Although the announcement that the CME is to launch a service to clear over-the-counter foreign exchange products was no surprise, the way the exchange made it was. Once, the launch of such an initiative would almost certainly have been accompanied by a loud fanfare and the wheeling out of the great and the good by the exchange. But it would seem that the CME has learnt some important lessons over the past few years; so rather than proclaiming the move with a big bang, it did so more with a bit of a whimper.
Despite the modesty, though, the CME is no doubt feeling some satisfaction that it has what appears to be first-mover advantage in what might prove to be one of the most important developments in the history of FX. Of course, similar things were written when the exchange launched its ill-fated and ultimately doomed FXMarketSpace joint venture with Thomson Reuters just over three-years ago (see FXMS - Space 2007: an FX market odyssey?, Euromoney June 2006).
That initiative made much of how it was bringing centralized clearing to the OTC FX market and that in doing so it would change the industry’s structure.