CFTC Gives CME Right to Keep Swaps Data
By Jamila Trindle
WASHINGTON--The Commodity Futures Trading Commission handed CME Group Inc. (CME) a win Wednesday in an industry fight
over who will control valuable data in the newly regulated swaps market.
On the other side of the argument, large banks that have dominated the swaps market would like to keep control of the
data and send it to the repository they own, Depository Trust & Clearing Corp.
In reaction to the decision, DTCC is expected to sue the agency, said CFTC Commissioner Scott O'Malia.
DTCC's General Counsel Larry Thompson said in an e-mailed statement that he is considering next steps "to protect
market participants' choice for where to report their swaps transactions."
Mr. O'Malia, a Republican, abstained from the vote because he says the agency isn't going far enough to resolve the
"There are still conflicts in the rule in who ultimately can make the decision about where the data goes and who
controls the regulatory record," Mr. O'Malia said.
The CFTC approved the CME's request to send data from trades that go through its clearinghouse to its own swap data
The data repositories are meant to bring more transparency to the market by giving regulators access to the data and
making some of it public, but the disagreement is over who will control the nonpublic data.
"Some participants have a concern about their data going into someone else's database, where it might end up being
commercialized," said DTCC data repository Chairman Mike Dunn, a former CFTC Commissioner.
A CME spokeswoman said in an emailed statement that the CME is "very pleased" with the CFTC's decision.
Larry Tabb, founder and CEO of Tabb Group, a financial markets research and advisory firm, estimates that the swaps
data business is worth $2.1 billion globally.
Mr. Tabb said the way the data is used will change once the market is regulated, but the data will still be valuable.
"They know once they have it and it's formatted there will be ways to monetize it," Mr. Tabb said.
-Scott Patterson contributed to this report.
Write to Jamila Trindle at Jamila.firstname.lastname@example.org.
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