Writing in Forbes, author and academic Larry Harris calls for the US regulators to crack open the futures market which will otherwise become a virtual monopoly with the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade. (The link comes from Alea.)

Unlike other financial products like equities and options, US futures are tied to the exchange where you bought them - which makes no intuitive sense at all, and allows the exchange to keep fees high, because they don't have to worry about people setting up rival exchanges or just trading off-board. The CME/CBOT merger means that they will lock up this market for good, almost monopolising the futures business, Harris warns. And he concludes:

"When exchanges were not-for-profit organizations controlled by their member traders, the members acted in their self-interest to keep fees reasonable. This self-interest helped keep exchanges from exploiting the power in their unique positions.

"Now that exchanges are for-profit corporations, they no longer face the same restraints on their fees. The failure to address the off-board trading restriction problem will ultimately ensure that only exchange shareholders and exchange managements will benefit from the cost savings that consolidation and new electronic technologies are bringing to the exchange services arena."

Here are our reports on the merger. Note that cost savings are predicted, but not necessarily reductions in fees...

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