By Jacob Bunge
CME Group Inc. (CME) said Wednesday it submitted an application
to operate a platform for trading swap contracts, adding the
world's largest futures exchange operator to the slate of companies
jockeying for business under new financial regulations.
CME filed an application with the Commodity Futures Trading
Commission to register a so-called swap-execution facility, new
platforms outlined under the 2010 Dodd-Frank financial law to boost
transparency in the $633 trillion global market for derivatives
traded off-exchange.
Regulators in the U.S., Europe and Asia are backing efforts to
shift trading in instruments like credit derivatives and
interest-rate swaps after privately-traded derivatives contracts
markets caught blame for exacerbating the financial crisis in 2008.
In the U.S., part of that effort involved setting up such
swap-execution facilities, regulated platforms for trading such
contracts.
CME said Wednesday its swap-execution facility, which requires
CFTC approval to launch, would be available via its CME Direct
trading platform used for trading energy and metals contracts. The
effort initially will focus on trading commodity-linked swaps,
though it may later add other financial products, CME said.
CME's move follows similar plans by major Wall Street brokers as
well as rival IntercontinentalExchange Inc. (ICE), which outlined
in August a similar swap platform that ICE said would enable
trading in credit derivatives linked to North American and European
companies and countries. ICE, which runs derivatives markets mainly
focused on energy and commodities, this fall aims to close a deal
to acquire NYSE Euronext (NYX).
Write to Jacob Bunge at jacob.bunge@wsj.com
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