The exchange business is a funny business. For the establishment, it is relatively easy money; pretty high profit margins, some competition but usually only in the fringes of your product offering. Unless you make an real effort in slitting your own wrists (crappy IT, failed mergers, poor service, silly management), you'll be right as rain. It is not for nothing that most exchanges can trace back their heritage further than any company they ever listed.
For the challengers though, it has proven difficult to take on the establishment. CME Europe and CME Clearing Europe will cease operations by the end of the year. Surprising? Yes in part. CME as a global powerhouse is part of the establishment. One would have expected that the combination of top notch technology, a unique product offering and client base across the whole of Europe could not fail. But it did. And why? Nobody needed it. In that respect it is a lot similar to the effort that Eurex made to build their own exchange in the US about 12 years ago.
Look at it this way: was there no possibility to trade CME in Europe prior to the establishment of CME Europe? Yes, there was and financial institutions were not willing to put money into changing their infrastructure to trade on CME Europe. CME in the US offers everything they need. Furthermore, European exchanges offer a wide range of products, deep liquidity and good infrastructure. So, CME did not add enough value in Europe. And that's exactly the reason why it should not surprise anyone that CME Europe did not succeed.
So CME will need to review it's strategy for Europe. No sure what that can be. The European exchange landscape will change in the next few years and once the dust settles, a new opportunity might become clear. It would not surprise me if this is not directly linked to derivatives or on exchange trading. With new regulation coming our way, new needs will arise and there lies the opportunity. Not in doing what has ready been done.
What is clear though is that most routes for challengers are not panning out. TOM could not do it by merely being cheaper, CME Europe couldn't pull it off by copy/pasting themselves and NASDAQ NLX couldn't succeed by copy/pasting Eurex. That does not bode well for other challengers. Let's speculate on the next contender to go the way of the Dodo. CurveGlobal? London Derivatives Exchange?