CME to close NEX Regulatory Reporting and TR services
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CME to close NEX Regulatory Reporting and TR services 15 May 2020Chicago Reporter: Drew Nicol
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CME has confirmed plans to wind down Abide Financial and NEX Regulatory Reporting and its European and Australian trade repositories (TR) by 30 November.
A spokesperson for CME tells SLT that the decision to close the reporting hub鈥檚 doors came 鈥渇ollowing an evaluation of our business portfolio after the acquisition of NEX Group in November 2018鈥�.
CME will retain the US (CFTC) swap data repository and Canadian trade repository services.
鈥淒uring the coming months, CME Group will work closely with all clients and regulators to ensure a smooth transition and an orderly wind-down of the impacted services,鈥� the spokesperson adds.
NEX Regulatory Reporting was licenced to operate as a TR under the European Markets Infrastructure Regulatory.
It applied to act as a TR under the Securities Financing Transactions Regulation in 2017 but withdrew its application in 2019.
Those clients will now be faced with the daunting task of sourcing a new TR and approved reporting mechanism in a few short months before go-live, with all the on-boarding and testing steps this entails.
Commenting on the news of the shutdown, Cappitech says: 鈥淥ver a thousand CME clients will need to find a new TR solution and/or onboard their reporting with a new vendor. Tremendous challenges come with this process including having to port TR data.
鈥淐lients may need to change from the format they are used to using, and work with a new vendor to ensure their previously used reporting processes and technical environments are understood so as to make a swift switch.鈥�
As a whole, CME accounts for 38 percent of global volume market share and processed over 2.5 billion trades in 2017.
CME is also responsible for about 40 percent of global trade reporting volume so the impact on is significant and will involve a shift across the market.
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