* CME had sued CFTC to avoid giving data to rivals
* Two CME rivals already had approval in hand
* Swap data repositories (SDRs) required under Dodd-Frank
By Douwe Miedema
WASHINGTON, Nov 21 (Reuters) – A U.S. regulator on Wednesday
granted exchange operator CME Group Inc approval to run
a new type of data warehouse required under U.S. financial
reform rules.
The CME, the country’s largest operator of futures
exchanges, was the third company granted permission to register
as an official data repository, the Commodity Futures Trading
Commission (CFTC) said.
Earlier this month, the CME sued the CFTC due to frustration
that the agency had not yet ruled on its application to run a
swap data repository, or SDR.
Two CME rivals, the Depository Trust and Clearing
Corporation (DTCC) and the Intercontinental Exchange,
had already received approval to run SDRs, meant to shed greater
light on swaps trading, a $650 trillion, largely unregulated
financial market that were at the center of the 2008 financial
crisis.
The CME, which sued the CFTC to avoid having to report
transaction data to either of these two rivals, could not
immediately be reached for comment on whether the lawsuit would
continue.
Swaps – a catch-all phrase for many kinds of often highly
complex and lightly regulated financial instruments – will need
to be traded on exchange-like platforms, in what is expected to
lead to a substantial overhaul of the business.
They will in large part also need to be cleared, and
transaction data will need to be centrally stored in data
warehouses. The CME does not trade swaps, but it does offer
clearing services for these instruments.
The spat with the regulator is one of a growing number of
legal of challenges to the 2010 Dodd-Frank law, designed to shed
greater light on the commercially lucrative derivatives business
and prevent a repeat of the global crisis.
The derivatives industry successfully challenged another
CFTC rule in September, when a judge decided the watchdog had no
mandate to introduce a new rule to curb speculation in commodity
markets by putting caps on trading positions.
But the industry is divided about the CME’s lawsuit. One
leading lobby, the International Swaps and Derivatives
Association (ISDA), has distanced itself from the case.
DTCC has filed a motion saying the CME’s lawsuit could
disrupt the regulatory regime, seeking leave to intervene in the
case before federal court in Washington D.C.
