IDX Capital Press Releases

IDX Press Release:

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3.24.2009

IDX Capital Open Letter to the SEC Regarding Credit Derivatives Reform, Regulation and Transparency

New York, NY - IDX Capital, a market leader in electronic trading of credit default swaps, announced today that it has submitted a petition to the SEC regarding central clearing and regulation of credit derivatives. Industry spokesman and IDX Capital CEO Jamie Cawley wrote the letter and commented "we have been an outspoken proponent of regulatory oversight and execution transparency since our founding in 2006. We strongly support the SEC's recent efforts to promote central counterparty clearing of credit default swaps."

Cawley's letter was in response to the SEC's File Number S7-02-09, "Temporary Exemptions for Eligible Credit Default Swaps to Facilitate Operation of Central Counterparties to Clear and Settle Credit Default Swaps." The SEC File can be viewed at http://www.sec.gov/rules/interim-final-temp.shtml and the IDX letter is available for download at http://www.idxcap.com.

"From public outcry over compensation in AIG's Financial Products Group to calls for legislative action in Washington to recent efforts to open clearinghouses for CDS, the message is clear: we must reform the way credit derivatives are traded and we must do it now," states the IDX chief executive. "I call on other market participants to embrace a dialogue with regulators and at the same time, to embrace the electronification of this asset class so that we can prevent future events that threaten systemic risk." The firm's proprietary technology platform, IDX Live, is an order driven, java-based electronic trading platform with full straight through processing (STP) capabilities and a transparent order book.

Cawley's letter expounds on the need for transparency in the credit derivatives asset classes as well as the benefits of openness and fair dealing. He explains how the current market structure of bilateral counterparty risk relationships is dangerous as highlighted by the corporate and counterparty defaults of late 2008. This can be ameliorated by the deployment and-more importantly-the adoption of central counterparties (CCPs) that are open for market participants across the spectrum regardless of size, according to IDX.

Launched in late 2005, IDX Capital, LLC is an independent, rapidly growing electronic interdealer broker of credit default swaps matching buyers and sellers for a fee. IDX Capital has been a long time pioneer of electronic trading, transparency and market-stabilizing initiatives in the credit default swaps space.

To view the IDX Letter to the SEC, click:
http://www.idxcap.com/090218_SEC_Letter.pdf