Citadel Investment and CME groups will create a joint central counterpary service for OTC credit default swaps, using Citadel’s electronic platform.
The companies have invited some of the biggest names in the CDS market to join as founding members of the new CCP. The system should launch in the next month.
Combining Citadels leading CDS technology with the renowned safety and soundness of CME Clearing, this joint venture is a best-of-both-worlds solution that will reduce much of the systematic risk inherent in the current CDS market structure, said CME Group chairman Terry Duffy in a statement.