Nov 13 U.S. exchange operator CME Group
has been granted more time to report trading data by the
Commodity Futures Trading Commission after it sued the regulator
in a spat over compliance that has split the derivatives
The CME is suing the markets watchdog, seeking to prevent
the enforcement of rules that require it to report swaps
transaction data to a third party and which were due to go into
effect on Tuesday. T h e CME wants to rely on its own data
warehouse, or Swaps Data Repository, instead, and is seeking
permission from the CFTC to operate one.
The CFTC has now granted the CME until Dec. 4 to comply with
the rules but it remains unclear whether this extension means it
is likely to gain permission for its own data warehouse.
The CME's lawsuit is one of growing number of challenges to
the 2010 Dodd-Frank law that is designed to avoid a repeat of
the global financial crisis. One of the law's aims is to shed
greater light on the commercially lucrative derivatives
A letter obtained by Reuters and confirmed by the CFTC as
authentic said the regulator "has determined to further extend
the period of no-action relief, and will not recommend that the
Commission commence an enforcement action against CME Clearing".
A CME spokesman would not say if the exchange operator would
drop its lawsuit now that the CFTC had granted it a reprieve.
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 an overhaul of the lucrative business.
They will in large part also need to be cleared and
transaction data will need to be centrally stored in data
A CME competitor, the Depository Trust and Clearing
Corporation, on Monday filed a motion with the U.S. District
Court in Washington, saying the CME's lawsuit against the
regulator could disrupt the regulatory regime mandated by the
Dodd-Frank Act and was against the public interest.
The DTCC already operates its CFTC-approved data warehouse,
and the CME wanted to avoid having to hand over the transaction
data to its rival. The Intercontinental Exchange also
has a license to operate a data warehouse. The number of
operators is expected to stay low.
The International Swaps and Derivatives Association lobby
group has also distanced itself from the CME, warning that a
proliferation of data warehouses is likely to harm transparency.