Chicago Mercantile Exchange Holdings Inc. today reported a 23% increase in second quarter net revenues to a record US$295 million and a 32% increase in net income.

Second-quarter income before income taxes was US$180 million, an increase of 32% from US$136 million for the year-ago period. The company’s operating margin was a record 61%, compared with 57% for the same period last year.

Average daily volume was a record 5.7 million contracts for the second quarter, a 31% increase from the second quarter of 2005. Trading on its electronic trading platform grew 29% to 4.0 million contracts per day, and electronic volume represented 70% of total CME volume in the quarter.

“CME finished a record quarter with unprecedented volumes across all product lines, particularly in June where volume increased 51%,” said CME chairman Terry Duffy. “During times of geopolitical uncertainty and heightened volatility, the business of managing risk becomes even more important for our users around the globe. We implemented several important technology enhancements last quarter that significantly improved transaction speed and expanded our capacity to handle record volume levels efficiently.”

“Great execution in our core businesses led to record volumes, revenues, and earnings,” said CME chief executive officer Craig Donohue. “We also continue to expand our business beyond our traditional offerings. During the second quarter, we launched trade matching services for NYMEX energy futures on CME Globex; we created FXMarketSpace, a joint venture with Reuters, which will be the world’s first centrally cleared global foreign exchange marketplace; and in early July we announced our acquisition of Swapstream, a leading multilateral trading platform for OTC interest rate swaps.”

Clearing and transaction fees increased 25% to US$229 million. Record quarterly average daily volume across all product lines fueled this growth. Revenue from processing services rose 7% to US$20 million and quotation data fees were up 16% to US$21 million. Total expenses increased 12% to US$115 million, driven by higher license fees and ongoing investments in technology. In 2006, the company expects annual overall expense growth in the high end of its previously stated 12% to 13% range, following its acquisition of Swapstream.