CME delays European CDS clearing plans

CHICAGO, May 17 (BestGrowthStock) – CME Group Inc (CME.O: ) is
delaying a plan to clear credit default swaps in Europe, the
second time the world’s largest futures exchange operator has
scaled back its ambitions in the $25 trillion market.

CME Group now plans to focus its over-the-counter European
clearing effort on energy derivatives, according to a revised
application to U.K. regulators filed this month.

CME’s initial application for its European clearing house,
filed in the middle of last year with the Financial Services
Authority, was for credit default swaps.

“Following discussions with European customers, we have
augmented our FSA application to include energy products,” a
London-based CME Group spokesman said. “Going forward, the
services will include other asset types, including CDS.”

He did not provide any time frame for clearing the swaps.

Regulators worldwide are pushing for more clearing of the
contracts, whose lax regulation is seen as part of the cause of
the near-collapse of global financial markets in late 2008
after the failure of Lehman Brothers Holdings Inc.

CME similarly cited customer preference last year when it
retreated from plans to offer trading and clearing of credit
default swaps through a joint venture with Chicago-based hedge
fund Citadel Investment Group.

It later did begin offering swaps clearing in the U.S., but
its efforts have been eclipsed by those of rival
IntercontinentalExchange Inc (ICE.N: ), which launched swaps
clearing services more than a year ago and now dominates the
business.

NYSE Euronext (NYX.N: ) has also pulled back from its
European clearing program.

Stock Market Report

(Reporting by Ann Saphir; Editing by James Dalgleish)

CME delays European CDS clearing plans