Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced it will leverage its proven track record and expertise in central clearing and the fixed income market to launch a clearing service for all U.S. Treasury securities and repurchasing agreements. This follows the recent announcement by the U.S. Securities and Exchange Commission (SEC) mandating for the expansion of U.S. Treasury securities clearing to enhance resilience in the market.
ICE operates many of the largest clearing houses globally and brings decades of experience in clearing products ranging from interest rates, energy, agricultural and equity derivative futures and options, as well as credit derivatives.
The new Treasury clearing service will leverage ICE’s existing clearing house, ICE Clear Credit, which is the leading global clearing house for credit default swaps (CDS). The Treasury clearing service will be established as a distinct offering from the current CDS clearing service, and will have a separate rulebook, membership, risk management framework, financial and liquidity resources, and risk committee.
“Over the last fifteen years, ICE Clear Credit has become the leading global clearing house for credit derivatives, and we believe it is strategically positioned to offer Treasury clearing services that will promote competition and help facilitate the SEC’s policy objective of bringing increased transparency and standardized risk management to the Treasury securities market,” said Stan Ivanov, President of ICE Clear Credit. “The rich experience we’ve developed creating and operating ICE Clear Credit and the work we’ve done to ensure its compliance with all U.S. and foreign regulatory regimes has created a fertile environment for adding Treasury clearing to our suite of credit clearing services.”
ICE Clear Credit was founded during the financial crisis in 2009 to bring confidence and stability to the CDS market. Since then, it has become the leading global clearing house for credit derivatives, including Single Name and Index CDS instruments, and options on index CDS. ICE Clear Credit offers clearing for more than 650 Single Name and Index CDS instruments referencing corporate and sovereign debt, and has reduced counterparty risk exposure by clearing approximately $200 trillion in two-sided notional amount, with open interest of over $1.75 trillion.
“The history of ICE Clear Credit and the way the team at ICE identified a market need that could benefit from modernization is the core of who we are as a company,” said Chris Edmonds, President of ICE’s Fixed Income and Data Services. “As we look to add Treasury clearing to the breadth of services we offer for fixed income markets, we will leverage the successful playbook we developed in the past to offer an industry-trusted clearing solution along with the front-, middle- and back-office workflows our customers rely on to manage their daily business operations.”
As an SEC-registered Securities Clearing Agency, ICE Clear Credit has years of experience navigating and complying with complex regulatory requirements. Additionally, ICE Clear Credit is designated as a systemically important financial market utility (SIFMU) by the Financial Stability Oversight Council, and deemed a qualified central counterparty (QCCP) under U.S. bank capital rules.
