DTCC slap lawsuit onto 鈥渁nticompetitive鈥� CFTC rules
08 May 2013 New York
Image: Shutterstock
The Depository Trust & Clearing Corporation (DTCC) and the DTCC Data Repository have filed a lawsuit challenging three interrelated actions by US Commodity Futures Trading Commission (CFTC).
The corporation are also asking a federal court to vacate the commission鈥檚 approval of Chicago Mercantile Exchange Rule 1001 and IntercontinentalExchange Rule 211.
DTCC general counsel Larry Thompson said in a statement that the CME and ICE Rules are anticompetitive and undermine the core pro-competitive principles of the Dodd-Frank Act.
鈥淏y approving these rules, CFTC changed its original adherence to the pro-competitive principles of Dodd-Frank and instead sanctioned anticompetitive behavior that allowed these clearing houses to require reporting of cleared swap data to their captive swap data repository (SDR).鈥�
鈥淯nder the threat of a CME lawsuit last fall, the CFTC ignored the Administrative Procedure Act (APA) and the Commodity Exchange Act (CEA) and took action that paved the way for approval of these Rules. The Commission failed to properly consider the anticompetitive effects of Rules 1001 and 211, and did not comply with the legally required administrative or cost-benefit analysis procedures.
These rules, added Thompson, jeopardised the underlying principles of Dodd-Frank, were inconsistent with the commission鈥檚 own regulations, and compromised the ability of regulators and market participants to understand, assess and manage systemic risk.
鈥淒TCC and DDR are market utilities and user-owned cooperatives and have now, after exhausting all regulatory channels, been forced to litigate to protect market participant choice, competition, and transparency and accountability in the global markets.鈥�
The corporation are also asking a federal court to vacate the commission鈥檚 approval of Chicago Mercantile Exchange Rule 1001 and IntercontinentalExchange Rule 211.
DTCC general counsel Larry Thompson said in a statement that the CME and ICE Rules are anticompetitive and undermine the core pro-competitive principles of the Dodd-Frank Act.
鈥淏y approving these rules, CFTC changed its original adherence to the pro-competitive principles of Dodd-Frank and instead sanctioned anticompetitive behavior that allowed these clearing houses to require reporting of cleared swap data to their captive swap data repository (SDR).鈥�
鈥淯nder the threat of a CME lawsuit last fall, the CFTC ignored the Administrative Procedure Act (APA) and the Commodity Exchange Act (CEA) and took action that paved the way for approval of these Rules. The Commission failed to properly consider the anticompetitive effects of Rules 1001 and 211, and did not comply with the legally required administrative or cost-benefit analysis procedures.
These rules, added Thompson, jeopardised the underlying principles of Dodd-Frank, were inconsistent with the commission鈥檚 own regulations, and compromised the ability of regulators and market participants to understand, assess and manage systemic risk.
鈥淒TCC and DDR are market utilities and user-owned cooperatives and have now, after exhausting all regulatory channels, been forced to litigate to protect market participant choice, competition, and transparency and accountability in the global markets.鈥�
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