CME sues to protect its swap data

A new lawsuit by the CME to protect is trade data from having to be sent to DTCC or other centralized swap data repositories  could threaten or slow down the drive to increased transparency in derivative markets.

From Reuters,

In the lawsuit, CME asks that a judge issue an injunction to prevent the CFTC from enforcing the rules against the exchange when they come into effect for it on November 13.

By adopting the rules without “the benefit of an adequate cost-benefit analysis,” CME said in the lawsuit, “the CFTC acted in a manner that was arbitrary and capricious and otherwise not in accordance with law”.

A CFTC spokesman declined to comment on the lawsuit.

CME, specifically, is challenging the requirement that exchanges make available non public reports of cleared swap transactions to new CFTC-registered entities called “swap data repositories” (SDRs) which would in turn make the swap data available to the CFTC.

“CME incurs substantial costs in terms of time, personnel, technological infrastructure, and money to maintain these data in the ordinary course of¬†business,” the lawsuit said.

The new rules would only “impose costly, cumbersome, and duplicative requirements”.

CME said in the lawsuit that it had applied to register as an SDR, but that its request had not been granted.

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