Intercontinental Asks SEC to Clear European Sovereign Swaps

Intercontinental Exchange Inc., owner of the world’s largest credit-default swaps clearinghouse, requested permission from the Securities and Exchange Commission to back contracts for sovereign debt of five European countries.

The sovereign debt of Ireland, Italy, Greece, Portugal and Spain would be processed by the company’s ICE Clear Europe unit for the first time, rather than the contracts being held between banks and their customers, in a move that’s meant to reduce systemic risk in the financial industry, according to a regulatory filing today. Intercontinental, based in Atlanta, already backs credit swaps on the sovereign debt of Brazil, Mexico, Argentina and Venezuela as well as the Markit CDX Emerging Markets Index of 15 sovereign nations.