CME Group (Nasdaq: CME) and CMDX have signed agreements with Markit, a financial information services company, to license Markit's industry-leading credit default swap indices and its Markit RED (Reference Entity Database) identifiers.
All agreements with Markit are effective immediately.
CME Group will offer clearing of credit default swaps based upon the Markit CDX and Markit iTraxx indices, the two highest-volume families of CDS indices. Markit CDX indices cover North America and Emerging Markets, while Markit iTraxx indices cover Europe and the Asia-Pacific region. Market participants use Markit's CDS indices to hedge credit risks and/or express a credit view on a basket of reference entities.
The licensing agreements with Markit will allow Markit RED users to identify their single name CDS trades and reference entities on the CME Clearing and CMDX platforms, facilitating participants' migration of new and existing CDS contracts to CME Clearing. CMDX is an open-architecture electronic trading, trade booking, and migration/clearing-only platform for credit default swaps open to all qualified commercial market participants. Trades executed, booked or migrated through CMDX are processed directly to CME Clearing for multilateral netting and centralized clearing.
The Commodities Futures Trading Commission and the Federal Reserve Bank of New York completed their pre-launch reviews of the CMDX platform and CME Clearing on December 23, 2008.