The Securities and Exchange Commission today took action to help improve transparency in the multi-trillion dollar credit default swap market by approving conditional exemptions that will allow Ice US Trust LLC to operate as a central counterparty for clearing credit default swaps.
"It is critical that we bring increased transparency to credit default swaps by developing efficient and effective oversight of credit default swap clearing agencies," said SEC Chairman Mary L. Schapiro. "These conditional exemptions will help enhance competition in the market for the central clearing of credit default swaps, and ensure greater protections for investors through SEC regulatory oversight of the central counterparty."
In December 2008, the SEC approved temporary exemptions allowing LCH.Clearnet Ltd. to operate as a central counterparty for credit default swaps. The Commission has worked in close consultation with the Board of Governors of the Federal Reserve System and the Commodity Futures Trading Commission, executing a Memorandum of Understanding in November 2008 to lay out a framework related to central counterparties for credit default swaps.
The SEC is soliciting public comment on all aspects of these exemptions to assist in its consideration of any further action that may be needed in this area.