User:Oceanflynn/sandbox/Intercontinental Exchange (references)

IntercontinentalExchange, Inc., NYSE:ICE, is a major "operator of regulated exchanges and clearing houses serving the risk management needs of global markets for agricultural, credit, currency, emissions, energy and equity index products. ICE is headquartered in Atlanta, with offices in New York, London, Chicago, Houston, Winnipeg, Calgary, Washington, D.C. and Singapore. ICE is an exchange for futures and over-the-counter (OTC) energy and commodity contracts as well as derivative financial products. In May 2000, IntercontinentalExchange (ICE) was founded by backed by Jeffrey C. Sprecher and backed by Goldman Sachs, Morgan Stanley, BP, Total, Shell, Deutsche Bank and Societe Generale  who represent some of the world's largest energy traders. The company's stated mission was to transform over-the-counter (OTC) trading by providing an open, accessible, multi-dealer, around-the-clock electronic energy exchange. The new exchange offered the trading community better price transparency, more efficiency, greater liquidity and lower costs than manual trading. While the company's original focus was energy products (crude and refined oil, natural gas, power, and emissions), recent acquisitions have expanded its activity into the "soft" commodities (sugar, cotton and coffee), foreign exchange and equity index futures.

In 2011, ICE and NASDAQ OMX Group joined forces to bid against Deutsche Börse after the latter announced a $9.5 billion deal to merge with NYSE Euronext. The two U.S. bidders and then the German exchange ultimately withdrew after their bids encountered regulatory antitrust resistance. In December 2012 NYSE Euronext agreed to be acquired by ICE pending regulator approval.

On January 18, 2011 IntercontinentalExchange Inc. (NYSE: ICE) and TMX Group (TSX: X), signed an agreement to "add Canadian and U.S. physical and Canadian financial crude oil products to their existing clearing and technology alliance." "Under the terms of the agreement, NGX's Canadian physical crude products will be offered for trading through ICE's electronic trading platform." Imperial Oil Limited (IMO TSX) shares are sold through the Toronto Stock Exchange which is owned by TMX Group (TSX: X). Imperial Oil Limited (IMO TSX) in which US-based ExxonMobil holds the controlling stock of 69.60 percent, is Canada's second-biggest integrated oil company (by market capitalization). Imperial Oil Ltd (IMO.TSX) is best known for its dominant position in the Alberta oil sands.

According to The Times journalists in London, "[R]egulators increasingly regard clearing houses as central to financial stability.

By 2009 there were proposals for OTC reform,

""One of the concerns raised by regulatory bodies is the concentration of CDS trading in only a few dealer institutions in recent years. (Note that the top 10 global banks are involved in 70% of all credit derivatives transactions.) Over time, the use of clearinghouses such as ICE Trust is expected to reduce the volume of settlement payments among members of the clearinghouse and, in theory, reduce counterparty credit risks that arise under CDS. However, trading CDS through clearinghouses may not effectively address concentration risk given that, at least initially, the clearinghouse members will be the major dealers currently involved in most trades. In order to address counterparty risk, members must provide collateral to ICE Trust to cover their obligations under cleared CDS. Members must also make initial and ongoing contributions to a guaranty fund that can be used by ICE Trust in the event of a member default.""

- The Journal of Structured Finance

Products and Services
ICE is organized into three business lines:

ICE Markets
OTC markets, CDS markets and options:

Credit Default Swaps (CDS) By 2002, both the New York Mercantile Exchange and the InterContinental Exchange had introduced clearing solutions for OTC energy derivatives. in 2006 all ICE futures and cleared OTC contracts were processed through London Clearing House (LCH) (LCH.Clearnet), one of the earliest entrants into OTC derivatives clearing, the central clearinghouse (Culp 2010 p. 13).

By 2010, Intercontinental Exchange had cleared more than $10 trillion in credit default swaps (CDS) (Terhune Bloomberg Business Week 2010-07-29) through its subsidiaries, ICE Trust CDS (now ICE Clear Credit) in March 2009 and at ICE Clear Europe in July 2009 in New York, launched in 2008, (which also handles soft commodity futures/options) and ICE Clear Europe Limited in London, UK, launched in July 2009, (which also trades in energy futures) clearing entities for credit default swaps (CDS)(Terhune Bloomberg Business Week 2010-07-29). (CME Group comprises the Chicago Board of Trade and the Chicago Mercantile Exchange, the New York Mercantile Exchange and New York Commodities Exchange). Bloomberg's Terhune (2010) explained how investors seeking high-margin returns use Credit Default Swaps (CDS) to bet against financial instruments owned by other companies and countries. Intercontinental's clearing houses guarantee every transaction between buyer and seller providing a much-needed safety net reducing the impact of a default by spreading the risk. ICE collects on every trade.(Terhune Bloomberg Business Week 2010-07-29). Brookings senior research fellow, Robert E. Litan, cautioned however, "valuable pricing data will not be fully reported, leaving ICE's institutional partners with a huge informational advantage over other traders. He calls ICE Trust [now ICE Clear Credit] "a derivatives dealers' club" in which members make money at the expense of nonmembers (Terhune citing Litan in Bloomberg Business Week 2010-07-29). (Litan Derivatives Dealers’ Club 2010)." Actually, Litan conceded that "some limited progress toward central clearing of CDS has been made in recent months, with CDS contracts between dealers now being cleared centrally primarily through one clearinghouse (ICE Trust) [ICE Trust [now ICE Clear Credit] in which the dealers have a significant financial interest (Litan 2010:6)." However, "as long as ICE Trust [now ICE Clear Credit] has a monopoly in clearing, watch for the dealers to limit the expansion of the products that are centrally cleared, and to create barriers to electronic trading and smaller dealers making competitive markets in cleared products (Litan 2010:8)."

The U.S. Securities and Exchange Commission granted an exemption for IntercontinentalExchange to begin guaranteeing credit-default swaps. The SEC exemption represented the last regulatory approval needed by Atlanta-based Intercontinental. Its larger competitor, CME Group Inc., hasn’t received an SEC exemption, and agency spokesman John Nester said he didn’t know when a decision would be made.

ICE Services
electronic trade confirmations and education.

ICE Data
electronic delivery of market data, including real-time trades, historical prices and daily indices.

Contracts sold through ICE Futures U.S. are processed through a subsidiary, ICE Clear U.S. (ICEUS). In May 2008, ICE launched its own Clearing House, ICE Clear, with divisions for Europe, US, Canada & Trust (ICEU).

History
Jeffrey C. Sprecher, ICE's founder, chairman, and Chief Executive Officer, was "a power plant developer" who spotted a need for a seamless market in the natural gas used to power generators." Sprecher visited Chicago's derivative market, birthplace in the 1970s, to modern financial derivatives, and was amazed at the low-tech "open outcry" trading system still in use in the computer age

In the late 1990s, Jeffrey C. Sprecher, ICE's founder, chairman, and Chief Executive Officer, acquired Continental Power Exchange, Inc. with the objective of developing an Internet-based platform to provide a more transparent and efficient market structure for OTC energy commodity trading.

In a timely response to US financial crisis in 2008, Sprecher formed ICE US Trust based in New York, now called ICE Clear Credit LLC, to serve as a limited-purpose bank, a clearing house for credit default swaps. Sprecher worked closely with the Federal Reserve to serve as its over-the-counter (OTC) derivatives clearing house. The principal backers for ICE US Trust are the same financial institutions most affected by the crisis, the top ten of the world's largest banks (Goldman Sachs, Morgan Stanley, Bank of America, Citi, Credit Suisse, Deutsche Bank, JPMorgan, Merrill Lynch, Morgan Stanley and UBS). Sprecher's clearing house cleared their global credit default swaps (CDS) in exchange for sharing profits with them (Weitzman Financial Times 2008-10-31, Terhune 2010-07-29).

ICE Futures Europe 2001-
In June 2001, ICE expanded its business into futures trading by acquiring the International Petroleum Exchange (IPE), now ICE Futures Europe, which operated Europe's leading open-outcry energy futures exchange. Since 2003, ICE has partnered with the Chicago Climate Exchange (CCX) to host its electronic marketplaces. In April 2005, the entire ICE portfolio of energy futures became fully electronic and ICE closed the high profile and historic trading floor the International Petroleum Exchange.

In April 2010 ICE acquired Climate Exchange PLC for 395 million pounds ($622 million) and European Climate Exchange (ECX) as part of its purchase. Exchange-traded emissions products were first offered by the European Climate Exchange (ECX), which was established in 2005, by listing products on the ICE Futures Europe's trading platform. ICE Futures Europe is the leading market for carbon dioxide (CO2) emissions. ICE's ECX products comply with the requirements of the European Union Emission Trading Scheme.

New York Board of Trade (NYBOT) 2005
ICE became a publicly traded company on November 16, 2005, and was added to the Russell 1000 Index on June 30, 2006. The company expanded rapidly in 2007, acquiring the New York Board of Trade (NYBOT), ChemConnect (a chemical commodity market),.

Chicago Board of Trade Unsuccessful Bid
In March 2007 ICE made an unsuccessful $9.9 billion bid for the Chicago Board of Trade, which was instead acquired by the Chicago Mercantile Exchange.

Winnipeg Commodity Exchange (WCE) 2007 now ICE Futures Canada (2008-
IntercontinentalExchange Inc., the "upstart Atlanta-based energy bourse" purchased the privately held 120-year-old Winnipeg Commodity Exchange, known for its canola futures contract for $40 million. The Winnipeg Commodity Exchange (WCE) as subsidiary of ICE Futures Canada was renamed ICE Futures Canada as of January 1, 2008. (See also ICE Futures U.S.(TM) and ICE Futures Europe(TM). In 2004, the Winnipeg Commodity Exchange had "closed its open-outcry trading floor" becoming "the first North American agricultural futures exchange to trade exclusively on an electronic platform" by trading via the "Chicago Board of Trade's electronic platform, and [using] clearing services from the Kansas City Board of Trade. IntercontinentalExchange converted Winnipeg Commodity Exchange contracts to the IntercontinentalExchange platform. IntercontinentalExchange maintained an office and "small core staff" in Winnipeg, Manitoba. The Manitoba Securities Commission oversee its operations.

TSX Group's Natural Gas Exchange Partnership 2008
In January 2008, ICE partnered with TSX Group's Natural Gas Exchange, expanding their offering to clearing and settlement services for physical OTC natural gas contracts.

ICE Dominates Crude Oil Futures
IN the "long-standing competition between ICE and the CME’s New York Mercantile Exchange for dominance in the multi-billion dollar oil futures trade" Brent's claim as global oil benchmark of most importance benefits ICE. The price of oil futures contracts are set by "futures contracts placed in London's InterContinental Exchange (ICE), which dominates European trading, and the New York Mercantile Exchange (NYMEX), a commodity futures exchange owned and operated by CME Group of Chicago. The majority of North Sea Brent crude oil futures were traded through IntercontinentalExchange (ICE). By November 2012 Brent crude oil continued "to take market share as the global benchmark for oil from WTI (Ratner November 21, 2012) " West Texas Intermediate crude oil]. West Texas Intermediate crude oil is the underlying commodity of Chicago Mercantile Exchange's oil futures contracts. a similar situation is playing out for the exchange operators where this oil is traded. In November 2012 Brent made up "48% of oil futures trading (Ratner November 21, 2012) ". It is traded on CME Group Inc.'s New York Mercantile Exchange. IntercontinentalExchange Inc. continued in 2012 "to take market share from CME with ICE’s crude market share at c. 56% in futures and c. 37% in options."(Ratner November 21, 2012) The potential for ICE to increase its global market share is enhanced by increased Brent’s increased weightings against WTI which occurred for a variety of reasons. Saudi Arabia chose Brent instead of WTI after the financial crisis and WTI is landlocked are two of the factors that affect the Brent/WTI spread increasing WTI's discount.(Ratner November 21, 2012)

It is anticipated the spread will decrease when WTI reached tidewater with the completion of the Cushing-Gulf Coast Seaway pipeline anticipated for 2013.

NYSE Euronext 2013
In February 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Borse, speculation developed that ICE and Nasdaq could mount a counter-bid of their own for NYSE Euronext. ICE was thought to be looking to acquire the American exchange's derivatives business, Nasdaq its cash equities business. As of the time of the speculation, "NYSE Euronext’s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion." Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Merc (CME) to join in what would be probably be an $11–12 billion counterbid for NYSE. On April 1, ICE and Nasdaq made an $11.3 billion offer which was rejected April 10 by NYSE. Another week later, ICE and Nasdaq sweetened their offer, including a $.17 increase per share to $42.67 and a $350 million breakup fee if the deal were to encounter regulatory trouble. The two said the offer was a $2 billion (21%) premium over the Deutsche offer and that they had fully committed financing of $3.8 billion from lenders to finance the deal. The Justice Department, also in April, "initiated an antitrust review of the proposal, which would have brought nearly all U.S. stock listings under a merged Nasdaq-NYSE." In May, saying it "became clear that we would not be successful in securing regulatory approval," the Nasdaq and ICE withdrew their bid. The European Commission then blocked the Deutsche merger on 1 February 2012, citing the fact that the merged company would have a near monopoly.

In December 2012, ICE announced it would buy NYSE Euronext for $8 billion, pending regulatory approval. Jeffrey Sprecher will retain his position as Chairman and CEO. The boards of directors of both ICE and NYSE Euronext approved the acquisition.

Regulatory Agencies
ICE and its subsidiaries are regulated by a number of regulatory agencies.

In testimony before the Senate Committee on Commerce, Science, and Transportation on June 3, 2008, former director of the CFTC Division of Trading & Markets (responsible for enforcement) Michael Greenberger specifically named the Atlanta-based IntercontinentalExchange, founded by Goldman Sachs, Morgan Stanley and BP as playing a key role in speculative run-up of oil futures prices traded off the regulated futures exchanges in London and New York. However, the IntercontinentalExchange (ICE) had been regulated by both European and U.S. authorities since its purchase of the International Petroleum Exchange in 2001. However IntercontinentalExchange has been exempted by SECs in the United States and Canada for some regulatory purposes. Mr Greenberger submitted another report entitled "The Role of Derivatives in the Financial Crisis" as testimony before the Financial Crisis Inquiry Commission on June 30, 2010 in which argued that "OTC CDS market helped foment a mortgage crisis, then a credit crisis, and finally a ―once-in-a-century systemic financial crisis."

U.S. Commodity Futures Trading Commission (CFTC)
Mr. Sprecher serves on the U.S. Commodity Futures Trading Commission (CFTC) Global Market Advisory Committee and is a member of the Energy Security Leadership Council.

ICE Trust™ now ICE Clear Credit
ICE offers trade execution and processing for the credit derivatives markets through Creditex and clearing through ICE Trust™. ICE Trust "is overseen by the Federal Reserve Board and members may include banks or other institutions that fulfill the membership requirements, which include net worth of at least $5 billion as well as a credit rating of A or better."

ICE Clear Credit LLC

 * see main article ICE Clear Credit LLC
 * Clearing entity for credit default swaps (CDS)
 * Regulated by
 * CFTC - Derivatives Clearing Organization
 * SEC – Registered Securities Clearing Agency

ICE Futures Europe 2001
ICE Futures Europe® from its office in London, UK (previously known as International Petroleum Exchange® (IPE®) (1980-2001) prior to acquisition) (ICE "Crude Oil" page 1) offers futures and options contracts on benchmark Brent crude oil, West Texas Intermediate (WTI)crude oil and gasoil, emissions, U.K. natural gas, U.K power and coal. ICE Futures Europe® "trades half of the world’s crude and refined oil futures."

"Following its report earlier this month, November 2012, of a special meeting of the EU Environment Committee to discuss the EU Emissions Trading System, the Parliamentary Information Office, is pleased to report that an announcement yesterday established that the UK is leading the way in carbon auctioning."

By 2013 "Carbon traders [were] backing China to revive a global emissions market that lost 34 billion euros ($45 billion) [in 2012] as it shrank for the first time in history (Anderson and Narayanan Blooberg Jaunary 2013 ).""Developers "produced more than 1 billion more offsets than emitters will need before 2020, according to Sjardin, driving prices to record lows. Certified Emission Reductions, or CERs, in the UN’s CDM program, created by the 1997 Kyoto Protocol, have dropped 92 percent from a year ago, trading today at an all-time low of 31 euro cents on the ICE Futures Europe exchange in London (Anderson and Narayanan Blooberg January 2013 )."

ICE Clear Europe Limited 2009-
ICE Clear Europe is the "designated clearinghouse for ICE Futures Europe® (ICE "Crude Oil" 2009:1). *ICE Clear Europe Limited in London, UK trades in energy futures). ICE Clear Europe is the "financial counterparty to every futures contract traded on the exchange." ICE Clear Europe clearinghouse "matches long and short positions anonymously and guarantees financial performance (ICE "Crude Oil" page 8)."
 * As a clearing entity for credit default swaps (CDS) cleared more than $10 trillion in credit default swaps (CDS) (Terhune Bloomberg Business Week 2010-07-29).
 * CFTC - Derivatives Clearing Organization
 * Regulated by
 * SEC – Registered Securities Clearing Agency
 * U.K. Financial Services Authority (FSA) – Recognised Clearing House
 * U.K Financial Services Authority (FSA) – Settlement Finality Designation (SFD) under the Financial Markets and Insolvency Regulations 1999
 * Bank of England (U.K.s central bank) – regulated as an Inter-Bank Payment System (Banking Act 2009)

ICE Futures U.S., Inc.

 * Trades futures and options in three main areas
 * Agricultural – e.g. Sugar No. 11, Cotton No. 2
 * Currency – e.g. U.S. Dollar Index, more than 50 currency pairs
 * Equity index – e.g. Russell Indexes
 * Regulated by
 * CFTC - Exchange

ICE Clear U.S., Inc.

 * Clears products traded on ICE Futures U.S., Inc.
 * Regulated by
 * CFTC - Exchange

ICE Futures Canada®
ICE Futures Canada® list agricultural, currency and Russell Index markets.

IntercontinentalExchange® (NYSE: ICE) operates leading regulated exchanges, trading platforms and clearing houses serving the global markets for agricultural, credit, currency, emissions, energy and equity index markets. ICE Futures U.S.® and ICE Futures Canada® list agricultural, currency and Russell Index markets. ICE offers trade execution and processing for the credit derivatives markets through Creditex and clearing through ICE Trust™. A component of the Russell 1000® and S&P 500 indexes,

Board of Directors
Sir Bob spent much of his career at Shell International Petroleum Company Limited, and served as Chairman and Chief Executive of Shell U.K. Limited from 1985 to 1990. From 1997 to 2004 he was the Deputy Governor of the Halifax Bank of Scotland. He received his Knighthood in Queen Elizabeth's 1990 Birthday Honours.
 * Jeffrey C. Sprecher
 * Sir Robert "Bob" Reid, Director since June 2001. He is also Chairman of ICE Futures Europe and ICE Clear Europe, each a subsidiary of IntercontinentalExchange.

Commodities traded on the exchange

 * Coal
 * Crude and Refined products
 * Emissions
 * Natural Gas
 * Power
 * Cocoa
 * Coffee C
 * Cotton No. 2
 * FCOJ A
 * Orange juice concentrate
 * Sugar No. 11
 * Russell Indices
 * US Dollar Index
 * Iron Ore Swaps