CME Group opens up Credit Default Swaps initiative.Byline: news@cpifinancial.net (Staff Writer) CME CME See: Chicago Mercantile Exchange CME See Chicago Mercantile Exchange (CME). Group, the world's largest derivatives marketplace, said that its credit default swap Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties. Notes: The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. (CDS) joint effort with Citadel Investment Group Citadel Investment Group is a $13.4 billion [1] hedge fund based in Chicago, Illinois, founded by billionaire trader Kenneth C. Griffin. It is one of the world's largest hedge funds. will be restructured as a programme targeted at providing clearing-only services for the nearly $27 trillion credit default swap (CDS) market, effective immediately. Key features developed as part of the joint effort with Citadel, which was known as CMDX, will be carried forward in the clearing-only service, including state-of-the-art trade booking and legacy trade migration facilities. Citadel remains a founding member of the newly restructured CDS initiative. The other buy-side founding members are: AllianceBernstein, BlackRock, BlueMountain Capital Management, the D. E. Shaw group and PIMCO PIMCO Pacific Investment Management Company . A number of leading sell-side participants are in the process of becoming founding members. CME Group plans to announce the launch of the clearing initiative's pilot program in the weeks ahead. Terry Duffy, Executive Chairman, CME Group 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 counterparty clearing." CME said its clearing solution builds on the existing over-the-counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ) market, with ISDA-based CDS contracts that are economically equivalent to the current OTC contracts, and incorporates CME Group's straight-through-processing clearing model to deliver the clearing of CDS trades at the point of execution rather than through batch processing (1) Performing a particular operation automatically on a group of files all at once rather than manually opening, editing and saving one file at a time. For example, graphics software that converts a selection of images from one format to another would be a batch processing utility. , which provides immediate cleared trade confirmation and settlement and leaves no window of credit exposure between bi-lateral parties to a trade they wish to clear. It also allows the migration of legacy non-cleared positions to cleared trades, simplified through use of existing market infrastructure. Products supported at launch will include a range of Markit CDX CDX Companion Dog Excellent (AKC Obedience Title) CDX Cyber-Defense Exercise CDX Central Data Exchange CDX Community Development Exchange (UK community development organization) CDX Commercial Data Exchange indices and liquid single name CDS. CME Clearing also supports trade entry through its CME ClearPort platform, enabling connectivity from any trading platform. 2009 CPI Financial. All rights reserved. Provided by Syndigate.info an Albawaba.com company |
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