ICE Clear Europe Launches Single-Name CDS Clearing; Nomura and BNP Paribas Join as CDS Clearing Members
December 14 2009 - 5:00AM
PR Newswire (US)
LONDON, Dec. 14 /PRNewswire-FirstCall/ -- IntercontinentalExchange®
(NYSE: ICE), a leading operator of regulated global futures
exchanges, clearing houses and over-the-counter (OTC) markets,
announced that ICE Clear Europe has launched clearing services for
single-name credit default swap (CDS) contracts after receiving
regulatory approval in the U.K. The first tranche of single name
CDS references companies in the European utility sector. ICE also
announced that BNP Paribas and Nomura have been approved as CDS
clearing members of ICE Clear Europe and are actively clearing as
of this week. ICE Clear Europe now has 13 CDS clearing members.
(Logo: http://www.newscom.com/cgi-bin/prnh/20090727/CL51999LOGO )
Said Paul Swann, President of ICE Clear Europe: "We are pleased to
announce the successful launch of single name clearing on behalf of
our clearing participants. This capability complements numerous
industry initiatives underway to restructure the market and enables
the reduction of counterparty credit risk. Together these steps
promote the recovery of the CDS markets and the global lending
markets." Single-name CDS instruments reference individual
corporate or sovereign government debt instruments. ICE has
developed a proprietary risk assessment methodology specifically
for single-name CDS contracts. This methodology complements the
risk assessment methodology employed in clearing CDS indexes, in
recognition of the unique risk profile of single-name contracts.
ICE's methodology was reviewed and validated by an independent risk
management consultancy as part of the regulatory approval process.
The risk assessment methodology is relied upon to determine initial
margin, variation margin and guaranty fund requirements. This
customized risk management model, together with ICE's
industry-leading process to utilize executable pricing to provide
the critical daily settlement prices of single-name contracts, is
the cornerstone of its risk management framework. On a global
basis, ICE has cleared over $4.3 trillion in notional value of CDS
indexes and has aggregate open interest of $343 billion. ICE Clear
Europe's CDS clearing commenced in July 2009 with European index
(iTraxx) contracts, and has cleared more than 800 billion euro in
notional. ICE Trust, ICE's U.S. CDS clearing house, launched in
March and has cleared more than $3.1 trillion in notional of North
American index (CDX) contracts to date. CDX and iTraxx indexes
consist of 125 North American companies and 125 European-based
companies, respectively. The single-name reference entities cleared
by ICE are components of these indexes. ICE has established CDS
risk frameworks for ICE Trust and ICE Clear Europe that are
separate from its futures businesses, including separate risk
models, guaranty funds and margin accounts, as well as a
CDS-focused risk management system and an independent governance
structure. Through ICE's CDS clearing services, ICE is providing a
common infrastructure to global CDS market participants within
their respective regulatory jurisdictions, while leveraging the
legal framework, operational and risk management processes,
treasury systems and trade warehousing systems currently in use by
the industry. About IntercontinentalExchange
IntercontinentalExchange® (NYSE:ICE) operates leading regulated
exchanges, trading platforms and clearing houses serving the global
markets for agricultural, credit, currency, emissions, energy and
equity index markets. ICE Futures Europe® hosts trade in half of
the world's crude and refined oil futures. ICE Futures U.S.® and
ICE Futures Canada® list agricultural, currency and Russell Index
markets. ICE offers trade execution and processing for the credit
derivatives markets through Creditex and ICE Link(TM),
respectively, and CDS clearing through ICE Trust(TM) and ICE Clear
Europe®. A component of the Russell 1000® and S&P 500 indexes,
ICE® serves customers in more than 50 countries and is
headquartered in Atlanta, with offices in New York, London,
Chicago, Winnipeg, Calgary, Houston and Singapore.
http://www.theice.com/ Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995 - Statements in this press
release regarding IntercontinentalExchange's business that are not
historical facts are "forward-looking statements" that involve
risks and uncertainties. For a discussion of additional risks and
uncertainties, which could cause actual results to differ from
those contained in the forward-looking statements, see ICE's
Securities and Exchange Commission (SEC) filings, including, but
not limited to, the risk factors in ICE's Annual Report on Form
10-K for the year ended December 31, 2008, as filed with the SEC on
February 11, 2009. Editors Note: About Nomura Nomura is a leading
financial services group and the preeminent Asian-based investment
bank with worldwide reach. Nomura provides a broad range of
innovative solutions tailored to the specific requirements of
individual, institutional, corporate and government clients through
an international network in over 30 countries. Based in Tokyo and
with regional headquarters in Hong Kong, London, and New York,
Nomura employs about 26,000 staff worldwide. Nomura's unique
understanding of Asia enables the company to make a difference for
clients through five business divisions: retail, global markets,
investment banking, merchant banking, and asset management. For
further information about Nomura, please visit
http://www.nomura.com/. About BNP Paribas BNP Paribas
(http://www.bnpparibas.com/) is one of the 6 strongest banks in the
world according to Standard & Poor's*. With a presence in 85
countries and more than 205,000 employees, 165,200 of which in
Europe, BNP Paribas is a global-scale European leader in financial
services. It holds key positions in its three activities: Retail
banking, Investment Solutions and Corporate & Investment
Banking. The Group benefits from its four domestic markets:
Belgium, France, Italy and Luxembourg. BNP Paribas also has a
significant presence in the United States and strong positions in
Asia and the emerging markets. * Within its peer group
http://www.newscom.com/cgi-bin/prnh/20090727/CL51999LOGODATASOURCE:
IntercontinentalExchange CONTACT: Kelly Loeffler, VP, Investor
Relations & Corp. Communications, IntercontinentalExchange,
+1-770-857-4726, , or Sarah Stashak, Director, Investor &
Public Relations, IntercontinentalExchange, +1-770-857-0340, Web
Site: http://www.theice.com/
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