ICE to establish London clearing house
25 July 2007 | 10558 views | 0
US market operator IntercontinentalExchange (ICE) has disclosed plans to terminate its existing clearing agreements with LCH.Clearnet and establish its own clearing operation in London.
ICE's London-based subsidiary, ICE Futures, has been using LCH.Clearnet's clearing services since October 2003. But the US exchange says it has provided written notice to the London clearing house to terminate the agreements, which are expected to end in 12 months time.
The US exchange has applied to the UK's Financial Services Authority (FSA) for its new clearing operation - ICE Clear Europe - to become a recognised clearing house. Approval is expected to be granted in early 2008, says ICE.
The exchange says ICE Clear Europe will partner with ICE's US clearing house (which it acquired when it bought out The New York Board of Trade earlier this year), to serve its global customer base across the commodities and financial products marketplace, including futures and OTC markets.
Furthermore, the US energy exchange has hired LCH.CLearnet's Paul Swann as president of its European clearing unit. Swann has been at London clearing house for 20 years, where he has held positions including managing director, group risk and managing director, change.
Bob Reid, chairman ICE Futures, will assume the same position at ICE Clear Europe.