ICE Clear Credit, a division of IntercontinentalExchange, will begin clearing Latin American sovereign credit default swaps (CDS) this month, making it the first central counterparty to clear sovereign CDS.
As the primary regulator for single-name CDS, the SEC has granted regulatory approval for clearing of sovereign CDS of Argentina, Brazil, Mexico and Venezuela. Clearing will launch for Brazil and Mexico October 31, and clearing in Argentina and Venezuela is expected in the subsequent weeks.
“Sovereign CDS are some of the most actively traded CDS products today, says Christopher Edmonds, president of ICE Clear Credit. We are pleased to extend our clearing capabilities to sovereign CDS, which furthers our objective of meeting the needs of market participants and reducing systemic risk.
ICE Clear Credit, the world’s first CDS clearing house, was established in March 2009. Together with ICE Clear Europe, ICE Clear Credit brings a common infrastructure to global CDS market participants within their respective regulatory jurisdictions, while leveraging clearing systems and risk management processes already in use by the industry.
(CG)