NEW YORK, March 13 (Reuters) - CME Group received permission from the U.S Securities Exchange Commission on Friday to operate as a central counterparty for credit default swaps, paving the way for the derivatives exchange operator to become the second CDS clearing venue in the United States.
Earlier this week, rival exchange operator InterContinental Exchange Inc launched its CDS clearinghouse.
A CME spokeswoman said the exchange had not yet decided on a date to launch its clearinghouse, which it developed with Chicago-based hedge fund Citadel Investment Group.
Exchanges have been in a race to set up clearinghouses for CDS since regulators targeted the market last year. A recent study by consulting firm TABB Group estimated that CDS clearinghouses will get about $100 million in revenue in 2009, and $138 million by 2011.
The private and interconnected nature of the CDS market has been faulted for worsening the global credit crisis, including the unwinding of positions held by U.S. insurance company American International Group.
(Reporting by Phil Wahba) Keywords: CME/CDS (phil.wahba@thomson reuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Earlier this week, rival exchange operator InterContinental Exchange Inc launched its CDS clearinghouse.
A CME spokeswoman said the exchange had not yet decided on a date to launch its clearinghouse, which it developed with Chicago-based hedge fund Citadel Investment Group.
Exchanges have been in a race to set up clearinghouses for CDS since regulators targeted the market last year. A recent study by consulting firm TABB Group estimated that CDS clearinghouses will get about $100 million in revenue in 2009, and $138 million by 2011.
The private and interconnected nature of the CDS market has been faulted for worsening the global credit crisis, including the unwinding of positions held by U.S. insurance company American International Group.
(Reporting by Phil Wahba) Keywords: CME/CDS (phil.wahba@thomson reuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.