The Commodity Futures Trading Commission on Monday cleared the way for ICE Clear U.S. Inc. to clear over-the-counter swap trades on coffee, sugar and cocoa.

Current CFTC rules prohibit the clearing of agricultural swap trades without specific permission from the regulator, though all other OTC swaps are permitted as long as they are done through a regulated clearinghouse.

Monday's CFTC order will also let floor trader and floor broker members of ICE Futures U.S. Inc., a unit of IntercontinentalExchange Inc. (ICE), to qualify as eligible swap participants when entering into OTC swap deals on coffee, sugar and cocoa for their own accounts, according to the CFTC.

ICE, along with Chicago's CME Group Inc. (CME) and Kansas City-based Agora-X LLC, the latter of which is putting together a new electronic trading platform for commodities, have asked the CFTC to let them clear some OTC agricultural swap deals as concern over counterparty credit risk drives more trading onto centrally cleared trading venues.

The same trend is driving a race between CME, ICE, NYSE Euronext (NYX) and Deutsche Boerse's (DB1.XE) derivatives unit, Eurex, to launch platforms for clearing credit default swap trades.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com

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