Well, this is surprising:
CME Group Inc. (CME) is in advanced discussions with six dealers to take equity stakes in its credit-default swap trading and clearing platform, as it lines up against a rival backed by nine of the market's largest participants. The expected deal flow would help the exchange regain momentum in the looming battle to clear trades in the $33 trillion CDS market after IntercontinentalExchange Inc. (ICE) effectively took over a bank-backed effort to process the swaps. ... Three major credit-derivatives dealers, along with Citadel's own CDS business, are "all that's initially needed for sufficient volume," said Thomas Miglis, senior managing director of information technology at Citadel. He added that as many as six banks may be onboard at the time of launch; some of these dealers are also backing the ICE venture.Miglis doesn't say which dealers are supposedly now backing both ICE and CME, so I'll reserve judgment. Also of note:
swaps on countries and mortgage bonds won't be supported [on CME's platform].Maybe ICE and CME really are content to split the CDS market, with CME clearing plain-vanilla single-name and index CDS, and ICE essentially continuing the current highly-customized (bespoke) over-the-counter CDS market, only now with a central clearing party. However, I kind of doubt the Fourteen Families (i.e., the big CDS dealers) would cede their iron grip on the CDS market to CME so easily, especially after going to such lengths to assemble ICE, The Clearing Corporation, and Creditex.