Da Merc <object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/atFKu-gskxE&hl=en"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/atFKu-gskxE&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>
It's a turd. Without the sponsorship of the "larger" primary dealers, it should fail within 12 months from lack of trading interest.
From what I've heard, this is a rivalry between Ivy Leaguers in New York and non-Ivy Leaguers in Chicago. Supposedly Cantor et. al. were lobbying the DoJ to separate the clearing entity from CME which would fuck with CME's profitability and competitive advantage and level the playing field for this new exchange
As a lifelong Chicagoan and an Ivy league-er myself, I can attest to the fact that the Chicago trading community is loaded with my fellow alumni. After all, this was the only place in the country to seriously trade derivatives until recently. Even now, despite the prevalence of screen trading, Chicago is still the Mecca of the derivatives world. Like all things in the financial market, this confrontation is about money. Specifically, the fact that the Merc's monopoly power threatens the OTC derivatives market. ELX's investors are some of the primary players in the OTC derivatives market, so it makes sense that they would try to create a rival to the Merc.
On a deeper level, people away from New York City create intellectual property. People in New York City try to steal it. This is no different.