Ten Banks Sign On As Initial Clearing Members Of ICE Trust

Ten major banks have signed on as initial clearing members of IntercontinentalExchange Inc.'s (ICE) new clearinghouse for credit default swaps.

The dealers onboard include Bank of America (BAC), Barclays Capital (BCS), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), J.P. Morgan (JPM), Merrill Lynch, Morgan Stanley (MS) and UBS AG (UBS).

Each has contributed to the guaranty fund and completed "rigorous technical testing" in recent months, according to a news release from ICE.

The exchange secured support from the banks as part of its acquisition of The Clearing Corp., a clearing firm owned by a bank-led consortium.

The deal was announced in late October and closed Friday, according to ICE. Terms included a $39 million cash payment from ICE and a 50% profit-sharing arrangement in ICE Trust, as the new clearing entity is known.

Atlanta-based ICE tapped Dirk Pruis as president of ICE Trust.

Pruis previously headed a securities lending consortium called EquiLend and has also overseen global bank relations and market infrastructure in Goldman Sachs' operations division.

ICE is among several exchanges looking to clear credit derivatives trades in the U.S.; Chicago-based CME Group Inc. (CME) and NYSE Euronext (NYX) have their own efforts in the offing.

-By Jacob Bunge, Dow Jones Newswires; [phone]; [e-mail]