WASHINGTON — The director of trading and markets for the Securities and Exchange Commission said Thursday his agency hopes to approve exemptions to help pave the way for centralized clearing of credit-default swaps by mid-December.
Both CME Group Inc. and the IntercontinentalExchange Inc. are currently in the process of developing clearing platforms for credit-default swaps and they have applied to the SEC for an exemption from certain securities laws.
On Thursday, Erik Sirri, the director of the division of trading and markets, said the applications are on track toward approval and he expects the agency to sign off on the applications by mid-December.
That will help pave the way toward getting centralized clearing houses for credit-default swaps up and running.
The SEC will not be the primary regulator for either clearing house, regulators indicated in testimony Thursday.
The U.S. Commodity Futures Trading Commission will oversee the CME's platform, while the Federal Reserve would regulator ICE's platform.
Sirri said he believes that credit-default swaps are in fact securities, which is why both groups must apply for an exemption. But he noted that the CFTC and the Fed will serve as primary regulators because of the way the clearing houses are structured.