Chicago Exchanges: Working against the grain
When the Cantor Financial Futures Exchange (CFFE) opened last September, it was the result of nearly two years of discussions between the main protagonists.."
"It was back in 1996 that we realized that the future for trading lay in screen-based technology rather than open outcry," says Joe O'Neill, a director of the Cotton Exchange as well as of the new joint venture with Cantor Fitzgerald. "Cantor was thinking along the same lines. They had the technology, we had the forum, so we decided to join forces."
Cantor's reason for getting involved might not be as clear-cut, however, according to local traders at the Chicago exchanges and several of the futures commission merchants (FCMs) - the banks. Two years ago the Chicago Board of Trade had announced its intention to become a broker-dealer in the cash treasuries market; Cantor, aggrieved at the possibility of competition, decided it would compete on the CBOT's home turf.
Initial prospects looked grim: leading the campaign against the new venture was Thomas Donovan, president of the CBOT and a former chief of staff to erstwhile Chicago mayor Richard Daley (of the 1960s and 1970s, not the present incumbent, his son).