Reuters Cites Comment Letter by CHHS Director

In a recent comment letter to one of the nation’s top financial regulatory agencies, CHHS Director Michael Greenberger urged the Commodity Futures Trading Commission (CFTC) to reject ICE Trust U.S. LLC’s (ICE Trust) application to register its credit default swaps (CDS) clearinghouse as a derivatives clearing organization pursuant to the Commodity Exchange Act. Last week, Reuters reported that ICE Trust withdrew its application, and Professor Greenberger’s comment letter was cited in the article.

“ICE Trust has been referred to as a ‘Derivatives Dealers’ Club’ because it is dominated by swap dealers, such as Goldman Sachs, Citigroup Inc, JPMorgan, Credit Suisse Group AG, Bank of America Corp, and other large dealers,” wrote Professor Greenberger in his December 17 comment letter to the CFTC.

ICE Trust, a subsidiary of Intercontinentalexchange Inc., clears 97 percent of all CDSs, making it the largest over-the-counter clearinghouse. However, the Dodd-Frank Act requires ICE Trust to be registered with the CFTC in order to continue to clear CDSs; by withdrawing its application, it implies that ICE Trust is not in compliance with the required core principles for a derivatives clearing organization under the Act. If ICE Trust files its application again in the future, the CFTC will have Professor Greenberger’s comments to support its decision. This is a key point because only four comment letters were submitted to the CFTC on the matter of ICE’s application, and Professor Greenberger’s letter was the only comment letter that provided an independent academic perspective.

Professor Greenberger is an internationally recognized expert on regulation of financial markets. He has testified numerous times on Capitol Hill and before regulatory bodies on critical issues that arose before, during, and after the current economic crisis. Professor Greenberger has written about these issues at length and in many forms, including recent comment letters about rules before the CFTC, the SEC, and the Treasury. Those writings can be found on his website at

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