By Ann Saphir
CHICAGO, Nov 29 (Reuters) - CME Group on Thursday pulled its
lawsuit against the Commodity Futures Trading Commission after
the U.S. regulator withdrew rules that would have stopped CME
from warehousing data generated by its swaps clearing business.
New CFTC rules require most contracts in the opaque $650
trillion swaps market to be reported to a data repository to
remedy a lack of transparency in the swaps market that critics
say exacerbated the global financial crisis in 2008.
The CFTC, which regulates over-the-counter swaps, had issued
guidance banning a clearinghouse operator from requiring
customers to use its captive swap data repository.
CME sued to block those rules on Nov. 8, saying they
contradicted other rules written under the Dodd-Frank financial
reform law. The law requires standard swaps to be traded on
regulated platforms and routed through clearinghouses, which
stand between parties to guarantee their trades.
On Wednesday, the CFTC withdrew its ban and said it would
seek public comment on a CME rule that would require that CME's
clearinghouse report data on CME-cleared swaps to CME's own swap
CME withdrew its complaint from U.S. court on Thursday
"without prejudice," meaning it could refile the lawsuit in the
future, a spokeswoman told Reuters.
The Depository Trust and Clearing Corp, which operates a
rival swap data repository, blasted the CFTC's reversal, which
could allow CME to keep its customers' swaps data to itself.
"The Commission's action late yesterday was an unexplained
and an abrupt reversal of course," the DTCC said in a statement
"This action is inconsistent with the Commission's previous
actions, and will cause market participants to question the
finality of any Commission rule or interpretation."
CME's complaint against the CFTC was the third challenge to
the regulator in its history.
The case is Chicago Mercantile Exchange Inc. v. U.S.
Commodity Futures Trading Commission, U.S District Court for the
District of Columbia, No. 12-cv-1820.
(Corrects to show in fifth paragraph it is the clearinghouse,
not traders, that are required to report swaps data to CME's
swap data repository)
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