CDS Clearing Clears Regulatory Hurdles

摘要

Regulators approved in late December a proposal from NYSE Euronext Liffe and a separate proposal from CME Group and Citadel Investment Group to provide centralized clearing of credit default swaps, setting the stage for competition between the clearing solutions.rnThe approvals follow a tumultuous year in the financial markets that saw the collapses of Bear Stearns in March and Lehman Brothers in September, which raised fears over global sys-rntemic risk in the credit derivatives markets fueled by counterparty exposure. Regulators pressed the industry to establish a centralized clear-rning facility for CDSs to mitigate counterparty risk, setting a deadline of Dec. 31, 2008.rnDays before Christmas NYSE Euronext's derivatives group, Liffe, and LCH.Clearnet, the London-based clearing facility, received approval from the Securities and Exchange Commission to offer their CDS clearing solution to qualified U.S. investors. The central clearing solution is available through Liffe's Bclear platform, which went live in Europe on Dec. 22.