Intercontinental Exchange is betting that the credit default swap market is ready for customers and dealers to come together on a single platform.
In August the exchange introduced an all-to-all central limit order book for single name credit default swaps. The order book, which will rely on trading technology originally developed for dealer-to-dealer trading, will consolidate orders from both buy-side and sell-side market participants, and trades will be routed directly into clearing.
ICE said the new market offers participants the option to remain anonymous or offer “name give-up” execution in the order book, giving them the ability to disclose their identity after the trade is completed. Other features touted by ICE include pre-trade credit checks and direct-to-clearing workflow.
“ICE Swap is the only single name CDS platform offering cleared-only liquidity across the credit spectrum while extending established electronic trading protocols to the entire CDS market,” said Krishan Singh, President of ICE Swap Trade. “We’re pleased that a number of trades have already been executed by both the sell-side and buy-side in the first few days post-launch. We worked closely with a range of participants to optimize our protocols to improve liquidity, transparency and confidence in this important market.”
In related news, ICE announced on July 29 that it has entered an agreement to sell the voice brokerage operations of Creditex, its credit derivatives brokerage subsidiary, to Tullett Prebon. ICE will retain the subsidiary's electronically traded markets and systems, post-trade connectivity platforms and intellectual property.
