UPDATE 1-ICE says will takes gold as collateral

* ICE Clear Europe to accept gold from Nov. 22

* LCH.Clearnet says considering gold as collateral

(Updates throughout, adds details, background)

LONDON, Nov 11 (Reuters) - ICE Clear Europe has said it will accept gold bullion as collateral from Nov. 22 this year, as volatility picks up across the financial markets.

The company clears energy cash and futures transactions as well as European credit default swaps and is owned by exchange operator InterContinental Exchange ICE.N.

“Acceptable collateral for ICE Clear Europe currently includes cash and government securities. Gold bullion will be permitted for initial margin only and will be accepted by the clearing house by electronic transfer in increments of 1 troy ounce, and will be priced daily using the London gold fixing price in U.S. dollars,” InterContinental Exchange said in a statement dated Nov. 8.

Clearers collect cash or other assets in the form of collateral, or margin, on individual trades and default fund contributions, which they hold centrally to refund members left out of pocket in the event of a default.

Gold, which investors often resort to as a store of value in times of wider market turbulence, has gained prominence in the financial system this year, particularly when it emerged in July the Bank for International Settlements had taken on 346 tonnes of bullion, roughly xx percent of global investment demand, in swap operations. [ID:nLDE66F13E]


Rival clearer LCH.Clearnet said it has considered accepting gold as collateral for some time, although the London-based company has no timeframe yet in which to do so, a spokeswoman said on Thursday.

“In my understanding ... it’s something we’ve been looking at and yes, from a risk perspective, it’s something we are considering,” Andrea Schlaepfer, a spokeswoman for LCH.Clearnet said, adding she did not have any firm dates or further details on such plans.

CME Group CME.O, which owns the COMEX exchange, said late on Tuesday it will increase the margin required to trade silver futures <0#SI:> by 30 percent to $6,500 per 5,000-ounce contract, prompting an 8-drop in the most-active December silver futures contract at one point on Wednesday. [ID:nN0999567] [GOL/]

LCH.Clearnet, which is also the clearing house for the Euronext.liffe commodities exchange, on Tuesday said it will increase the margin required to trade Irish sovereign debt by 15 percent as of Thursday.

Spot gold prices in London XAU= were up nearly 0.6 percent on the day at $1,411.05 an ounce, but down from Tuesday's record high at $1,424.10.

Reporting by Amanda Cooper; Editing by William Hardy