Terrence A. Duffy

The Honorable Terrence A. "Terry" Duffy is an American business executive. He is Chairman and Chief Executive Officer of CME Group, the world's leading derivatives marketplace.

Terrence A. Duffy
Occupation
  • Chairman and CEO (2016 – present)
  • Executive Chairman and President (2012 – 2016)
  • Chairman (2002 – 2012)
  • Vice Chairman (1998 - 2002)
OrganizationCME Group

Duffy has built CME Group into a brand recognized around the globe and often serves as the voice of the global derivatives industry. In 2020, CME Group was named the world's fastest growing and most valuable exchange brand for the seventh consecutive year,[1] with a brand value of $2.1 billion.

A 40-year veteran of the futures industry, Duffy has served in the chairman and 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, including most notably when Chicago Mercantile Exchange acquired its cross-town rival Chicago Board of Trade, followed by acquisitions of New York Mercantile Exchange and later NEX Group.

Duffy was appointed by President Bush and confirmed by the U.S. Senate in 2003 as a member of the Federal Retirement Thrift Investment Board (FRTIB), a position he held until 2013. The FRTIB administers the Thrift Savings Plan, a tax-deferred defined contribution (retirement savings) plan for federal employees.

Duffy is 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. He currently serves as Co-Chair of the Mayo Clinic Greater Chicago Leadership Council and also is Vice Chairman of the CME Group Foundation. He attended the University of Wisconsin–Whitewater, and received a Doctor of Public Service, honoris causa, from Saint Xavier University in 2019 and a Doctor of Humane Letters from DePaul University in 2007.[2][3]

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.”[4]

Duffy has also written about the impact of financial services on students coming into the industry. In 2013, he published an influential Op-Ed 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.”[5]

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.[6] In July 2015, he urged a Congressional Committee to repeal the United States crude oil export ban.[7] 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."[8]

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 U.S., but throughout the world, so I try to make sure I'm part of the process as much as possible."[9]

Duffy also has advocated for attracting the best and brightest graduates to the financial services industry, including recruiting future economists and traders as early as middle school. He has written op-eds on the topic in The Wall Street Journal[10] and Business Insider[11].

Career

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 Chairman and CEO of CME Group.[12] He also founded TDA Trading, Inc. and served as President of TDA Trading from 1981 to 2002.

Under Duffy's leadership, CME Group's average daily volume has risen from 2.2 million contracts per day in 2002 to 19.2 million in 2019. Revenues grew from $453.2 million in 2002 to more than $4.9 billion in 2019.[13] In 2019, CME Group's non-U.S. average daily volume the company recorded approximately 25 percent of volume and 30 percent of clearing and transaction fee revenues from outside the United States.

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."[14]

Mergers & Acquisitions

Duffy played an instrumental role in merging the Chicago Board of Trade and the Chicago Mercantile Exchange to become CME Group - the first large-scale merger in the futures industry which was completed in 2007. 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."[14] 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. In 2008, under Duffy's leadership, CME Group also acquired the New York Mercantile Exchange (NYMEX), which added energy and metals products to the company's global benchmark products.

In 2018, Duffy led CME Group’s acquisition of London-based NEX Group – the biggest overseas deal in CME Group history. The deal brought together two trading industry trailblazers to create a leading, client-centric, global markets company that delivers better ways to trade and manage risk across futures, cash and OTC products. The transaction significantly expanded CME Group's global footprint and also added several trading assets to its portfolio: BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets; EBS, a leading provider of electronic trading platforms and technology services in foreign exchange markets; and optimization services businesses.[15]

Awards and Honors

CME Group has received numerous industry awards under Duffy's leadership. Most recently, the company was named Exchange of the Year and Clearing House of the Year by Global Capital and one of Computerworld's 2020 Best Places to Work in IT list. In 2019, it was named to the Forbes list of America's Best Mid-Size Employers, [[Computerworld's and recognized as Exchange of the Year, Clearing House of the Year and Exchange Innovation of the Year by Risk Magazine. Risk Awards. [16] In 2019, Duffy signed the CEO Pledge for Diversity and Inclusion.

In 2018, FOW Magazine named Duffy CEO of the year.[17]. 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.

Notable Press Coverage

Duffy is frequently featured in global business publications and television networks. Recent profiles include L'Agefi [18], Business Insider[19], The Wall Street Journal[20] and The Financial Times[21]

Other Achievements

In July 2018, Duffy represented CME Group as Co-Chair of the 50th Anniversary of Special Olympics, a three-day celebration that took place at the organization's birthplace - Chicago's Soldier Field.

A longtime supporter of women’s sports, Duffy was the driving force behind the LPGA’s CME Group Titleholders Tournament in 2011. In 2016, the tournament evolved into the LPGA’s season-ending championship event, the CME Group Tour Championship which offers the largest first-place prize in all of women’s golf – $1.5 million.

"I am extremely proud of our long-standing relationship with the LPGA and its players,” said Duffy. “The evolution of our partnership with the LPGA has elevated the sport of women’s golf to new levels.”

The CME Group Tour Championship has a strong charity tie-in. From 2014-2018, through its CME Group Cares Weekends, CME Group contributed $1000 for every eagle made during weekend play to the Wounded Warrior Project, which serves U.S. veterans, and Bright Pink, women’s cancer awareness organization. During that time, more than $1.5 million was raised and split between these organizations. In 2019, program transitioned to the CME Group Cares Challenge - Score 1 for St. Jude. Now, for each hole-in-one made on the LPGA Tour, CME Group donates $20,0000 (with a minimum guaranteed annual donation of $500,000) to St. Jude Children’s Research Hospital, a leading pediatric treatment and research facility focused on children’s catastrophic diseases. In 2019, CME Group donated $640,000 to St. Jude’s.[22]

Recognizing Terry Duffy’s tremendous impact in elevating women’s golf, the LPGA honored him with its prestigious Commissioner's Award in 2015.

Early life

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.[23] 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.[14] 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.[8] 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.[24] “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.[25]

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.

Education

Duffy attended the University of Wisconsin-Whitewater. He received a Doctor of Public Service, honoris causa, from Saint Xavier University in 2019 and a Doctor of Humane Letters from DePaul University in 2007.

References
  1. "CME is World's Most Valuable Exchange Brand for Sixth Year Running".
  2. "SXU Announces 2019 Commencement Ceremony Speakers".
  3. "Skinner, Kotlowitz And Duffy Among DePaul's 2007 Commencement Speakers".
  4. "The head of the biggest exchange group in the world on Trump, China, and handling $1 quadrillion in trading".
  5. "Wall Street is Losing The Best and Brightest".
  6. "Tabb Forum".
  7. "CME Group Media Room". cmegroup.mediaroom.com. Retrieved 2015-09-21.
  8. Weitzman, Hal. "From bar to floor to boardroom". Financial Times. ISSN 0307-1766. Retrieved 2015-09-20.
  9. Mackenzie, Michael; Braithwaite, Tom (2013-09-11). "In his own words: Terry Duffy". Financial Times. ISSN 0307-1766. Retrieved 2015-09-21.
  10. "Wall Street is Losing The Best and Brightest". Wall Street Journal.
  11. "CME's Duffy on Wall Street's Reputation". Business Insider.
  12. "Duffy Named Chairman & CEO". CME Group.
  13. "2019 Financial Results". CME Group.
  14. Lambert, Emily. "Up From the Pits". Retrieved 2015-09-20.
  15. "CME Group Completes Acquisition of NEX Creating a Leading Global Markets Company". CME Group.
  16. "CME Group Awards".
  17. "FOW International Award Winners Unveiled". Futures & Options World.
  18. {{Cite news|url=https://www.assetnews.com/people/we-want-grow-our-presence-europe%7Cnewspaper=L'Agefi%7Ctitle="We Want to Grow Our Presence in Europe"|last=|first=|date=|work=|access-date=|via=
  19. "Terry Duffy CEO Interview". Business Insider.
  20. "CME Chairman Rebuffs Obama on Speculators". The Wall Street Journal.
  21. "From bar to floor to boardroom". Financial Times.
  22. "Big Upgrades to the LPGA's Race to the CME Globe in 2019". LPGA.com.
  23. "CME's Terry Duffy on The Trade That Changed His Life".
  24. "The futures of capitalism". The Economist. ISSN 0013-0613. Retrieved 2015-09-20.
  25. "Terry Duffy on the Trade That Changed His Life".
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