ICE Clear Europe has launched clearing services for single-name credit default swap (CDS) contracts after receiving regulatory approval in the UK. The company has also announced that BNP Paribas and Nomura have been approved as CDS clearing members of ICE Clear Europe.
The company has developed a proprietary risk assessment methodology for single-name CDS contracts. The risk assessment methodology is to determine initial margin, variation margin and guaranty fund requirements. The customized risk management model, together with ICE’s process utilizes executable pricing to provide the daily settlement prices of single-name contracts.
Paul Swann, president of ICE Clear Europe, said: “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.”
