January 14, 2013

CFTC Grants Order to ICE Clear Credit Permitting Portfolio Margining of Swaps and Security-Based Swaps in a Cleared Swaps Customer Account

Washington, DC – Today the Commodity Futures Trading Commission issued an order granting a request made by Ice Clear Credit LLC (ICC), a Commission-registered derivatives clearing organization (DCO), pursuant to Section 4d(f) of the Commodity Exchange Act (Act). The order sets forth terms and conditions under which ICC and its clearing members that are dually registered as futures commission merchants and broker-dealers may (1) hold credit default swaps (CDS) and security-based CDS in a cleared swaps customer account subject to Section 4d(f) of the Act; and (2) portfolio margin such CDS and security-based CDS held in the cleared swaps customer account.

The Securities and Exchange Commission (SEC) has issued a complementary exemptive order permitting security-based CDS, which are subject to SEC jurisdiction, to be held outside a securities account and commingled and portfolio margined with CDS in a cleared swaps customer account. ICC clearing members have been allowed to hold and portfolio margin their proprietary CDS and security-based CDS in a single account since November 2011. This order will extend the same level of capital efficiency to the customers of ICC’s clearing members.

Last Updated: January 14, 2013