Intercontinental Exchange, an operator of regulated global futures exchanges and over-the-counter (OTC) markets, announced that ICE Clear Europe will create a new service known as ICE Trust Europe.
The new service will serve as a European-regulated central counterparty clearing house for European credit default swap (CDS) transactions. ICE Trust Europe will operate within the existing ICE Clear Europe clearing house which is regulated by the U.K. Financial Services Authority (FSA).
ICE Trust Europe will have a segregated risk pool and dedicated risk management systems for the European credit derivatives market, including a separate guaranty fund and margin accounts. It is expected that the use of ICE Trust Europe will offer efficiency and a common market infrastructure to global CDS market participants.
The new service is expected be launched in the first half of 2009 and, subject to necessary regulatory approvals, will leverage the clearing technology and risk management processes currently in development. ICE Trust Europe is establishing governing rules and operating procedures appropriate for European CDS clearing, including membership and margining requirements.
"We will continue to work with European regulators and the CDS community to construct central clearing and margining systems for this global and vital marketplace," said Paul Swann, president and COO of ICE Clear Europe. "Our aim is to improve the soundness and transparency of the CDS markets, regardless of physical or political borders. We will continue to leverage our domain knowledge in both CDS and clearing as we work with regulators and industry participants to develop a comprehensive European solution."