The top executive of CME Group Inc. (CME) said Tuesday the exchange is unfazed by indications that dealer banks are moving credit derivatives business onto a rival clearing platform faster than expected.

While IntercontinentalExchange Inc. (ICE) reported Monday that it has cleared more than $150 billion in credit derivatives trades since launching its service in early March, CME's own platform remains in the wings, awaiting backers.

Nearly two months have passed since CME received final regulatory clearance to roll out its credit default swaps solution, a joint venture with Citadel Investment Group called CMDX, which has been operationally ready for months but continues to await a critical mass of clearing members and market participants.

However, credit derivatives' migration to clearinghouses is "not going to happen quickly," said Craig Donohue, chief executive of CME, in an interview with Dow Jones Newswires.

CME continues to court a handful of banks as it touts a fresh approach to the dealer community, though many observers still see ICE as the heavy favorite in CDS clearing after the Atlanta-based exchange landed the support of major banks via its acquisition of the bank-backed Clearing Corporation.

Last week ICE moved further ahead as it began clearing live credit derivatives trades after weeks of back-loading existing positions into its ICE Trust platform.

Nevertheless, Donohue said that CME is not worried, reiterating that the company views credit derivatives clearing as a "marathon" rather than a sprint.

He compared the credit derivatives market's adoption of central counterparty clearing to traders' gradual embrace of electronic futures trading, a process that began around the turn of the century and continues to play out. Currently, more than 80% of CME's overall volume is electronic.

While ICE deserved credit for its CDS success, Donohue said that its volume to date represented only about three-tenths of 1% of total outstanding trades in the $28 trillion market.

To make up ground, Donohue said CME's service will look to leverage the brand name of its ClearPort over-the-counter clearing platform, and bring more buy-side participants in credit derivatives into the fold.

CME will create "founding member roles," he said, offering a minimum 50% equity stake in CMDX to dealers and large buy-side institutions like asset management firms and hedge funds.

Donohue also said that the focus on credit derivatives clearing, which grabbed headlines last fall after regulators insisted on a market-led solution before the end of 2008, was overdone in the context of other, larger over-the-counter markets also migrating toward the central counterparty model.

Donohue was speaking on the sidelines of an Executives' Club of Chicago luncheon, where he was named International Executive of the Year.

 
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com