Intercontinental Exchange has cemented its position as the
front runner in providing central counterparty (CCP) clearing
for credit default swaps. In mid-September ICE revealed its US
and European clearing houses had cleared more than 30,000
contracts worth $2.45tr. It also announced that BNP Paribas had
joined as its 13th member in the US.
However, ICE’s chief European rival, Eurex,
insisted that the race for CDS clearing was far from over.
ICE Trust US had cleared 24,000 contracts with a notional
value of $2tr since launching in March, while ICE Clear Europe
had processed 6,000 transactions totalling Eu313bn ($447bn)
since its launch in July.
ICE Trust and ICE Clear Europe offer for clearing 20 North
American CDX index contracts and 12 European iTraxx contracts,
respectively. The exchange expects to begin clearing single
name CDS contracts soon.
In North America, ICE still has no active rival –
CME intends to clear CDS but has not begun doing so.
Meanwhile, by early September Eurex had processed just 10
European transactions since its inception at the end of July,
worth a total of Eu90m. Unlike ICE, Eurex has cleared four
single name CDS transactions as well as index deals.
Despite ICE’s apparent dominance, John Gammer,
vice-president and head of clearing sales at Eurex, said the
battle for supremacy was far from over.
"I think it’s far too early to say who is going
to win that race," he argued, in response to suggestions that
ICE’s early lead meant victory was all but
Some market participants have suggested that ICE was the
favourite to emerge as the dominant CDS clearing house, on both
sides of the Atlantic, because it had successfully lured the
leading CDS dealers to clear trades through its system.
However, Brendan Bradley, global head of product strategy at
Eurex, rejected the notion that the "major broker-dealers" had
chosen ICE as their preferred solution.
He said 14 market participants were readying themselves to
clear CDS contracts at Eurex, and that it was likely the big
dealers would be active on more than just ICE’s
Eurex, which has said it would offer up to 90% of the equity
in the CDS clearing platform to market participants, said
dialogue with interested parties was continuing but would not
reveal their identities.
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