Credit Market Derivatives Exchange
In March 2009, Citadel and the CME Group announced they had received SEC approval to launch a joint clearing and exchange solution for the $43 trillion credit default swap (CDS) market, called the Credit Market Derivatives Exchange, or CMDX. In addition to improving transparency, the exchange offers immediate confirmation of trades, avoiding the operational risks associated with unconfirmed CDS transactions. In an interview Citadel's Ken Griffin and Craig Donahue, CEO of the CME Group, confirmed that the platform is up and ready and that interest has been high.
Credit default swaps play an important role in a company's risk management procedure, which has made CMDX a compelling solution as institutions seek "transparent, secure and liquid market alternatives,” said CME Group Executive Chairman Terry Duffy. The creation of the exchange was proposed as a solution to one of the many causes of the financial crisis of 2007–2010, as its transparency can provide regulators with immediate access to positions and trading information.
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