November 29, 2012 / 7:01 PM / 5 years ago

CME rival says regulator's swap rule change disruptive

CHICAGO (Reuters) - The Depository Trust and Clearing Corp on Thursday lashed out at a regulator’s decision to consider a rule change that would make it easier for DTCC rival CME Group to keep its customers’ swaps data to itself.

The U.S. Commodity Futures Trading Commission on Wednesday said it was seeking public comment on a CME rule that would require traders clearing swaps at CME’s clearinghouse to report data on those swaps to CME’s own swap data repository.

The CFTC regulates over-the-counter swaps and is writing rules that will radically change how they are transacted.

It had previously issued guidance banning a clearinghouse operator from requiring its customers to use its captive swap data repository, and making it clear that the choice of data repository is up to the customers. The CFTC withdrew that guidance on Wednesday.

“The Commission’s action late yesterday was an unexplained and an abrupt reversal of course,” the DTCC, which runs a rival swaps data repository, said in a statement.

“This action is inconsistent with the Commission’s previous actions, and will cause market participants to question the finality of any Commission rule or interpretation.”

Under new CFTC rules, most contracts in the opaque $650 trillion swaps market must be reported to a data repository to make it easier for regulators to keep track of them. Critics say a lack of transparency in the swaps market exacerbated the global financial crisis in 2008.

Reporting by Ann Saphir; Editing by Dale Hudson

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