Terrence A. Duffy
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|Terrence A. Duffy|
Chairman and CEO 2016 – present
Executive Chairman and President 2012 – 2016
Chairman 2002 – 2012Vice Chairman 1998 - 2002
The Honorable Terrence A. "Terry" Duffy is a U.S.-based business executive. He is Chairman and Chief Executive Officer of CME Group, the world’s leading derivatives marketplace. In 2014, CNBC named Duffy on its list Top 200: Leaders, icons and rebels, recognizing the world’s top business leaders of the last 25 years. In 2014 and 2015, Chicago Magazine named Duffy on its 100 most powerful people list.
Duffy has built CME Group into a brand recognized around the globe and often serves as the voice of the global derivatives industry. In 2016, CME Group was named the world’s fastest growing and most valuable exchange brand, with a brand value of $1.7 billion, beating out the New York Stock Exchange and the Hong Kong Exchange.
He has served in the chief executive role since November 2016. He joined the CME board in 1995 and has served as chairman since 2002 and as vice chairman from 1998-2002. During his tenure, he led CME Group to become the world’s first exchange to demutualize and go public. He also led the company’s mergers and acquisitions, most notably when Chicago Mercantile Exchange acquired its cross-town rival Chicago Board of Trade and later the New York Mercantile Exchange. He helped navigate through the financial crisis of 2008 and was instrumental in shaping the historic Dodd-Frank legislation.
Duffy is a Presidential Appointee of the Federal Thrift Investment Board. The FRTIB administers the Thrift Savings Plan, a tax-deferred defined contribution (retirement savings) plan for federal employees. He is Vice Chairman of the CME Group Foundation, whose mission is to enhance economic opportunity, health and education, especially for disadvantaged youth. He serves as co-chair of the Mayo Clinic Greater Chicago Leadership Council and he is also a member of the Economic Club of Chicago, the Executives' Club of Chicago and the President's Circle of the Chicago Council on Global Affairs.
From the time he joined the exchange in 1981 until he assumed the chairman role in 2002, Duffy was president of his own firm, TDA Trading, Inc.
The Voice of An Industry
Duffy often serves as the voice for the derivatives industry, focusing on the relevance of futures to the global economy. In a 2017 interview with Business Insider, Duffy discussed the importance of the markets to everyday life. “Somehow, some way, those markets are affecting you. Whether you're taking a mortgage out, whatever you're doing in your life, there is an effect on you as far as finance goes.”
Duffy has also written about the impact of financial services on students coming into the industry. In 2013, he published an influential oped in the Wall Street Journal titled “Wall Street is Losing the Best and Brightest” about how more college graduates, particularly from elite universities, were choosing jobs in technology over finance following the financial crisis. Duffy wrote that finance serves a vital economic function, and the industry must do a better job of attracting high achievers. “Those of us who work in finance should try to show students that the financial-services industry offers meaningful work, with tangible benefits for society, in addition to the possibility of a good career.”
Advocacy in Washington
Duffy has been the lead advocate for CME Group in legislative and regulatory matters in Washington,D.C., and one of the key voices for the financial industry. He has regularly testified before Congressional Committees and Subcommittees on key issues facing the derivatives industry, including Dodd-Frank legislation, high-frequency trading, and the MF Global collapse. In July 2015, he urged a Congressional Committee to repeal the United States crude oil export ban. He is also noted for the relationships he has formed with several key political leaders.
In 2011, the Financial Times wrote of Duffy’s involvement in Washington, “It is a forum that plays to Mr Duffy’s strengths… he feels a duty to participate in politics rather than complain from afar."
His visits to Washington are frequent, even when not testifying. In 2013, he told the Financial Times "In Washington when Congress is in session, I'm there every other week at least, sometimes every week. I think it is very important. Washington plays a pivotal role not only in the US, but throughout the world, so I try to make sure I'm part of the process as much as possible."
A member of CME since 1981 and a member of the board since 1995, Duffy was vice chairman of the board of CME Holdings Inc. from its formation in 2001, and of the CME Board from 1998 to April 2002. As the company's vice chairman, he served on the executive, compensation, nominating, strategic planning and regulatory oversight committees. He served as Chairman of the board since 2002. In November 2016, Duffy was named CEO of CME Group following the retirement of former CEO Phupinder Gill.
Under Duffy’s leadership, CME Group’s average daily volume has risen from 2.2 million in 2002 to 15.6 million in 2016. Revenues grew from $453.2 million in 2002 to more than $3.3 billion in 2015.
Duffy also ushered in the era of electronic trading at CME Group. An early advocate, he lobbied traders to adopt an electronic Eurodollar contract in the early 2000s, an unpopular view at the time. Duffy told Forbes, "I can't regret what I did. If you just tried to lead by consensus, you'll never be successful."
CME Group’s global footprint has also expanded during Duffy’s tenure as executive chairman. The domestic mergers and acquisitions, such as that with CBOT, NYMEX and the Kansas City Board of Trade, have coincided with the launch of the company’s European exchange, CME Europe, and several partnerships with global exchanges. These include Mexico’s MexDer, the Dubai Mercantile Exchange, and Bursa Malaysia.
Duffy played an instrumental role in merging the Chicago Board of Trade and the Chicago Mercantile Exchange to become CME Group in October 2006. As Forbes recounts in a 2008 article covering the merger with Duffy gracing the cover, "As a single exchange, Duffy figured it could cut millions of dollars in overhead costs, offer every product class in a single electronic system and be large enough to expand into over-the-counter derivatives trading." Forbes continues, “In 2005, a few months before the Board of Trade went public, Duffy made an unsolicited offer to buy the whole shebang.” During the merger negotiations, Duffy hosted leaders from both exchanges at his home, where it was decided he would be chairman of the new company, and led efforts to fend off a competing offer from Intercontinental Exchange. The deal was announced in October 2006, and finalized in July 2007.
MF Global Collapse
Duffy guided CME Group through one of the most difficult periods in the history of the futures industry following the collapse of MF Global in 2011. In the weeks following the MF Global bankruptcy on October 31, 2011, CME Group provided a $550 million guarantee to the SIPC trustee in charge of the bankruptcy to accelerate the return of funds to MF Global clients. Duffy testified numerous times before congress in the months following the bankruptcy. He laid out a full timeline of events in which it was discovered that MF Global had a shortfall in segregated customer funds, and subsequently lobbied congress for changes to the bankruptcy code and other rule changes that could help prevent another similar collapse.
Awards and Honors
CME Group has received numerous industry awards under Duffy’s leadership, including Risk Magazine Exchange of the Year in 2016, Best Futures Exchange from Markets Media in 2013,2014 and 2016; Best Overall Exchange by CTA Intelligence in 2016; Global Capital’s award for Exchange and Clearinghouse of the Year in 2014 and 2015, and Clearinghouse of the Year in 2016; FOW’s award for Exchange of the Year – U.S. and Canada in 2014 and 2015, and International Exchange of the Year for Asia in 2013, 2014 and 2015; and the Derivatives Intelligence award for Exchange of the Year in 2013.
In September 2008, Duffy was honored with the Illinois Institute of Technology Stuart School of Business's first-ever Illinois Executive of the Year Award.
Duffy grew up on Chicago’s southwest side in the Mount Greenwood neighborhood, and graduated from Leo High School. The neighborhood was home to many Chicago police and firefighters, which Duffy thought would be his career path. “I didn't think there were other jobs out there,” he has said. His path to the futures industry began when he was a college student and part-time bartender in Wisconsin. He worked at a lakeside tavern called "Chuck's" that was frequented by CBOT and CME traders with summer homes around the Lake Geneva area. Vincent Schreiber, a successful Chicago trader, noticed his aptitude for math and ability to remember every customer’s name and drink, and suggested he come to Chicago Mercantile Exchange. In 1984, Duffy bought a CME membership with the help of a $50,000 loan from his parents secured by a mortgage they took out on their home. Shortly after he bought his membership and while working as a broker, he incurred a loss of $150,000 because of a misheard order. “This was my family home. My brother and sisters were still living there. It was $150,000, but it may as well have been a million or $2 million,” Duffy told Crain’s in 2013.
Schreiber, who became Duffy’s mentor, helped Duffy pay back the debt by offering his guarantee to the clearing firm, according to Crain’s. Duffy continued trading and worked several jobs, including bartending and as a shoe salesman, to pay back the debt over the next three years.
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- Weitzman, Hal. "From bar to floor to boardroom". Financial Times. ISSN 0307-1766. Retrieved 2015-09-20.
- Mackenzie, Michael; Braithwaite, Tom (2013-09-11). "In his own words: Terry Duffy". Financial Times. ISSN 0307-1766. Retrieved 2015-09-21.
- "CME Group CEO Phupinder Gill Announces Retirement".
- "CME Group Inc. Reports Strong Fourth-Quarter 2015 and Full-Year 2015 Financial Results".
- Lambert, Emily. "Up From the Pits". Retrieved 2015-09-20.
- "CME Group Increases Guarantee to $550M to Accelerate Return of 75 Percent of MF Global Inc. Segregated Funds to All Customers".
- "Terry Duffy Written Testimony Before the House Committee on Financial Services, Dec. 15, 2011." (PDF).
- "CME Group Named Exchange of the Year in 2016".
- "CME Group Awards".
- "CME's Terry Duffy on The Trade That Changed His Life".
- "The futures of capitalism". The Economist. ISSN 0013-0613. Retrieved 2015-09-20.
- "Terry Duffy on the Trade That Changed His Life".