Chapter 19

The Rise of the Chicago Climate Exchange

If you intend to take Vienna, take Vienna.

Napoleon Bonaparte

I have always loved December. It is the month when we can reflect on our successes and failures, and plan for the coming year. Contrary to the traditions of the capital markets, we always thought of December as a great time to build on existing business relationships. It was also a time to make new business friends. Financial innovation cannot be explained in a rushed 10-minute call, and people are generally more relaxed as the holiday season approaches, giving us more time to explain our business.

The end of 2003 was no different in this respect. The team worked very hard between Thanksgiving and Christmas, and it paid off. Our Christmas parties moved from a small table of six into a private dining room to accommodate our growing staff.

Recruiting the A-Team

CCX had a truly decentralized business model. We realized early on that our core competence was product innovation and sales, and outsourced almost everything else. It was a unique setup for an exchange. Compliance, technology, legal, and clearing were all outsourced. However, for each function we outsourced, we retained an experienced professional internally to help manage our relationship with the outside service provider and provide strategic vision. Having seasoned professionals on our staff was important, especially in the regulatory and legal departments. We were exempt from regulation by the CFTC but I ...

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