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CBOT, COMEX AGREE TO CONSOLIDATE

 CHICAGO, Jan. 25 /PRNewswire/ -- The board of directors of the Chicago Board of Trade (CBOT) and the board of governors of the Commodity Exchange, Inc. (COMEX), today announced that they have both agreed on a letter of intent to consolidate the two exchanges. The CBOT is the world's largest futures exchange and the COMEX is the largest metals exchange in the world.
 With this affiliation, all equity interest and voting rights in COMEX would become vested in the CBOT, which would become the sole voting and equity owner. The COMEX would remain a separate subsidiary corporation and a separate exchange without any transfer of COMEX's contract market designations. Upon execution of a final agreement, this transaction would be subject to approval by the respective exchange memberships. In addition, any rule changes necessary to implement the transaction are subject to approval by the Commodity Futures Trading Commission.
 The creation of a trust, mutual trading privileges, and savings in operational costs are the key elements of this transaction. No final dollar figures have been attached to these elements.
 In making the announcement, CBOT Chairman Patrick H. Arbor said, "I always have believed that U.S. futures exchanges need to be dynamic, aggressive and responsive to rapidly changing market conditions. To preserve our open outcry marketplace from growing competition by foreign exchanges and over-the-counter markets, we must continue to demonstrate the superiority, innovative capabilities and flexibility of our markets. That is why the Chicago Board of Trade initiated and aggressively pursued this affiliation we are announcing today."
 Donna Redel, the chairman of COMEX, said, "This is a major step for both exchanges. The operational efficiencies and increased financial strength which will result from the affiliation, together with the leadership position of both exchanges in the markets in which they compete, should make both of us even more significant factors than we already are."
 Arbor emphasized, "The competitive strength of the CBOT would be enhanced through this consolidation with COMEX. While there are many details yet to be finalized before we have an agreement, I believe this consolidation will prove advantageous to both exchanges.
 "Having the COMEX as a satellite exchange in New York would establish the Chicago Board of Trade's presence in a city many recognize as the financial capital of the world. The long-term benefit of our affiliation could help finance one of our strategic objectives, which is the development of a new trading facility, so that we can continue to grow and create additional trading opportunities for our members." Arbor added that the financial strength of the CBOT can provide COMEX with security to enhance its global market position.
 Arbor mentioned other benefits, including the fact that the Eastern time zone location would allow some overlap with European business hours through the early morning COMEX session, strengthening U.S. futures markets against foreign competition.
 Economies of consolidation would benefit the CBOT in terms of increased trading opportunities for members. The CBOT would gain a marketing advantage by being able to co-market CBOT/COMEX products. Not only would the preeminence of the Board of Trade Clearing Corporation be reinforced, but the clearing costs of futures commission merchants who presently have dual clearing status would be reduced.
 On the issue of governance, Arbor said, "COMEX members will continue to do what they do best, which is trade their contracts, but the Chicago Board of Trade will be the governing entity." The CBOT would elect a new COMEX board which would consist of the CBOT board of directors plus at least four COMEX floor access membership holders who would be members of the new COMEX governors committee. The chairman of that committee would include three New York-based CBOT members, two of whom would be sitting CBOT directors. This committee would be responsible for the operation of COMEX; its actions would be subject to the approval of the new COMEX board.
 Arbor concluded, "I want to thank CBOT Director Richard Sandor, who initially came to me with this vision, and through his help, this idea is close to becoming a reality. I also want to commend COMEX Chairman Donna Redel and her team of advisers for their leadership throughout our discussions. In all of our telephone calls and meetings over the last two weeks, Chairman Redel has worked with us to make sure the future of COMEX remains in New York and remains strong. She agrees with me that through the affiliation with the world's largest futures exchange, she will accomplish just that for her membership."
 In 1992, COMEX traded 12,673,179 futures and options contracts. The Chicago Board of Trade traded 150,030,460, its second most successful year ever.
 -0- 1/25/93
 /CONTACT: David P. Prosperi of CBOT, 312-435-3620; or Alan Hansen of COMEX, 212-938-2935/


CO: Chicago Board of Trade; Commodity Exchange, Inc. ST: Illinois IN: FIN SU: TNM

GK -- NY077 -- 8617 01/25/93 14:49 EST
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Date:Jan 25, 1993
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