CME Group, a US-based financial derivatives exchange, has proposed to regulators its plan to offer derivatives trading directly to retail clients.

According to The Wall Street Journal report on Saturday, CME Group filed documents to register as a so-called futures commission trader (FCM).

Retail investors often trade derivatives through third party brokers such as TDAmeritrade. If regulators approve CME’s plans, individual consumers will be able to trade derivatives directly through CME instead of through a brokerage.

Market participants spoke about the new development. “This is remarkable and not surprising. CME Group has wanted direct customer relationships for as long as I can remember,” said CoinFund President Christopher Perkins, commenting on the Journal report via LinkedIn social media.

Joseph Guinan, CEO of FCM Advantage Futures, also stated whether CME’s request is approved. Their entry into the futures brokerage space would not only be a game changer, but would also be a huge concern for all FCMs (Futures Commission Merchants) should CME set lower fees than such brokers.

A CME spokesperson also commented that the company’s commitment to the FCM model and significant risk management remains an unwavering benefit to all industry participants.

CME’s move is a restructuring plan that follows a similar service offering proposal launched by FTX.US in April. CME’s plan is similar to FTX.US’s proposal to allow consumers to post margins and trade crypto derivatives directly on its platform.

In May, the Commodity Futures Trading Commission (CFTC) sought public comment on a request by FTX.US to amend its derivatives clearing organization (DCO) license. to offer a new type of crypto margin trading to US retail clients.

CME Group and ICE opposed FTX.US’s proposal to offer centralized margin product clearing directly to retail clients, which was championed by the crypto industry and the FIA ​​(Futures Industry Association), a global industry organization for futures, options and listed derivatives markets – at a congressional hearing. The FTX US proposal was deemed deficient and represents a significant risk to market stability and market participants.

At the May hearing before the House Farm Committee, US lawmakers were skeptical of FTX’s proposal for an automated collateral system to be used for cryptocurrencies and other digital assets in futures markets.

Cryptocurrency derivatives trading on centralized exchanges surged to $3.12 trillion in July, a 13% monthly increase, as crypto prices maintain efforts to recover from the recent market slump. The crypto market tumbled in May and June as concerns about Federal Reserve interest rate hikes and high inflation prompted investors to dump risky assets.

As of July, the derivatives market accounted for 69% of total crypto volume, up from 66% in June, and helped drive overall crypto volumes across exchanges to $4.51 trillion in July. The rise in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further upside in the crypto rally.

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