Comment Text:
IntercontinentalExchange, Inc. (“ICE”) and ICE Clear Credit LLC (“ICC”) appreciate the opportunity to respond to the Commodity Futures Trading Commission (“CFTC”) request for public comment upon ICC’s Request for an Order Permitting Portfolio Margining of Commodity-Based Swaps and Security-Based Swaps in a Customer Account (the “Request”).
ICC carefully analyzed both the 4d(f) and 15c3 accounts and related rules and determined that maintaining single-customer accounts for Index CDS and correlated Single-name CDS in a 4d(f) account provides more certainty and protection to customers than if such positions and margin are held in a 15c3 account in the event of a BD/FCM bankruptcy. ICC worked closely with customers who expressed that portfolio margining Index CDS and Single-name CDS positions in the 4d(f) account provided the most desirable solution and received no indication from customers that a choice to also combine Index CDS and Single-name CDS in a 15c3 securities account was desired. Furthermore, maintaining two separate “choice” regimes would be overly burdensome to ICC and its BD/FCM clearing participants from a cost and operationally perspective and would lead to confusion and uncertainty in the event of a BD/FCM bankruptcy.
