ICE Expands Clearing for Emerging Market Credit Swaps
Published Date: 5/14/2025
Notice
Summary
ICE Clear Credit LLC wants to start clearing more credit default swap contracts tied to emerging market countries. This change helps traders reduce risks and protect their money without shaking up current safety rules. The new contracts could start clearing soon after approval, making the market safer and smoother for everyone involved.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
ICC will clear Côte d'Ivoire CDS
If you trade or clear credit default swaps (CDS), ICE Clear Credit proposes to add a Standard Emerging Market Sovereign single-name CDS for the Republic of Côte d'Ivoire to the list of contracts it clears. ICC proposes to expand clearing for this new EM contract under Subchapter 26D following Commission approval.
Clearing reduces counterparty risk
ICE Clear Credit says clearing the additional emerging-market CDS will provide market participants the benefits of clearing, including a reduction in counterparty risk and safeguarding of margin assets under the clearinghouse rules. The filing states these benefits arise from bringing the contract into ICC's existing clearing arrangements.
Existing margin and risk rules apply
ICC will apply its existing margin methodology and Guaranty Fund to the additional emerging-market CDS and states that no changes to ICC's Risk Management Framework or other policies and procedures are required for clearing the new contract. ICC believes its current resources and procedures are sufficient.
Available to all ICC participants; timing noted
The filing states the additional Côte d'Ivoire EM Contract would be available to all ICC participants for clearing and that ICC does not expect the change to impose burdens on competition. The Commission will act on the proposed rule change within 45 days of the Federal Register notice or up to 90 days, and written comments must be submitted on or before June 4, 2025.
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