ICE Trust Launches Customer Solution for CDS Clearing

IntercontinentalExchange (ICE), an operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that ICE Trust US has begun clearing credit default swap (CDS) contracts for buy-side market participants after receiving US regulatory approval. Twelve clearing members and 10 buy-side firms successfully participated in the pre-launch testing and the related preparations in advance of the launch.

Dirk Pruis, president of ICE Trust, said: “We are pleased to have expanded the important benefits of clearing to the CDS market more broadly and we appreciate the industry’s contribution to this initiative. The collaboration of the buy-side and dealer community played a key role in the successful development and launch of customer clearing. ICE Trust has also worked closely with multiple US regulatory agencies to bring this facility for the reduction of systemic risk, increased transparency and safety to these vital markets. Customers will benefit from ICE’s tested clearing model, global clearing presence and scale. Our customers value our experience clearing OTC markets, in addition to our industry-leading risk management model, strong independent governance and the world’s largest default fund.”

Developed in conjunction with global buy-side participants and dealers, the buy-side framework introduces trade-date clearing to the CDS market for the first time, as well as providing for segregation of customer funds and enhanced position and margin portability. The open model permits firms to retain important trading and contractual relationships including accepting transactions from a range of competitive existing execution models. In addition, ICE Link provides the infrastructure for connecting the major dealers, inter-dealer brokers and over 400 buy-side firms and enabling product standardisation and post-trade processing.


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