Ice to compete with CME and LCH.Clearnet on FX clearing

The IntercontinentalExchange (Ice) plans to launch a clearing service for over-the-counter foreign exchange instruments this year, putting it head to head with rivals CME Group and LCH.Clearnet.

The platform will initially cover non-deliverable forwards (NDFs), and is scheduled for launch in the second quarter, having been in development for about 18 months.

“We have spent about a year-and-half putting this service together, and we wanted to wait to announce until we knew we would have a differentiated offering that would be able to compete vigorously for OTC foreign exchange clearing. Ice is already a leader in clearing OTC derivatives in two major asset classes – credit and energy – and our hope is that foreign exchange will be the third,” says Thomas Farley, president of Ice Futures US in New York.

The clearer has already signed up 10 clearing members, including Bank of America Merrill Lynch, Citi, Credit Suisse, Deutsche Bank, JP Morgan, Morgan Stanley and UBS. Clients of clearing members will also be able to clear NDFs from launch – a differentiating factor from other platforms, Farley claims.

“The way we have differentiated this offering is, first and foremost, by having a wide array of clearing members supporting the initiative from the start, so customers will have a choice of clearing member. Another differentiator is that we will have client clearing and dealer clearing from day one,” says Farley.

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