ICE to cease CDS clearing in London in March 2023

ICE said its Chicago CDS clearing house already has permission from the EU to clear for customers from the bloc, meaning any move to cut off London won't disrupt its CDS clearing.

Intercontinental Exchange said on Thursday it would stop clearing credit default swaps in London next year and shift the activity to Chicago, helping to shield itself from any rupture from the European Union. The departure of clearing will stoke concerns that London needs to do more to keep its global appeal as a financial center after being largely cut off from the EU since Brexit.

"We will be consolidating our CDS clearing services into ICE Clear Credit in Chicago from the end of March 2023," ICE said in a statement, confirming a Reuters report in March. ICE, which runs the New York Stock Exchange and a derivatives trading platform in London, says it clears about 95% of all CDS across the world, contracts that insure against the bonds of companies defaulting.

Some 82% of CDS clearing at ICE is already based in Chicago, with about 12% in London, it said. Clearing houses in London, such as ICE and London Stock Exchange's LCH unit, have been allowed to continue serving customers in the EU until June 2025.

Brussels has said that period won't be extended as it seeks to build clearing capacity inside the bloc. ICE said its Chicago CDS clearing house already has permission from the EU to clear for customers from the bloc, meaning any move to cut off London won't disrupt its CDS clearing.