CME Open Letter to CME Group Customers and Market Participants

CME Group released a letter to its clients, addressing whether customers can continue to use CME ClearPort after October 12, 2012 in the customary manner.    CME Group stated that it will continue to offer the full suite of services currently available.  The gist of the CME’s message is that it calls its products “futures,” not “swaps,” so that its products are not hit by many of the Title VII requirements.

Lofchie Comment:  This is one of a number of new product developments that demonstrates the illogic of a regulatory system that treats fundamentally similar products (futures and swaps) in fundamentally different ways, with swaps being treated as inherently of a higher risk level even when that is not the case.  While this approach to financial regulation is not likely to result in more safety, it will result in an increased number of products that are called futures.

View letter in full here (links externally to CME website).