IntercontinentalExchange Inc. (ICE) plans to begin clearing European credit default swap trades by July through a new entity called ICE Trust Europe, the exchange announced Thursday.

ICE's proposal comes as European regulators call for a Eurozone-based clearing solution for the swaps, which serve as a kind of insurance against corporate defaults and trade in over-the-counter markets.

Atlanta-based ICE welcomed those calls Thursday, saying in a statement that the planned clearinghouse's separate guaranty fund and margin accounts for credit derivatives will help reduce risk in the estimated $30 trillion credit derivatives market.

"Our aim is to improve the soundness and transparency of the CDS markets, regardless of physical or political borders," said Paul Swann, president and chief operating officer of ICE Clear Europe.

ICE Trust Europe will function within ICE Clear Europe, the exchange's European clearing facility that launched in November and is regulated by the U.K. Financial Services Authority.

Deutsche Boerse's (DB1.XE) derivatives unit, Eurex, is also looking to clear CDS trades in Europe, with a platform slated to launch by the end of the first quarter. London-based clearing firm LCH.Clearnet last week announced its own plan to develop a swaps clearinghouse by the end of 2009.

NYSE Euronext (NYX) and LCH.Clearnet currently are partnered in the only functioning CDS clearing platform; that partnership will continue as LCH.Clearnet develops its own platform, according to officials.

However, this effort is based in London, a sticking point for some European regulators who want a Eurozone-based solution.

Earlier Thursday, a group of nine dealer banks voiced their support for central clearing of credit derivatives in a letter to European Commissioner Charlie McCreevy.

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