Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that the application and rulebook of ICE Clear Credit to expand its current registered clearing agency designation to add U.S. Treasury clearing has been published by the U.S. Securities and Exchange Commission (SEC). This publication is a key step in the regulatory approval process needed for the company’s plans to launch a U.S. Treasury clearing service. Subject to regulatory approval, ICE Clear Credit plans to launch its Treasury clearing service later this year, which will give the market an opportunity to voluntarily clear for a period before the mandate goes into effect.
“We’re thrilled to see this next milestone as we work to familiarize customers with our plans to launch a Treasury clearing service later this year,” said Paul Hamill, Chief Commercial Officer of ICE Clear Credit. “The rulebook underpins our access model, allowing customers to clear U.S. Treasury securities the same trusted way Credit Default Swap (CDS) products are currently cleared. This model allows us to leverage the industry-accepted tools we already have in place, such as ICE Link, for trade matching, porting and connectivity across platforms.”
ICE’s proposed service will leverage its leading global clearing house, ICE Clear Credit, which currently clears CDS instruments, to offer clearing for U.S. Treasury securities and repurchasing agreements. The Treasury clearing service is being established as a distinct offering from the current CDS clearing service with a separate rulebook, membership, risk management framework, financial and liquidity resources, and risk committee.
ICE’s Treasury clearing solution will allow for both ‘Done Away’and ‘Done With’ implementation, which allows market participants to choose their preferred clearing method. This is the same process that is used daily to trade and clear financial products through ICE’s global clearing houses.
“By leveraging our experience to establish and operate ICE Clear Credit, as well as several other exchanges and clearing houses, we’ve been able to expediently develop a robust and flexible solution that will provide market participants with the ability to clear U.S. Treasury securities in a trusted and capital efficient environment,” said Stan Ivanov, President of ICE Clear Credit. “ICE Clear Credit has become the leading global clearing house for credit derivatives, and we believe our newly developed clearing offering will provide a solid foundation to support the risk management needs of participants throughout the Treasury market.”
ICE Clear Credit, launched by ICE in 2009 to bring centralized clearing to the CDS market, enables clearing of more than 670 Single Name, Index, and Index Option CDS instruments referencing corporate and sovereign debt. ICE Clear Credit clearing has reduced counterparty risk exposure for parties to trades with a combined notional amount of over $385 trillion, with current open interest at ICE Clear Credit over $2 trillion. ICE Clear Credit has been designated a systemically important financial market utility (SIFMU) by the Financial Stability Oversight Council, and is a qualified central counterparty under U.S. bank capital rules.
For more information about ICE’s proposed U.S. Treasury clearing service, please visit: https://www.ice.com/clear-credit/us-treasury-clearing.
