CME Group, a futures exchange operator based in the U.S., will close its money-losing derivatives exchange and clearing house in London by the end of the year.
The firm is shutting down CME Europe and CME Clearing Europe because customers prefer to access the company’s global products through its U.S. infrastructure, William Knottenbelt, a senior managing director for CME Group’s international business, said in a statement Wednesday. “Europe continues to be a critically important and expanding market for CME Group, with average volumes of more than 2.6 million contracts per day from European clients during 2016,” he said.
CME Europe and CME Clearing Europe were established after the 2008 financial crisis to help the company navigate new derivatives rules that were introduced globally. The Chicago-based company said it will work closely with regulators to ensure an orderly winding down of the businesses, according to the statement. A spokesman for the U.K.’s Financial Conduct Authority confirmed it would work with CME Group and declined further comment.
CME Europe had a post-tax loss of about £8.4 million ($10.5 million) in 2015, according to the company’s most recent earnings report filed with the Companies House, the U.K. company accounts depositary. That’s steeper than the £5.2 million loss after taxes that it posted in 2014.
CME Group employs 400 people in the U.K., according to a company spokeswoman, who expects “a very low percentage to be affected” by job cuts resulting from the shutting down of the London-based business operations.
“Though we have made the business decision to close these London-based entities, we will continue to maintain a significant operation in London to execute our global growth strategy, including serving our European client base, developing innovative products and services, and helping customers effectively manage their risk across every major asset class,” Knottenbelt said in the statement.
