CFTC Grants Approval for CME Group to Handle Some Ag Swaps

March 23, 2009 07:00 PM

Pro Farmer Editors

The Commodity Futures Trading Commission (CFTC) has given regulatory approval for the CME Group to clear corn basis swaps and calendar swaps for corn, wheat and soybeans.

The swaps, which will be subject to comparable rules and regulations for listed corn, wheat and soybean futures contracts on the CBOT, are scheduled to be available beginning Monday, April 6, through CME ClearPort®, an open clearing service for over-the-counter (OTC) products, according to a press release from the CME Group.

In addition, DTN, a division of Telvent, the leading business information services company focused on agricultural, energy and environmental markets, has signed an agreement to be the exclusive provider of daily cash bid prices used to calculate daily settlement prices for the corn basis swap products.

The CFTC issued the following release regarding this matter:

On March 18, 2009, the Commodity Futures Trading Commission issued an Order permitting the Chicago Mercantile Exchange to clear certain bilateral over-the-counter swap transactions involving corn, wheat, and soybeans. The Order was issued pursuant to authority set forth in Section 4(c) of the Commodity Exchange Act (CEA). The Order also permits these cleared swap contracts and associated customer funds to be held in accounts segregated for the benefit of customers pursuant to Section 4d of the CEA.

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