Huw Jones

LONDON (Reuters] – Two sources in the industry said Wednesday that Intercontinental Exchange (NYSE) was considering moving clearing of gobal market debt contracts away from London.

According to sources, a potential move from Britain to Chicago is under consideration. The source said this could raise concerns about Britain’s post-Brexit involvement in global finance.

Clearing has been a sensitive political topic ever since Britain left EU. Brussels said that UK-based clearing companies such as ICE Clear Europe or the London Stock Exchange’s LCH will no longer be able service customers within the bloc.

EU wants autonomy for clearing, and to end London-based dependence.

ICE is the owner of both London’s Futures Exchange in New York and New York Stock Exchange. It serves as a clearinghouse for credit default swaps contracts. These are used widely by investors and banks to protect against defaulting companies on bonds.

ICE claims it has cleared 95% of the corporate and sovereign CDS markets, with 85% being in Chicago and 10% in London.

According to sources, it asked customers in London to move CDS clearing from London to Chicago to boost efficiency.

Sources said, “The reason they’re asking customers is because it reflects how CDS clearing is done now.”

ICE declined to comment but has been granted EU authorization to trade CDS for EU customers through its Chicago operations.

ICE moved 245 options and futures contracts for North American oil and other liquids trading from London into the United States in February 2018. It also relocated its EU carbon trading business from London to The Netherlands in June 2017.