CDS Platforms Expect Boost From Transparency Initiative
May 18, 2009
The Treasury Department's call for central clearing of standardized derivatives contracts and electronic reporting for all over-the-counter derivatives should boost electronic trading platforms in the OTC space, as well as benefit exchanges aiming to capitalize on the government's push to boost transparency in the trading of credit default swaps.
The specifics of the clearing and reporting rules have yet to be worked out: Treasury Secretary Timothy Geithner called upon Congress to make them possible only last week. But Creditex and other electronic platforms offering derivatives trading said such rules would benefit their systems.
"We are working to meet the new regulatory objectives in a way that will improve efficiency, transparency and soundness in the CDS market," said Richard McVey, CEO of MarketAxess, a multi-dealer-to-buy-side corporate bond system that offers e-trading of credit default swaps (CDS) indices and single names.
