ICE Trust Withdraws Swaps Clearinghouse Application as CFTC Writes Rules

ICE Trust U.S. LLC, the world’s largest clearinghouse for credit-default swaps, withdrew its application to the U.S. Commodity Futures Trading Commission to be registered as a clearing organization.

ICE Trust, owned by Atlanta-based Intercontinental Exchange Inc., said in a Dec. 23 letter to the CFTC that it was withdrawing its application because of “significant changes” proposed to regulations for derivatives clearing organizations, or DCOs. The proposed rules are required by mid-July under the Dodd-Frank financial-regulation law.

Kelly Loeffler, vice president at Intercontinental Exchange Inc., said in an e-mail that the company “anticipates transitioning to a DCO once final policy is completed.”

The CFTC and Securities and Exchange Commission are leading U.S. efforts to write new regulations for the $583 trillion swaps market, after largely unregulated trades complicated efforts to resolve the 2008 credit crisis. The law aims to boost transparency and reduce risk by moving most swaps to central clearinghouses that help guarantee transactions.

ICE Trust, which is currently regulated by the Federal Reserve and New York State Banking Department, had applied on Nov. 12 with the CFTC to be regulated as a designated clearing organization. ICE Trust has cleared $8.6 trillion of credit- default swaps as of Dec. 10, the company said on its website.

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