Atlanta-based IntercontinentalExchange’s (Ice) European central clearing facility, Ice Clear Europe, has cleared €5.9 billion of credit default swap (CDS) index trades in its first week of operation.
The platform launched on July 27 and has processed 141 iTraxx index contracts, resulting in €382.5 million of open interest. Each of its 10 dealer members participated.
The European platform follows in the footsteps of its American counterpart, the New York-based Ice Trust, which has cleared $1.6 trillion of North American index trades since it launched in March.
A competing European venture by the Frankfurt-based derivatives exchange Eurex launched on the same day last week. As of July 31, it had cleared only one trade worth €25 million, referencing series 11 of the iTraxx Europe index.
The European Commission's internal market and services commissioner, Charlie McCreevy – a key figure in the regulatory push for central clearing in Europe – said he was satisfied the Commission’s July 31 deadline for clearing had been met.
“Clearing through central counterparties is the key to improving risk management and to increasing the stability of the financial system. I am pleased that the extraordinary efforts by the industry and service providers have made it possible that two European CCPs are starting to clear these products now,” he remarked.
The International Swaps and Derivatives Association, however, was more circumspect. Chief executive officer Robert Pickel cautioned: “Additional work remains to be done. The industry is engaged in ongoing efforts towards clearing all eligible CDS contracts through a central counterparty.”
A third CDS clearing platform by Chicago-based CME Group and Chicago-based hedge fund Citadel is still waiting for regulatory approval.
More on Credit Derivatives
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