Phupinder Gill - named this week to be CME Group Inc's next CEO - made a caustic comment that nearly wrecked talks in the late 1990s over linking up with cross town rival Chicago Board of Trade.

Quickly seeking to patch things up, Gill sent a bouquet of flowers to Tom Hammond, the Chicago Board of Trade Clearing Corp executive across the table. The note was brief but quintessential Gill: Do you still love me? Gill did not clinch a deal that year, but CME eventually did forge a clearing link with CBOT and bought the exchange outright in 2007. Born in Malaysia and raised in Singapore, Gill is known in the close-knit U.S. futures industry as the behind-the-scenes plumber who understands the inner workings of the exchange and its all-important clearing operations.

Now Gill, 51, will need to bring his diplomatic skills to the exchange at a watershed period in its 164-year-old history. Last October's collapse of futures brokerage MF Global and the $1.6 billion in customer money that is still missing from the failed broker's accounts, has shaken trader confidence in the industry and touched off what promises to be a rash of new regulations aimed at restoring trust, but which industry skeptics worry will choke growth.


Gill, who speaks Malay and Taiwanese in addition to English, arrived in the U.S. in 1983 to attend Washington State University.

After getting his undergraduate and business degrees there, he moved to Chicago, spending a brief time on the Chicago Board Options Exchange floor before becoming a pit reporter for the Chicago Mercantile Exchange.

These days he travels to Asia half a dozen times a year visiting clients, taking time also to see family still living in Singapore and Hong Kong.

That routine will change once he becomes CEO in January, he said, when he'll spend more of his time meeting investors.

Gill's gregarious personality, salty speech and occasional stutter mark a sharp contrast to CEO Craig Donohue, the buttoned-up lawyer by trade and demeanor, who led the exchange through eight years of dynamic growth.

During a 30-minute lunch with reporters on Wednesday in which he discussed topics including selling shoes in India, regulation in China and layoffs during mergers, he dropped the f-bomb three times.

When I first came to the U.S., I could not believe Americans ate raw leaves, he joked as he tucked into a salad at the Futures Industry Association's annual meeting here.

For the most part Gill has been a behind-the-scenes leader of the exchange's day-to-day operations. He has played a key but unsung role in CME's serial deal-making, but left most public appearances to Donohue and Executive Chairman Terrence Duffy. He is also widely respected for his detailed understanding of CME's clearing business, which he headed from 2000 to 2004, when he was promoted to the office of the CEO and the position of CME president. Jack Sandner, a former CME chairman and an influential director on the CME board, said Gill is ready to be CEO. To spectators in our industry, they won't see all of Gill's real talents because he's not demonstrative. He's completely the opposite - he's ego less, said Sandner. Now that he's got the responsibility, you'll see his talents and they won't just say he's a great operations guy. He'll be a great leader.

STRAIGHT SHOOTER Craig Donohue, who has led CME since 2004, said on Monday he planned to step down as CEO at the end of the year. The company designated Gill as Donohue's successor. During a conference call after the announcement, Gill promised to stay the course on CME's strategic direction. But in an interview on the sidelines of the Futures Industry Association conference, Donohue acknowledged Gill will likely bring a different flair to the job. Gill's communication style is different than mine, Donohue said. He's more informal and relaxed. He's more direct, but he is absolutely a great people person. At the annual industry meeting, Gill kept a low profile, making only one brief address in a public forum. As he made his way out, several CME customers stepped forward to shake his hand. Gill clapped each on the back. How many hands do you think you've shook in the past few days? a reporter asked. Well, let's see, Gill deadpanned, I've licked four ... Sandner points to other talents as well. It was Gill who in 2007 made the call to a key Chicago Board of Trade shareholder who had balked at the price CME was offering for the exchange. Gill told him CME was finally ready to pay more and the two men struck a deal. Gill also serves as a critical counterweight on a crowded board of directors dominated by big personalities such as Sandner, a former boxer, and Executive Chairman Terrence Duffy, once a hog futures pit trader. If you get a little over your skis, he'll call you on it in the board room or whatever; he'll call you on it and say, very politely, that's not correct, Sandner said.

CME VETERAN Gill, like current CEO Donohue, has worked for CME for more than 20 years and caught the attention of CME executives early in his career. Bill Brodsky, the Merc's CEO from 1985 to 1997, said he knew Gill as one of the hardest-working of his employees, to the point where we had to throw him out of the office.'

We said: ‘You can't come in this weekend,' Brodsky recalled. He was a favorite too of Leo Melamed, the former CME chairman who still wields power at the exchange operator through his leadership on key boardroom committees. Highly intelligent, with a penchant for diplomacy, Phupinder Gill went on to become for me the single most important exchange management official, Melamed gushed in For Crying Out Loud, his 2009 account of the rise of computer trading in the futures industry. With the failure of MF Global, the futures industry is staring at the likelihood of new regulations from the Commodity Futures Trading Commission and Congress. That raises the need for someone such as Gill, said Walt Lukken, a former CFTC chairman and new president of the futures association. These are complex issues, Lukken said, comparing Gill to a plumber for his knowledge of the inner workings of CME. Who better than plumbers to figure out how to unclog the clogs and fix the leaks? Last November, after CME agreed to lead an industry effort to place the tens of thousands of former MF Global customers with new brokers, Hammond, now the head of IntercontinentalExchange Inc's U.S. clearinghouse, sent flowers to Gill's office to thank him. Here I am, two weeks later, and I see this dried up bouquet of flowers on my desk, Gill complained to Hammond afterwards, having spent the days in between at the clearinghouse dealing with the MF Global fallout. And there's this card, and it says: 'I do.'

(Additional reporting by Tom Polansek; editing by Andre Grenon)