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CME Group to Tap Xignite's On Demand Platform for Delivery of OTC Derivatives Data

CME plans to deliver new OTC data services, initially focusing on credit default swaps and energy products, via the on-demand platform.

Today, CME Group is announcing the selection of an on-demand market data distribution platform in partnership with Xignite Inc. to launch new over-the-counter (OTC) derivatives data offerings.

CME is announcing the partnership with Xignite, and expects to launch the new on-demand OTC data offerings in Q3 in the September-to- October time frame.

“The on-demand data services that we’re launching with Xignite are primarily going to focus on intraday transactional data that doesn’t have the time sensitivity that our exchange listed products do,” according to Brian McElligott, managing director of information products at Chicago-based CME Group, in an interview with Wall Street & Technology on Monday.

According to McElligott, the OnDemand platform is an addition to CME’s more traditional market data platform known as MDP, which is an ultra-low latency, highly scalable platform to which customers connect for the exchange-listed data feeds. Today, CME, operator of the CME, CBOT and NYMEX derivatives exchanges and CME Clearing, sends out settlement data that’s available over MDP or via files on its web site. “This would provide an alternative way to get that data out there in a more flexible manner,” said McElligott.

Initially, CME plans to use the Xignite OnDemand platform to make OTC derivatives data available. “Our initial focus is going to be on some of the energy data and our CDS initiatives which is in early pilot stage now,” said McElligott, referring to CME Clearing’s recent offering of central counterparty clearing services for credit default swaps.

The new service could include end-of-day or OTC settlement files as well as volume and open interest data to support markets available through CME ClearPort, a set of clearing services open to OTC market participants. CME ClearPort currently clears more than 500,000 contracts daily including credit default swaps (CDS), energy, metals, agricultural commodities and foreign currents, noted the release.

CME has other OTC initiatives underway or in development around interest rate swaps and foreign exchange. Once data is available in these asset classes, “then Xignite could certainly be the primary delivery platform for that data,” said McElligott.

CME is announcing the new OTC on-delivery platform for OTC data services at the same time that it’s making a push into the OTC derivatives clearing business. The new service will increase transparency into these instruments. “It is definitely the impetus for us,” confirmed McElligott, but he said that over time, the on-demand service can be scaled and leveraged for other data sets it might want to commercialize. But first and foremost, we view this as a flexible tool that will enable us to get OTC demand into the marketplace,” said McEllligott,

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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