Washington, D.C., Nov. 14, 2008 — Securities and Exchange Commission Chairman Christopher Cox today executed, on behalf of the SEC, a Memorandum of Understanding with the Federal Reserve Board and the Commodity Futures Trading Commission dealing with central counterparties for over-the-counter credit default swaps.
"The virtually-unregulated over-the-counter market in credit default swaps has played a significant role in the credit crisis, including the now $167 billion taxpayer rescue of AIG," said Chairman Cox. "Bringing transparency to this market is vitally important. The SEC has regulatory and supervisory authorities over the clearing agencies that may be established for credit default swaps, and we will use those authorities to strengthen the market infrastructure and to protect investors."
In addition to the work the SEC has undertaken to improve the oversight and infrastructure for the over-the-counter credit default swaps market, including the execution of today's MOU, Chairman Cox has repeatedly urged the Congress to enact legislation that would bring disclosure and transparency to the CDS market.
The press release issued today by the President's Working Group on Financial Markets can be found here.