CME Group Class A Earnings Call Insights: Swap Data and Doubled OTC Clearing

CME Group, Inc. Class A (NASDAQ:CME) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Swap Data

Jillian Miller – BMO Capital Markets: So, there is this contentious issue, I guess, being debated currently on how the SDRs are going to handle swaps data, and you’ve applied for the CFTC to allow you basically to automatically report all the CME cleared swaps automatically through your SDR, but I guess competitors are kind of fighting hard against that. So, maybe you can just run through exactly what you’re hoping to achieve with respect to the swap data, how you might potentially monetize that data and how you think the CFTC is looking at the issue?

Phupinder Gill – CEO: This is Gill. I’ll take a shot at that. I’m sure there will be a lot of folks who want to talk, but ultimately the idea behind us applying approval of this rule is to make it as efficient as possible for our clients is that going to clear a swap at CME and do not do any more work than they have to and reported directly to our own SDR. Like I said a short while ago, it’s straight through processing and at its best. In terms of monetizing the venture that was not a priority for us when we launched the operational efficiencies was the main goal behind what we were doing.

Jillian Miller – BMO Capital Markets: So, is that data something that you would charge for or is it something that you’d just be collecting reporting to a central facility and you wouldn’t be direction keep the market data from it.

Phupinder Gill – CEO: No, we are going to keep the official record of the swap that we clear and we have announced that we will not charge at least for a while.