Eurex Seeks CFTC Approval For Over-The-Counter Clearing
May 13 2009 - 4:24PM
Dow Jones News
Eurex, the German derivatives exchange, is seeking approval from
U.S. regulators to allow domestic investors route over-the-counter
trades through its European clearinghouse.
The exchange is looking for U.S. recognition of Eurex Clearing
in lieu of setting up its own U.S.-based clearinghouse, according
to Heike Eckert, Eurex's head of U.S. operations.
Eurex, which is co-owned by Deutsche Boerse (DB1.XE) and SWX
Swiss Exchange, is setting up its own European clearinghouse for
credit credit default swaps after an unsuccessful effort to create
a U.S. platform.
Its plans were disclosed Wednesday in a filing with the U.S.
Commodity Futures Trading Commission.
The goal is to allow U.S.-based clients of Eurex Clearing to
clear block trades and other transactions in a variety of OTC
instruments, including credit derivatives, Eckert said in an
interview with Dow Jones Newswires.
U.S. regulators have approved new OTC clearing platforms for CME
Group Inc. (CME), IntercontinentalExchange Inc. (ICE) and NYSE
Euronext (NYX). The exchanges are also eyeing European
platforms.
Eurex's application for multilateral clearing organization
status, which the CFTC submitted for public comment Wednesday,
would recognize Eurex Clearing's oversight by German and U.K.
regulators.
Ekhert said Eurex Clearing hasn't given up on the prospect of
setting up a separate entity to clear U.S. credit derivative
trades, and that the exchange remains in discussions with the
Federal Reserve, the CFTC and the Securities and Exchange
Commission on that front.
"We filed [this] application because it's still unclear who the
regulator might be" for credit default swaps, Ekhert said.
Eurex recently has sought to bolster its Washington presence as
it encourages U.S. recognition of foreign regulatory practices.
In Europe, Eurex is one of several exchanges battling to clear
credit default swaps, and officials expect to begin handling trades
in July.
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117;
jacob.bunge@dowjones.com