CFTC Approves OTC Agricultural Swaps On ICE Clear
December 15 2008 - 10:49AM
Dow Jones News
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
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.