CME Group, DTCC Say Feds Reviewing For Dodd-Frank Designation

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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