ICE Trust was launched by Atlanta-based IntercontinentalExchange (ICE) in March this year as a central counterparty for credit derivatives products. ICE Trust is the first and only clearing house to process US credit default swaps.
In its first six months of operation, ICE Trust cleared $1.9 trillion in notional value across 22,000 transactions. Having acquired interdealer broker Creditex in August 2008 and The Clearing Corporation in October 2008, ICE was able to employ clearing, CDS and risk management expertise in building the clearing house.
ICE Trust’s risk management system aims to contribute to a transparent and capital efficient market by segregating cleared CDS positions from other asset classes. ICE Trust’s guarantee fund of roughly $2 billion is larger than any other dedicated to a single asset class.
Currently ICE Trust has 13 clearing members, and is planning to expand into clearing for single-name CDS instruments, as well as provide buy-side access to the clearing house. Membership of ICE Trust is open to all qualifying buy-side and sell-side institutions that meet the strict financial and eligibility standards required by clearing houses.
Additionally, ICE met the European Commission’s July 31 deadline for clearing credit derivatives with the launch of Ice Clear Europe.
With its purchase of Creditex, ICE acquired CDS trade affirmation platform, T-Zero. Now known as ICE Link, the platform is directly connected to most major CDS dealers, nearly 400 buy-side customers, and the Depository Trust & Clearing Corporation, as well as ICE Trust. ICE Link allows for same-day processing of CDS affirmation, and novation consent for any connected party.