CME Group’s credit default swap joint venture
with Citadel Investment Group will now only be a clearing
service, having previously been planned as a CDS trading and
As part of its refocus, CME has issued shares in the venture
to investment firms AllianceBernstein, BlackRock, BlueMountain
Capital Management, the DE Shaw group and Pimco. The exchange
said several leading sell side firms were in the process of
becoming founding members.
"Our solution offers point of execution clearing of CDS
trades, the greatest breadth of products to clear which
includes single name CDS, a comprehensive and transparent risk
management system, the security of our approximately $8bn
financial safeguards package, and an established regulatory
framework to protect customer positions and offer margining
efficiencies," said Craig Donohue, CME’s chief
executive, in a statement.
The exchange’s chairman Terry Duffy said: "Both
buy side and sell side participants have expressed an interest
in continuing to execute their CDS transactions the same as
they do today, but with the added benefit of central
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