SEC grants CME, CMDX special exemption to clear and trade CDS

By Jennifer Chiou

New York, March 13 - CME Group and CMDX announced that they have received a special exemption from the Securities and Exchange Commission for clearing and trading credit-default swaps through CME Clearing and the CMDX platform.

With this exemption, CME and CMDX have completed the regulatory reviews necessary to launch CDS clearing and trading in the United States, according to a news release.

The SEC exemption allows CME Group to use its existing clearing membership structure to offer CDS clearing services backed by CME's financial safeguards package of about $7 billion, the company said.

"We are pleased to have successfully completed the U.S. regulatory review process," said CME executive chairman Terry Duffy in the release.

"We are confident our significant financial safeguards package and the proven counterparty risk management framework of CME Clearing, which has protected investors across a range of financial instruments more than 100 years, can bring stability to the CDS market."

CME is a Chicago derivatives exchange, and CMDX is its associated joint venture.

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