ICE Clear Credit

From MarketsWiki
Jump to: navigation, search
ICE wiki logo.jpg

ICE Clear Credit
Headquarters U.S.A.
Key People Stanislav Ivanov, President
Website www.theice.com/clear_credit

ICE Clear Credit is a U.S.-based credit derivatives clearing house. Formerly known as ICE Trust US, the clearing house transitioned to ICE Clear Credit in conjunction with the Dodd-Frank Act in July 2011.[1] ICE Clear Credit is a CFTC-regulated Derivatives Clearing Organization (DCO) and SEC-regulated Securities Clearing Agency (SCA) as required by Dodd-Frank and has been designated a systemically important financial market utility by the Financial Stability Oversight Council.[2]

Membership in ICE Clear Credit is open to all qualifying buy-side and sell-side institutions that meet the financial and eligibility standards set forth in the rules of the clearing house. ICE Clear Credit currently has about 30 clearing members.

Clearing members at launch of the original clearing entity included Bank of America, Barclays Capital, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch, Morgan Stanley and UBS. HSBC and Royal Bank of Scotland joined ICE Trust in May 2009 and BNP Paribas joined in September 2009.

As of December 2018, financial resources held at the clearing house, including margin, clearing member guaranty funds and ICE’s own “skin-in-the-game,” totaled more than $17 billion.

History

In March 2009, ICE Trust became the first clearing house to process credit default swap (CDS) transactions, [3] following ICE's acquisition of the The Clearing Corporation, which provides the management framework, operational processes and clearing infrastructure for ICE Trust and the ICE Clear Europe CDS clearing house.[4] In its first year of operation (through March 5, 2010), ICE Trust cleared $4.3 trillion in gross notional value on more than 55 thousand transactions.[5] ICE Trust commenced operations with North American CDS indexes (CDX) and added single-name CDS in December 2009.

In its first four weeks of operation, ICE Trust cleared more than $70 billion in CDS.[6]

On June 15, 2009 Intercontinental Exchange announced that ICE Trust U.S. had surpassed $1 trillion in cleared CDS since operations began on March 9, 2009.[7]

ICE Trust U.S. began clearing credit default swap contracts for buy-side market participants on December 14, 2009, after receiving U.S. regulatory approval.[8]

On December 21, 2009, ICE Trust U.S. began clearing single-name CDS.[9]

In March 2013, ICE Clear Credit shelved plans to clear single-name credit default swaps for clients of its member firms, as a result of a new SEC policy on portfolio margining under which clients would be able to benefit from risk offsets between cleared index and single-name contracts, but the vast majority would be charged twice the margin calculated by a central counterparty.[10]

In September 2016 ICE Clear Credit was recognized as a third-country central counterparty (CCP) for products regulated by the U.S. CFTC in accordance with the European Market Infrastructure Regulation (EMIR). The European Securities and Markets Authority (ESMA) gave further relief for security-based swaps, which are regulated by the U.S. Securities and Exchange Commission, while they work toward an equivalence determination.[11]

On December 7, 2018, ICE Clear Credit received clearing house status from the Monetary Authority of Singapore (MAS), making it the first global CDS clearing house to be recognized in that country. The move means ICE Clear Credit can now have clearing members from Singapore.[12]

Products and Services

ICE acquired Creditex in August 2008. Creditex operates a hybrid model of voice and electronic execution, and launched electronic trading for CDS in 2004. In addition to its core execution offering, Creditex administers Delta-Neutral Auctions, and with Markit is an official co-administrator of the industry standard ISDA Cash Settlement Auctions.

Key People

References

  1. ICE Trust to Transition to ICE Clear Credit Under Dodd-Frank; FCM/BD Clearing Members Added; Total CDS Cleared by ICE Exceeds $20 Trillion Milestone. ICE Website.
  2. ICE Clear Credit. ICE.
  3. ICE Trust Begins Clearing CDS, Addressing Systemic and Operational Risks. ICE.
  4. ICE Trust Begins Clearing CDS, Addressing Systemic and Operational Risks; Global Banks Begin Transferring Existing Bilateral Trades to ICE Trust. Intercontinental Exchange.
  5. ICE Trust Marks One-Year Anniversary for North American CDS Clearing. Intercontinental Exchange.
  6. ICE Trust Clears $70 Billion in North American CDS Indexes in First Month. Intercontinental Exchange.
  7. ICE Trust Surpasses $1 Trillion CDS Cleared; Weekly Record of $247 Billion Cleared. Intercontinental Exchange.
  8. ICE Trust Successfully Launches Customer Solution for CDS Clearing; Over $4.3 Trillion in CDS Cleared to Date Globally. Intercontinental Exchange.
  9. ICE Trust Announces December 21 Launch for Single-Name CDS Clearing; Sees Twelve Active Firms in First Two Days of Buy-side Clearing. Intercontinental Exchange.
  10. Ice blames SEC as it drops single-name CDS clearing plans. Risk.net.
  11. ICE Clear Credit Recognized as Third-Country Central Counterparty under EMIR. ICE.
  12. ICE Clear Credit gains clearing house status in Singapore. The Trade News.