CME Group, DTCC Say Feds Reviewing For Dodd-Frank Designation
February 02 2012 - 3:01PM
Dow Jones News
Two major clearinghouse operators Thursday confirmed that
federal regulators have started a review to determine whether to
consider them "systemically important."
CME Group Inc. (CME) and the Depository Trust & Clearing
Corp. separately said that they are working with regulators to see
if they will fall under new rules created by the Dodd-Frank
financial-overhaul law.
"I certainly would be surprised if CME did not fit the
definition of a systemically important clearinghouse under the new
federal regulations," Kimberly Taylor, president of CME Group's
clearinghouse division, said in a conference call to discuss the
company's earnings.
The Depository Trust & Clearing Corp. said its National
Securities Clearing Corp., Fixed Income Clearing Corp. and
Depository Trust Co. subsidiaries had received notifications that
they are being considered for designation as systemically important
financial market utilities.
"We are neither surprised at nor do we disagree with the
designation being considered by the" Financial Stability Oversight
Council, said DTCC spokesman Stephen Letzler.
Regulators last month notified some payment and clearing firms
that they face a review to determine whether they are systemically
important--that is, whether their failure could pose a risk to the
economy.
The Financial Stability Oversight Council, comprising top
financial regulators and created by Dodd-Frank, last month sent
letters to so-called financial-market utilities--the minutes didn't
specify which or how many--saying they are being considered for
designation as systemically important.
The move is the first significant step regulators have taken to
give entities this label, which is a central plank in Dodd-Frank's
effort to end the existence of "too big to fail" companies, or
financial entities whose collapse would wreak such havoc on the
broader economy that the government would have to bail them
out.
-By Jeffrey Sparshott, Dow Jones Newswires; 202-862-9291;
jeffrey.sparshott@dowjones.com
--Jacob Bunge contributed to this article.
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