IntercontinentalExchange Inc.'s (ICE) plan to clear credit-default swap trades received the final approval it needed from the Securities and Exchange Commission Friday, paving the way for it to become the first operational clearinghouse for credit-default swaps in the United States.

The company said in a release that its new clearinghouse, dubbed ICE US Trust, will start offering clearing on Monday for credit-default swap index transactions before it branches out to other types of credit-default swap contracts.

The SEC's approval of ICE US Trust, which exempts the clearinghouse from certain securities laws, marks a big step toward the U.S. government's efforts to offer clearing for over-the-counter derivatives like credit-default swaps, which alone make up an estimated $27 trillion market.

"Regulatory approval allows ICE Trust to bring to market the most comprehensive range of credit-default swap clearing and risk management services available today," said Jeffrey C. Sprecher, chairman and chief executive of ICE. "ICE Trust has been designed to further enhance well-functioning credit-default swap markets by reducing counterparty and systemic risks, and increasing transparency and capital efficiency in the CDS markets."

Some critics believe these complex instruments have played a role in the financial crisis. As evidence, they point to the near-collapse of American International Group (AIG), which issued credit-default swaps without having enough collateral to fulfill the provisions in those contracts.

Clearing, regulators believe, will help reduce risks that credit-default swaps pose to financial system and provide regulators with a window into the now opaque market.

"It is critical that we bring increased transparency to credit-default swaps by developing efficient and effective oversight of credit-default swap clearing agencies," said SEC Chairman Mary L. Schapiro.

The SEC's approval of ICE Trust comes just days after the Federal Reserve Board and the antitrust division of the U.S. Department of Justice also approved the plans. ICE Trust is structured as a limited purpose bank and will be overseen primarily by the Fed.

ICE, which is based in Atlanta, is one of three exchange groups angling to clear credit derivatives trades in the United States. Also in the hunt are Chicago-based CME Group Inc. (CME), which has teamed with the hedge fund firm Citadel Investment Group to develop a platform for clearing and trading credit-default swaps, dubbed CMDX.

CME has secured regulatory approval from the Commodity Futures Trading Commission and the Federal Reserve for CMDX, and continues to await an exemption from the SEC. CME officials said Friday that they believe SEC approval of the platform is imminent, and an SEC spokesman said CME's application is "actively being considered."

Meanwhile, in December, NYSE Euronext (NYX) cleared all the regulatory hurdles for a credit-default swap clearinghouse in the United States. It has already launched a clearing platform in the United Kingdom through a partnership with LCH.Clearnet, but its U.S. platform is still in development.

Despite these efforts by the private sector to offer clearinghouses, some lawmakers and regulators still fear the derivatives industry will not use them voluntarily and are pushing for legislation to mandate clearing. In Europe, for instance, where there are no mandates on clearing, NYSE Euronext has struggled to gain volume.

But there are strong indications that ICE's platform will be put to use. Ten banks have already signed on as initial clearing members, including Bank of America (BAC) and its Merrill Lynch unit, Barclays Capital, Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS) and UBS (UBS). Each has contributed to the guaranty fund and completed "rigorous technical testing" in recent months, according to ICE.

ICE said Friday it will fund ICE Trust's operations with $35 million from cash on hand and that it has contributed an initial $10 million to the guaranty fund. This figure is expected to rise to $100 million over the next two years, with the guaranty fund's aggregate size determined by the positions held in the clearinghouse.

ICE also said it had tapped Dirk Pruis to serve as president of its new clearinghouse. Pruis previously served as the head of a securities lending consortium called EquiLend. He also oversaw global bank relations and market infrastructure in Goldman Sachs' operations division. ICE shares, which closed at $60.39 per share Friday, climbed as high as $62 in after-hours trading before heading lower, recently $58.01.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com

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