In November 2010, ICE Trust, a division of the derivatives exchange InterContinental Exchange, filed its application to be a derivatives clearing organization with the Commodity Futures Trading Commission (CFTC), saying later that it had submitted the application to meet compliance more quickly and also to bring in new customers before the new rules of Dodd-Frank took effect. Last week, however, the company withdrew that application with little fanfare.
In mid-December, the CFTC, led by Chairman Gary Gensler (left), approved a rule under which derivatives clearing organizations (DCOs), wouldn't be permitted to set capital requirements on new members above $50 million—significantly lower, a Wall Street Journal article reported, than the existing hurdles.
On Dec. 23, ICE sent a letter to the CFTC in which an attorney for the company said that ICE Trust had had second thoughts due to “significant changes proposed” to regulations for clearing organizations. The rules causing concern are those designed to increase transparency of a market that processes around $600 trillion in credit default swaps (CDS). ICE Trust is the largest clearing house for CDS.