SEC Sets Rules For Operation Of CDS Clearinghouse

Law360, New York (January 22, 2009, 12:00 AM EST) -- In a step meant to ease the creation of a temporary central clearinghouse for credit default swaps, the U.S. Securities and Exchange Commission on Thursday instituted temporary exemptions of certain classes of credit default swaps.

The SEC said that the exemptions would allow for a central counterparty entity to serve as a third party in eligible credit default swap transactions, serving as a go-between for two parties entering into a CDS contract and shouldering some of the risk.

The commission noted that the creation of a...
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