We are ready and able to compete with anybody. And competition is something that has made CME what it is today. But the benefits that we continue to work on, you’ve heard me say this for years that we are going to continue to look for capital efficiencies in each and every one of our asset classes. We are delivering on every one of those asset classes to deliver capital efficiencies. That does not go lost on the participants in a capital-intensive world. So when you’re talking about new offerings with LSE and what they could potentially offer versus what we have, we think we have a massive compelling offering for our clients that saves them additional funds. So I like our position, and I think we are in a position of strength. Again, I think a lot of people, Alex, as you know very well, when the LIBOR was going away and everybody was going to convert from Eurodollars us to SOFR that people thought it was a jump ball.
And we felt we were in a very strong position to transition 100% of that business into CME SOFR products, which we did because of efficiencies to everything we have to offer. And those go from the back office to my sales team right across the entire organization that creates those benefits. So I like our position. Again, I think you said it at the beginning of your question. We’ve seen this movie before. I don’t want to quote you wrong, but I think that’s what you said. And we will continue to take every party that wants to compete with us very seriously. But at the same breath, we think we have a very strong, powerful, compelling offering for our clients. Tim, do you want to add to that?
Tim McCourt: Sure. Thanks, Terry, and thanks, Alex. I think just to add a little more color on that picture is when we look at the gravity of the complex at CME, Terry’s point is unmatched. And the one thing I want to further remind the marketplace about is you can unlock a tremendous amount of capital savings and efficiencies at CME today, and the marketplace is doing it. In addition to the $7.5 billion-plus margin savings from our portfolio marketing portfolio, let’s look at some of the numbers with respect to the open interest. With record average daily open interest in our treasury complex of just under 19 million contracts for the third quarter, a record average daily open interest in our SOFR complex of about 11 million contracts and with a record large open interest holder population of 3,175 participants, that is an enormous amount of gravity that although LCH may be the leader with respect to their interest rate swap clearing offering, I like the gravity and the size of the complex that’s going to be unmatched about the capital efficiency can tap into with CME, the sheer function of our position on the future side, which we expect to only be more and more important to the marketplace as we head into 2024.
Terrence Duffy: Hopefully, that gives you a little color on how we’re thinking about it, Alex. But again, we take everything seriously and — but I think, again, our offering, as Tim has said and I said, is very compelling.
Alex Blostein: Yes. Very helpful, guys. Thank you.
Terrence Duffy: Thanks, Alex.
Operator: Thank you. Our next question is from the line of Michael Cyprys with Morgan Stanley. Please go ahead. Your line is open.
Michael Cyprys: Great. Thank you. Good morning. Two-part question. Just following up on the capital efficiencies beyond the cross margining with DTCC. Just curious what other steps you might be able to take as you look out the next three years to further enhance that. And then the other part of the question is just around the regulators proposing new capital rules for banks that can make some bespoke off-exchange derivatives just more capital-intensive. Just curious of your take on that, where you see the biggest opportunity to bring derivatives from OTC to the exchange-traded marketplace.
Terrence Duffy: Michael, both really good questions. The latter one is we’ve dealt with in 2017. I’m assuming you’re referring to the Basel III what’s being proposed on the second part of your question.
Michael Cyprys: Yes.
Terrence Duffy: Okay. So on the first part, on the capital efficiencies, I’m going to turn it over again to Suzanne Sprague, and she can touch on both, but I’ll give you my thought process on the Basel III as well.
Suzanne Sprague: Yes. Thanks, Terry. So we do look forward to extending the enhanced cross margin program to the client level. We have had quite a bit of conversations with ourselves and the Fixed Income Clearing Corporation as well as clients on the importance of continuing to broaden that program. So we don’t have any timelines to commit to at this point in time, but it is a focus of ours jointly to be able to expand those enhancements to the end client level, which I think will help even more with things we’ve already covered on the treasury mandate and needing more capital efficiencies to address things like increased capital costs under the Basel proposal. I think, Terry, I’ll hit at a high level the Basel proposal.
Terrence Duffy: Yes, let me just comment on the practicality, Michael, and I know that you’ve been there for a little while now at your firm and understand how this works. There is zero consensus amongst the regulators as it relates to some of these proposals in Basel III. Actually, there’s really opposing views to that, which makes it very difficult to move something forward we have internally at a regulator not the same people supporting the proposal. The markets need to remain efficient. And I guess, again, another solution looking for a problem with Basel III, we have never had an issue under the margin that we’re holding that needs to have a capital hit associated with it. We only think that would add to the lack of liquidity to the overall marketplace and make markets less efficient than they are today.
And that’s not healthy, especially as we laid out the fundamental places that we are in the world today and with the issuance coming forward. We need to manage this. There’s risk in everything we do in this life, including the treasury issuance and who’s using it or not. We think we have a very good platform, and we think that the rules that are in place right now makes sense for the users. And if you want to just continue to add capital charges to everything we do. I guess we can constrict it to zero, and we won’t have any more risk in the system, but we won’t have any economies around the world either. So I do think it gets to a certain point. Again, like I said earlier, this was proposed in 2017, and it was not agreed upon then, and so we’ll see where this goes.
We are meeting with people in Washington now. My Washington folks are trying to explain the detriment to such a proposal could bring to the overall marketplace.
Michael Cyprys: Great. Thanks so much. I appreciate it.
Terrence Duffy: Thanks, Mike.
Operator: Thank you. Our next question is from the line of Craig Siegenthaler with Bank of America. Please go ahead. Your line is open.
Craig Siegenthaler: Hi. Good morning, everyone. So in the quarter, there was another instance of vertical integration between an exchange or actually secondly, a DCM and an FCM. So now, we have Coinbase MIAX with vertically integrated business model. So first, I want to get your perspective on what this means for the ecosystem. And then — and also, CME already registered its FCM last year, I think partly in reaction to FTX’s move. So what are your updated objectives for that business now?
