CHANGING THE GAME.

After decades of doing business without a formal agreement, the CBOT wants to negotiate its first-ever contract with the Board of Trade Clearing Corp. (BOTCC) that limits whom the clearinghouse can do business with. Increasing competition in the industry is behind the move. The BOTCC wants to

Michael A Manning, director at both the CBOT and the BOTCC, says these entities sent a joint proposal to BrokerTec, and the BOTCC also sent a second proposal on its own. He says the exchange wants the clearing-house to be successful, yet the CBOT doesn't want to help direct competitors.

"It's kind of a catch-22. The CBOT would like to see the BOTCC be the North American clearing organization," Manning says. "Having said that, why would they, as the biggest and only customer of BOTCC, want to encourage them to be the clearing organization for a new entity that hasn't traded a single contract yet?"

While both sides were to hold initial meetings at an industry conference in Switzerland, resolving issues on the CBOT-Eurex alliance took priority.