Securities Law Updates | New Releases/No Action Letters
March 20, 2009
SEC Approves Exemptions Allowing Chicago Mercantile Exchange to Operate as Central Counterparty for Credit Default Swaps
Order Granting Temporary Exemption Related to Central Clearing of Credit Default Swaps
Release No. 34-59578; File No. S7-06-09, 3/13/2009
The Securities and Exchange Commission (“SEC”) has taken further action to help increase the transparency of credit default swaps (“CDS”) by approving conditional exemptions that will allow the Chicago Mercantile Exchange Inc. (“CME”) to operate as a central counterparty (”CCP”) for clearing them.
A CDS is a bilateral contract between two parties, known as CCPs. The value of this financial contract is based on underlying obligations of a single entity or on a particular security or other debt obligation, or an index of several such entities, securities, or obligations. The obligation of a seller under a CDS to make payments under…
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