CME Group Inc.'s (CME) plan to offer clearing for credit-default swap trades surpassed the last major regulatory hurdle Friday after the Securities and Exchange Commission gave CME's clearing platform the green light.

The clearinghouse, dubbed CMDX, is a joint venture with the hedge fund firm Citadel Investment Group. The SEC's approval will allow CME to open the second-ever clearinghouse for credit-default swaps in the United States and give the company a chance to compete for business with IntercontinentalExchange Inc. (ICE), which launched its own credit-default swap clearinghouse earlier this week.

"The SEC is committed to increasing investor protection and reducing systemic risk by facilitating the development and oversight of central counterparties to clear credit default swaps," said SEC Chairman Mary L. Schapiro. "Today's actions will further enhance opportunities to manage the risk related to credit default swaps and improve the transparency and integrity of the market for these products."

Some critics believe these complex instruments have played a role in the financial crisis. As evidence, they point to the near-collapse of American International Group Inc. (AIG), which issued credit-default swaps without having enough collateral to fulfill the provisions in those contracts. As a result, regulators and lawmakers have pushed for centralized clearing of these complex financial instruments as a way to mitigate risk to the wider marketplace and shed some light into this now-opaque market.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com