Citadel, CME Plan CDS Marketplace, Clearing Facility

Oct 8 2008 | 4:00am ET

Hedge fund giant Citadel Investment Group is teaming up with the Chicago Mercantile Exchange to launch an electronic credit derivatives market with a central counterparty clearing facility.

The joint venture between Citadel and the CME Group, both based in Chicago, comes ahead of the debut of a central clearing house for credit default swaps planned by The Clearing Corporation. The Federal Reserve met with industry participants in New York yesterday to discuss a central clearing facility.

“It is imperative to bring stability and transparency to the CDS market,” Citadel CEO Kenneth Griffin said. The Citadel-CME venture will “reduce much of the systematic risk inherent in the current CDS market structure.”

The marketplace and clearing house is expected to launch within 30 days. Citadel and the CME have invited banks and hedge funds to become founding members of the exchange, offering equity stakes in it of as much as 30%.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of