SEC Lets Clearinghouse Add Profit Given Default Tool
Published Date: 7/21/2026
Notice
Summary
ICE Clear Credit is updating its risk management model to better handle the chance that one default could cause others to fail too. They’re adding a new tool called Profit Given Default (PGD) to help reduce overall risk in credit default swaps. This change affects traders and firms using the CDS clearing service and aims to keep the system safer without changing existing rules, with the update proposed in July 2026.
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
New Profit Given Default (PGD) Tool
If you are a firm that clears credit default swaps at ICE Clear Credit, ICC proposes adding a new calculation called Profit Given Default (PGD) to its contagion risk model. ICC says PGD can recognize potential offsetting gains and may reduce Initial Margin and Guaranty Fund requirements for some Clearing Participants depending on their offsetting positions; ICC observed a very small impact on average across participants. The change was filed July 6, 2026, and would become effective after SEC approval; comments are due August 11, 2026.
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