IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today announced it has licensed Markit's North American and European corporate credit default swap (CDS) indices, in order to develop futures and options contracts based on the Markit CDX and Markit iTraxx index families.
ICE operates the two leading CDS clearing houses as well as Creditex, a leading CDS trade execution business. To date, ICE has cleared more than $34 trillion in cumulative gross notional value across 340 CDS instruments through its North American and European clearing houses.
The development of futures referencing CDS indices will create new exchange-traded products to manage corporate credit risk that complements existing CDS markets and provides additional tools to manage risk exposure.
David Goone, Senior Vice President and Chief Strategic Officer, said: "The expansion of the CDS market to futures provides credit market participants with additional tools for managing credit risk exposure. These new products in this asset class follow our successful introduction of clearing in 2009 and we're pleased to work with Markit on this important initiative."
Armins Rusis, Managing Director and Co-Head of Information at Markit, said: "The listing of the Markit CDX and Markit iTraxx Futures is an exciting opportunity for our franchise as a global provider of fixed income indices. With the growing importance of credit as a broad-based asset class and the changing regulatory environment, it is not surprising that an innovative exchange, like ICE, has committed to developing and listing credit index futures. This highlights our focus on helping provide cutting-edge solutions to the marketplace."
ICE expects to launch the futures contracts in the first quarter of 2013. Additional details on trading and clearing CDS futures will be provided as they are finalized. The terms of this transaction were not disclosed.