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Chicago exchange CME Group files suit against CFTC

The CME Group, a Chicago exchange, filed suit against the Commodity Futures Trading Commission last week over Dodd-Frank rules that are designed to reduce risk in the derivatives trading market.

Though the CME will get new business under Dodd-Frank because the legislation requires previously unregulated trades to be pushed through central clearinghouses, the firm has taken issue with new reporting requirements, DealBook reports.

Under the rules, the CME will be required to report data pertaining to trades to swap data repositories, which will release the information to federal financial regulators.

The CME said in the filing that while Dodd-Frank requires firms to make swap data public, it does not explicitly require that firms release the information to data repositories. The firm said that the rules “would impose costly, cumbersome and duplicative requirements,” adding that the reporting process is “wholly redundant and does not justify the costs incurred,” according to DealBook.

In June, the CME applied to become a swap data repository, though it was unclear how the exchange would publicly release the data. The CFTC ordered that the CME release real-time swap data as opposed to brief website posts.

The lawsuit provides the CME with a bargaining chip in regards to its request because the CFTC could choose to either fight the lawsuit or simply approve the firm’s application, DealBook reports.

The CME’s lawsuit is the third Dodd-Frank-related lawsuit brought against the CFTC. A federal judge struck down the CFTC’s position-limits rule, returning it to the commission to be considered under “further proceedings.”

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