CME starts clearing trades

The CME has come storming into the credit derivatives central clearing market in a big way. Last week, we noted the exciting development that it had inked deals with a host of dealers and, perhaps more importantly, a group of buy-side firms. The list includes the likes of BlackRock, D.E. Shaw Group, Pacific Investment Management Co. and Citadel Investment Group. They are excited about the prospect of easily using margins for both CDSs and futures.

Even better, the CME has also announced that it has--finally!--actually cleared some trades. Reuters notes Barclays Capital had the distinction of clearing the first ever CDS trade via the CME's new service. So it looks now like we have a two horse race. I doubt any more players will emerge. The IntercontinentalExchange of course was first out of the gate, and has a nine month advantage. We'll have to wait and see if courting the buy-side will make a difference in this nascent market. 

For more:
- here's the article

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