency that could also be centrally cleared and that might enhance the liquidity in the market and improve price transparency but also improve the quality of the marks that the clearing house can use in properly determining the value of the exposure. So I think we have a very, very strong advantage in all of those respects.

Your next question comes from Niamh Alexander - Keefe, Bruyette & Woods. Niamh Alexander - Keefe, Bruyette & Woods: The open interest declining, Rick you guided us earlier in the year to say that historically that may have been a good precursor to volume but it looks back now and it looks like open interest peaking last year was a bit of a precursor to volumes slowing. Is there anything you can point to or anything you see in detail of open interest, a kind of place maybe it’s flattening out, or it’s a specific type of customer that’s just pulled back with all the volatility or anything like that?

I think one of the big areas of the decline had been in couple of the options products. Obviously the Euro dollar options being the biggest one. But you have seen some decline in open interest and other interest rate products but yet in other products you have seen actually increases in open interest. So it’s a very mixed bag of what’s going on out there right now. And a lot of it has to do with how the underlying markets are trading and whether they’re functioning properly more so than what the future’s open interest is. So I do think you have to look at it on a product-by-product basis, I think you have to put it in context of what’s going on in the market. So it is difficult to use those numbers because if you look at that as the sole factor just because there’s so much else going on. If you look at them over a short period of time, they actually become negatively correlated. So we’re refining our forecasting on this as well but there’s lots going on.

Your next question comes from Mike Carrier – UBS.

Obviously the volume outlook is pretty challenging. It just feels like there’s more head winds, not just for you, just for the overall industry. So when you look at budgeting for next year, versus like the past seven years, how do you look at the expense base, particularly given all the ongoing investments, with the possibility of having significant volume decline? I guess what I’m just getting at is when you look at the expense base, ex the synergies, where could you pull back if we are in an environment where volumes are just going to be flat to down 10% or 20%?

It’s a good question. It’s certainly an area that we will be very focused on as we go through the budget process. We have been disciplined throughout our history on the expense side and we will continue to engender that. One of the things we will have to do is we will have to look to see what the cost benefit is of reducing certain expenses. You don’t want to cut expenses that lead to growth down the line. So it’s somewhat of a balancing act there. So it’s something we will look at through the budget process. Some of the areas which naturally move with volumes because volumes are tied to cash earnings, the bonus line would move, along with volumes and license fees are a variable expense so those move with volumes as well. We also have discretionary expenses that we would take a harder look at, probably in the marketing area or some of the expenses we use in prospecting. And then we would also look on the major capital spends. But I think right now all is very well and we will just be very careful in our budgeting.

Your next question comes from Robert Rutschow - Deutsche Bank Securities.

Following up on that question, can you tell us what your expectations are for next year in terms of volumes and what you are budgeting there?

No, we don’t give out volume guidance.

Your next question comes from Christopher Allen - Banc of America Securities.

Some of your customers have raised concerns that putting CDS positions on the clearing house would pose a risk to their capital. How do you answer that? And would it be necessary to raise additional capital to clear CDS contracts?

A couple of comments on that. First of all, there have only been a couple of people that have commented on that and they have done so in a kind of preliminary fashion, reacting just to people talking about what we are proposing to do. But I want to be careful to say that we have a risk committee which we will have a discussion with them about the risk modalities that we will use here for the credit defaults swaps market. We will also certainly have more substantive and detailed with our clearing member firms about the risk management protocols that will be used here. But suffice it to say that we have done a tremendous amount of work here. We have very specific protocols that we are going to be putting place that are unique to CDS. And so I think we will be able to satisfy and address those legitimate questions that people have once we have the opportunity to get into the specifics and the particulars of that. I think we have both Phupinder Gill and Kim Taylor on the phone in New York, both of whom run the clearing house and they may want to amplify on that.

I wanted to just add to what was said about the risk management protocols that are being applied to the credit product. One of the things that we looked at in considering whether it was appropriate to include these products in the existing financial safeguards package or whether it was more appropriate to establish a separate financial safeguards package was whether or not ultimately the risk profile that the financial safeguards package is exposed to would change significantly from the addition of the product. And what we found is that we were able to control for differences in the risk profiles that these products present with the specialized margining protocols that Craig mentioned and also some specialized suitability requirements for who would be allowed to participate in clearing these products. So we think that we have adapted for the differences in the risk profile accordingly and that the pool of the financial safeguards does not face a significantly different risk profile than it faced before. That’s the important thing.

Your next question comes from Michael Vinciquerra - BMO Capital Markets.

Craig, you talked about you are pretty enthusiastic about what’s going on with ClearPort right now. I noticed in the last couple of days you have introduced a number of new products on that platform. Can you talk about the outlook there? It seems like you think it is going to be one of the growth engines over the next couple of years.

We are really excited about ClearPort, certainly the more recent performance has been outstanding. We have also been, and I will ask Rick to comment because he’s been particularly active in getting out and talking to the customer base that is using ClearPort, as well as the dealer/broker community. I think there is a lot of enthusiasm for ClearPort and how it works. There is a lot of interest in expanding ClearPort beyond the current product set of primarily oil and gas swaps, a much broader range of product that people are interested in. We are seeing a significant increase in customer connectivity and registrations as well. One of the things that we are trying to do on an operational level as the consequence of integrating the two companies is try to reduce bottlenecks and constraints on bringing new product to market in a very timely fashion. So all of that is very positive for us from a growth perspective.

One of the things that we wanted to demonstrate to the market is we could get a number of those natural gas basis swaps out there, which we launched on Monday. And we looked to other products as well. I think NYMEX and COMEX had a number of products in the pipeline that we are moving forward to getting those into the market and all of these are what customers are asking us for. And then the other area that Craig mentioned was expanding the product category and the asset classes that we could put on to ClearPort because I think ClearPort has been a hugely successful product but in this environment we are getting lots of clients talking about putting more assets on there because of the credit crisis. People are really attuned to credit risks right now and I think there are products such as agricultural products and metals that we can continue to roll out and those are very important for what people are looking for. I think you saw just the other day that we’ve now done as much volume on ClearPort in the energies on one day as we did in Globex, which is something we’ve never seen before. So this is heightened in customers’ minds. I think one of the things that Craig mentioned was the number of new people registering. But it’s also the type of entities that are coming onto ClearPort, too, ones that a year ago you never thought would have need for a central counter-party clearing mechanism and now they’re there and very thankful that this is being offered.

Your next question comes from Howard Chen - Credit Suisse.

A follow-up on the customer break down. Of those 25 major hedge funds that comprise 10% of the volume, could you provide a general sense of order breadth, i.e. opening versus closing of positions and if that breadth is disproportionately skewed in one direction in the other. And I guess more broadly, with all the increased worries of counter-party risk, is there any particular reason we haven’t seen a major end user become an active clearing member of the CME and execute and clear their own volumes? Is this of any interest to you?

Just to clarify your question, are you asking whether there’s a difference in the open interest trend versus the volume trend for hedge funds?

Right. Of that 25 major hedge funds that you broke out 10% of volume. I was just trying to get a sense, is there any evidence that that’s a net closing out of position?

I’m interpreting your question as can we tell if people are liquidating to get out of the market. I think that’s very difficult for us to see because a lot of these positions are offsetting other exposures that they have so you don’t know if they are mitigating the risk that they have on or if they are exiting positions. That’s very difficult for us to see.

I would say that you have to remember, too, that a number of these larger hedge funds are more algorithmic proprietary trading operations and it doesn’t appear to us that there’s any trend like that, at least in terms of the significant volume contributors.

In this environment what you tend to see is people doing these shorter-term strategies where a lot of them are literally getting closed out before the end of the day, so again, it’s very difficult for us to aggregate that up and give you a general trend.

On the second point, I do think there are a number of entities that are inactive clearing member firms currently that are examining the opportunities for them to become full self-clearing, active-clearing members of the exchange.

Your next question comes from Mark Lane - William Blair & Company. Mark Lane - William Blair & Company: I understand that you have limited visibility into the types of customers that are trading, but beyond the bank proprietary trading group and the 25 large hedge funds, can you give any further insight or detail on the contribution from other users?

I think one thing to pay attention to in this quarter, to give you some general feeling is, non-member volume as a percentage went up. So whether that’s an asset manager or a pension plan, you’re seeing a bigger percentage of that customer base coming on to exchange. That helped drive the RPC.

I think I understand your question to be can we give sort of a quantitative range or break down, percentage contribution from other customer segments. That’s extremely for us to do. We have special membership categories and fee programs that pertain to hedge funds, electronic proprietary trading groups and banks and when you start to get into the areas of asset management firms or insurance companies or mutual funds or pension and retirement systems, we just don’t have membership categories or fee programs that allow us to really see that. And unfortunately we don’t have a lot of visibility because we’re generally trading through the clearing member firm. Mark Lane - William Blair & Company: Those were just those two categories where you have insight into.

I would say the bank proprietary trading, the hedge fund clearing, or corporate member and the inactive electronic proprietary trading group areas are the ones that we have the most visibility in. We, I think, shared with you today as much insight as we can on that. Mark Lane - William Blair & Company: On the CDS are you dedicated, is your solution dedicated to a buy-side model with a central order book and electronic front end or if the market doesn’t want that or you can’t get enough dealer support, would you potentially go in a different direction?

I think that that is a key area that we want people to understand is the flexibility of our offering which is that it does not require that you trade on the platform in order to clear through a CME clearing house. You can continue to transact bilaterally in the over-the-counter market and submit that transaction to the central counter-party clearing system. So I think that’s the most flexible of all worlds. If the demand is simply for clearing, then we I think are the best positioned clearing provider. If there is interest, or if overtime the market evolves to one that involves more centralized execution with some degree of price transparency, either in indexes or single-names, then I think we are in a strong position to provide that equally. But it’s not necessary, it’s not required.

Your next question comes from Donald Fandetti – Citigroup.

A question about the algos. It’s my understanding that they could contribute up to maybe 40% of volumes. How should we think about the risk of those entities? All of your customers have some type of risk. Can you talk a little about that and the concentration there?

The algo guys can be the proprietary groups, they can be part of a bank proprietary desk, they can be some of the hedge funds. We kind of lump all those together. A lot of that, they do have very tight risk exposures, and unlike some of the longer term strategies that losses can accumulate, a lot of these things are very short-term oriented and a lot of them turn these things over many, many times a day. So most of the exposure they have is literally in milliseconds, sometimes in seconds. So it’s usually a function of where the next tick is. I mean, if markets completely come unwound and there’s no bid or offer out there, that’s a problem. But you also have to understand, the markets they trade in tend to be the more liquid markets, because their type of trading, high-velocity strategies, do not work in markets where you have disjointed bid/ask spreads. So that’s why they tend to gravitate in some of the larger asset classes. In the most liquid products.

And just to confirm, your hedge fund percentage 10% for Q3, is it fair to say that’s carried through into October?

We don’t have that information yet.

Your next question comes from Jonathan Casteleyn - Wachovia Capital Markets.

There has been an acceleration in the fodder around the potential CFTC and SEC merger. Just wondering, is there risk to the existing set up of the exchange or would it just be on future products and ventures, in your estimation?

It is very difficult to speculate on those kinds of things. We’re in an environment right now where many, many things could be talked about in terms of financial services markets and regulatory proposals and regulatory reforms. I just think it’s incredibly difficult to speculate on that. At an appropriate time, when people are not dealing with the exigencies of the current situation, I am sure there will be a very thoughtful discussion in Washington and in Congress about how all this should work. And I think we have a strong and principled position on those issues that we have articulated for many years. And I think it’s very clear that the CFTC has done a very good job. This has been, objectively speaking, the best functioning part of the overall financial markets. We’ve had tremendous continued functioning of the market, deep liquidity, price transparency, no disruption, and safety and soundness. And the guarantee of the clearing house on every trade. So we’re standing in a good spot from that perspective.

Just so I understand, when you mention balance sheet reliefs in your CDS product, does that mean there is no new capitalization required in your clearing house, if you were to bolt on CDS? Is that basically the interpretation?

It doesn’t mean that there is no need for additional funds, because our pool always scales automatically with increased exposure to the clearing house. So as the margin on deposit grows with our regular product or with the credit product the pool size of the guaranteed fund would automatically grow. In addition, with respect to the credit products, Craig talked quite a bit about the different margining protocols associated with those products and to a large extent what that results in is kind of a higher per unit margin deposit or margin requirement for a unit of credit, notional, as opposed to a unit of other product. That will actually weight the pool over time more heavily toward contributions from those people holding credit-related exposures. What it does mean, though, is that you don’t need to start from scratch and you don’t need to reseed the pool, so if, let’s say, the pool needed to be $2.0 billion, for example, to cover the risk exposure of a book of business that included the credit products, our pool is already at $1.7 billion so there is a significant efficiency in adding, diversifying the default risk, basically, that is covered under that pool. We would only need to increase the contribution by $300.0 million, whereas a provider starting from scratch in a startup clearing house would need to start from zero and raise the $2.0 billion. So there is a significant advantage in a couple of ways. One is that the default profile of the clearing house is diversified and that is a better position for systemic risk protection than a default profile that is facing the clearing house that one-product, single-product oriented. It also, though, is a capital efficiency to the market participants who are participating in the clearing process because they get an efficiency from the capital that they have already put up to support the business.

Your next question comes from Daniel Harris - Goldman Sachs.

I was hoping you could spend a minute going through somewhat of a post mortem on FXMarketSpace. I’m thinking back to when you launched it, and what you’ve learned from the experience of trying to enter this OTC market, having it not work, what you could have done different and how that sort of shapes what you’re thinking about with regards to your CDS opportunity and that’s more I guess specifically focused on the trading side rather than the clearing side.

I think one of the things that became apparent early with FXMarketSpace is that many of the market participants were actually looking for a solution that would provide efficiencies in terms of net settlement through the CLS system and ultimately the FXMarketSpace management took a conservative view on that and we continued to facilitate transactions on the platform that were centrally cleared, but that were settled through CLS on a gross versus a net basis. And that would have been, I think, an innovation that had we been able to get to some kind of a net settlement, that might have made a difference. Apart from that, I think the other lesson is one that was obvious from the beginning but always difficult to overcome and that’s creating an entirely new kind of business and market model and processing model where you have business that’s being done in a particular way and when you begin to centrally clear a spot for an exchange transaction, that has significant implications for the bank community in terms of their own systems capabilities. And that proved to be difficult in an environment where the banks are challenged in terms of their legacy systems and their development resources. And while we would like to try to hang in forever and ever and ever, we just weren’t able to get to where we wanted to go in the time that we wanted to get there. In terms of operational preparedness.

Your final question comes from Edward Ditmire - Fox-Pitt Kelton.

Given what you’ve studied and the existing over-the-counter market and credit term swaps, do you think users would have to post more margin or collateral under the CMA solution or less than what the status quo is?

Can you repeat the question?

I’m assuming you have done extensive studies on the status quo over-the-counter market and credit default swaps. Can you tell us whether your system would require users to post more margin than they were posting in collateral under the status quo system? Or would it be lower amounts that they would have to post?

I think that on a participant-by-participant basis one of the problems that is facing the over-the-counter credit default swap market now is that collateral arrangements are kind of bespoke so there are different arrangements that apply to different counter parties, different arrangements that apply to different customers and so there’s not a kind of disciplined, standardized approach to collateral requirements. And I think there is also a lack of transparency on the part of the customers, the dealers have the ability to basically change the margin requirements or the collateral requirements kind of at will. So our approach to risk margining for these products is the same kind of conceptual approach that we have in all of our products, which is we are looking to do a risk-based portfolio-based approach to margining where we are looking to ensure that our margin covers what we consider to be the worst case loss the portfolio would suffer over the relevant time period that we would need to liquidate the position. So some of those elements are very different for credit products than they are for futures. I can answer your question kind of generally in that we have looked at our margin requirements with different market participants versus what they pay now and we have found in some cases they are slightly higher, and in some cases they are slightly lower. They’re in the range of reasonability and I think that each participant’s experience might be slightly different depending on the bespoke nature the deal that they had.

I will turn the call over to Craig Donohue for closing remarks.

Thank you very much for joining us today. We look forward to being with you next quarter.

This concludes today’s conference call.