CDS clearing market to shift?

Does the CME Group have a chance in the nascent CDS clearing market? It certainly remains the underdog. The IntercontinentalExchange, known as ICE, has leaped out of the gate to a big advantage. It is the only entity that can boast any real clearing volume. We've noted before that this stems in part from its relationships with the top dealers, all of whom are part owners of the service.

But the CME and its partner Citadel are not giving up. According to Securities Industry News, they will announce within weeks their new clearing venture--after the CME scrapped its original system--and hopes to outflank the ICE. The CME Group is building some sell-side links and hopes many sign on.

It has also built some ties to the buy-side. It seems to have persuaded the likes of AllianceBernstein, BlackRock, BlueMountain Capital Management, the D. E. Shaw group and PIMCO to join. It may get some regulatory support, if officials decide that the market would be better off with true clearing competition. 

For more:
- here's the article

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