The ranks of derivative clearing organizations (DCO) registered with the Commodities Futures Trading Commission (CFTC) have been depleted by one.
The CFTC announced that CME Clearing Europe Ltd. (CMECE) was vacating its registration.
An announcement from the CFTC stated:
At the request of CME Clearing Europe Ltd., the U.S. Commodity Futures Trading Commission issued an order today that vacates the registration of CMECE as a derivatives clearing organization effective August 8, 2017.
According to the announcement, CMECE asked the CFTC to rescind its DCO registration on May 10, 2017.
DCOs act as a middlemen in derivative contracts.
“People bring contracts to the clearinghouse and the clearinghouse steps between the buyer and the seller,” explained attorney Jerrold Salzman, speaking on behalf of the CME Group before a House Agriculture Committee hearing in June. “It collects from those who lose and pays to those who win. It manages a matchbook is what we call it.”
CMECE was created in May 2011 to provide clearing services for CME’s European exchanges.
All exchanges registered by the CFTC are required to provide their own clearing services.
The following DCOs are currently registered with the CFTC: Cantor, CME, ICE Clear Credit, ICE Clear Europe, ICE Clear US, LCH, LCH Clearnet, LCH Clearnet SA, Ledger X, Minneapolis Grain Exchange, Natural Gas Exchange, Nodal Clear LLC, NADEX, Options Clearing Corporation, and Singapore Exchange Derivative Clearing Limited.
As The Industry Spread previously noted, last month the CFTC approved Ledger X as a brand new DCO which will clear the way for the first exchange of cryptocurrency options.
No reason was given for the withdrawal, and CMECE have issued no official comment.
An email to Donal McCarthy, public affairs officer of CMECE, remains unanswered.