Terrence A. Duffy

Terrence A. "Terry" Duffy is a U.S.-based business executive. He is the executive chairman and president of CME Group, the world’s leading derivatives marketplace. He has served as executive chairman since 2006, and assumed the additional role of president in 2012. 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.

In 2014, CNBC named Duffy to its list “Top 200: Leaders, icons and rebels,” recognizing the world’s top business leaders of the last 25 years.^[1] In 2014 and 2015, Chicago Magazine named Duffy to its “100 most powerful people” list.^[2][3] Hillary Clinton also referred to Duffy’s leadership in her first economic policy speech of her candidacy for the 2016 presidential race.^[4]

Duffy is a Presidential Appointee of the Federal Thrift Investment Board. 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.

Early life

Duffy grew up on Chicago’s southwest side, and graduated from Leo High School. 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.^[5] 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.^[6] 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.^[7]

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.

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.

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.”^[8] 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.

Under Duffy’s leadership, CME Group’s average daily volume has risen from 2.2 million in 2002 to 16.3 million^[9] in August 2015. Revenues grew from $453.2 million in 2002^[10] to more than $3.1 billion in 2014.^[11]

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.”^[12]

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 Brazil’s BM&FBOVESPA, Mexico’s MexDer, the Dubai Mercantile Exchange, and Bursa Malaysia.

CME Group has received numerous industry awards under Duffy’s leadership, including Best Futures Exchange from Markets Media in 2013 and 2014;^[13] Global Capital’s award for Exchange and Clearinghouse of the Year in 2014;^[14] FOW’s award for Exchange of the Year – U.S. and Canada in 2014,^[15] and International Exchange of the Year for Asia in 2013 and 2014;^[16] and the Derivatives Intelligence award for Exchange of the Year in 2013.^[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.

In November 2008, Duffy was an honorary committee member of the FIA Futures Cares Charity Dinner where over $300K was raised in support of the Greater Chicago Food Depository.

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.^[18][19][20] In July 2015, he urged a Congressional Committee to repeal the United States crude oil export ban.^[21] He is also noted for the relationships he has formed with several key political leaders.

In 2011, Duffy told the Financial Times, “I have friends on both sides of the aisle. I’m not an extremist, and I think I’m the normal person.”^[22]

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.”^[23]

In July 2007, just days after the CME-CBOT merger was completed, Duffy issued a press release endorsing senator and Democratic presidential candidate Hillary Clinton for the 2008 election.^[24] Duffy, a registered Republican and key Republican fund raiser, intended to remain a registered Republican, the press release said.

Education

Duffy attended the University of Wisconsin-Whitewater. In 2007, he received a Doctor of Humane Letters from DePaul University.

References