CME Group has transferred the CEO of one of its subsidiary companies, credit derivatives data provider Credit Market Analysis (CMA), to its own executive management team. Laurent Paulhac has been appointed as managing director of OTC products and services for CME Group and will be responsible for leading the development, execution and management of CME Group’s global OTC business strategy.
Paulhac will be based in New York and report to Rick Redding, managing director of products and services. The appointment is all part of the market operator’s bid to up its stakes in the OTC sector with the expansion of its CME ClearPort offering to cover more products.
Craig Donohue, CME Group CEO, explains: “CME ClearPort has grown into a US$220 million business over the past seven years, and we are committed to helping market participants around the world to mitigate their counterparty risk and access neutral valuations for OTC products across multiple asset classes. With more than 700 products currently available for clearing in energy, metals and agricultural commodities, average daily volumes of 500,000 contracts per day and more than 10,000 registered users globally, we look forward to developing CME ClearPort to serve credit, equities, foreign exchange and interest rate markets as well.”
CME hopes that Paulhac’s experience in credit and interest rate products will be an asset to this endeavour. During his four years at the helm of CMA, which was acquired by CME in March 2008, Paulhac has been focused on improving the data vendor’s credit market pricing data and intraday services offering.
The vendor’s largest direct competitor in the market is Markit and Paulhac has been actively positioning CMA as the buy side focused alternative to the data offered by Markit. He has long claimed that CMA provides a completely unique, buy side consensus-based model for credit default swap (CDS) pricing, as opposed to a dealer-based model used by Markit.
Due to his level of public exposure in championing the brand, the loss of Paulhac may impact the market perception of CMA in the short term. However, in the interim before a replacement is selected, Paulhac will be forced to continue as head of the vendor during a transition period. It should be interesting to see who is selected as his successor.
Prior to joining CMA, Paulhac provided management consulting services for venture capital groups and technology companies looking to expand their businesses in financial services. In 1999, he founded Prescient Markets, an electronic execution business focused on money market instruments in the US, servicing over 400 leading institutions. In 2002, Prescient Markets was acquired by SunGard Data Systems, and Paulhac served as president of SunGard’s STN Money Markets division until 2004. Paulhac also has served as a principal of Financial Sciences Corporation, a software company dedicated to providing treasury management systems to global banks and corporations.