Terrence A. Duffy

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Terrence A. Duffy
Occupation	Chairman and CEO (2016–present) Executive chairman and president (2012–2016) Chairman (2002–2012) Vice Chairman (1998-2002)
Organization	CME Group

Terrence A. "Terry" Duffy is currently chairman and chief executive officer of CME Group, the world's largest derivatives marketplace by traded dollar volume. 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 to 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.

Career[]

Path to the Chicago Mercantile Exchange[]

Terrence Duffy's path to the futures industry began when he was a college student and part-time bartender in Wisconsin. Duffy worked at a lakeside tavern called "Chuck's" that was frequented by CBOT and CME traders with summer homes around the Lake Geneva area.^[2] 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.^[3] 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.^[4] “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.^[5]

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.

CME Group (CME)[]

Duffy founded TDA Trading, Inc. and served as President of TDA Trading from 1981 to 2002.

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.^[6]

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.^[7] 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 oversaw a transition to 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."^[2]

Mergers and 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."^[2] 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 transaction also added several trading assets to its portfolio: BrokerTec, a provider of electronic trading platforms and technology services in fixed income markets; EBS, a provider of electronic trading platforms and technology services in foreign exchange markets; and optimization services businesses.^[8]

Testimony and lobbying[]

Duffy 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.^[9] In July 2015, he urged a Congressional Committee to repeal the United States crude oil export ban.^[10] 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."^[3]

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."^[11]

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.^[12]

Education[]

Duffy attended the University of Wisconsin-Whitewater but did not graduate in favour of pursuing a career.

Writings and interviews[]

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.”^[13]

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.”^[14]

Duffy is frequently featured in global business publications and television networks to include ,^[15] Business Insider,^[16] The Wall Street Journal^[17] and The Financial Times.^[18]

Awards and honors[]

Duffy has given commencement speeches and thus has been awarded an honorary Doctorate of Public Service from Saint Xavier University in 2019 and an honorary doctorate Humane Letters from DePaul University in 2007.^[19][20]

In 2018, FOW Magazine named Duffy CEO of the year.^[21] 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.

References[]

External links[]

• Appearances on C-SPAN