IntercontinentalExchange

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IntercontinentalExchange (ICE)
Image:ICE logo.gif
Founded 2000
Headquarters Atlanta
Key People Jeffrey Sprecher, Chairman, Chief Executive Officer; Charles Vice, President, Chief Operating Officer; Scott Hill, Chief Financial Officer; David Goone, Senior Vice President and Chief Strategic Officer; Edwin Marcial, Chief Technology Officer; Johnathan Short, Senior Vice President, General Counsel and Corporate Secretary, Thomas W. Farley, President, Chief Operating Officer, ICE Futures US; David J. Peniket, President, Chief Operating Officer, ICE Futures Europe; Brad Vannon, President , Chief Operating Officer ICE Futures Canada; Thomas Hammond, President, Chief Operating Officer, ICE Clear US; Paul Swann, President, Chief Operating Officer, ICE Clear Europe
Products Futures and over-the-counter (OTC) markets for energy and agricultural commodities, in addition to foreign currency and equity index products; market data; and clearing services
Web site www.theice.com

Atlanta-based IntercontinentalExchange (NYSE: ICE) is a leading operator of global exchanges and over-the-counter markets, offering futures and OTC markets on a single electronic trading platform. Its markets include energy, agricultural commodities, foreign currency and equity index futures.

Jeff Sprecher acquired ICE's predecessor company, the Continental Power Exchange (CPEX) in 1997 and began developing the ICE platform with a small team of developers. Among the first exchanges to leverage the internet for a globally distributed, high speed, high capacity platform, ICE developed a leading edge technology infrastructure built on modern technology. Upon gaining support for a transparent and accessible energy market place, ICE was officially established in May 2000, with founding shareholders representing some of the world’s largest energy market participants. The company’s mission was to transform OTC trading by providing an open, around-the-clock electronic energy exchange. The exchange demonstrated leadership in offering the trading community better price transparency, more efficiency, greater liquidity and lower costs in both futures and OTC markets compared to manual trading activities.

ICE conducts its energy futures markets, including the leading oil benchmark contracts, through its London-based futures exchange, ICE Futures Europe. Its global agricultural commodity, foreign exchange and equity index futures markets are conducted through ICE Futures U.S. and ICE Futures Canada. Clearing services are also offered through ICE Clear U.S., ICE Clear Canada and ICE Clear Europe.

Featuring a state-of-the-art electronic trading platform that serves market participants in over 55 countries, and headquartered in Atlanta, ICE has offices in Calgary, Chicago, Houston, London, New York, Singapore and Winnipeg.

With over 15,200 unique contracts, ICE’s OTC markets offer swaps, spreads, basis, options and differentials on products.

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The ICE Trading Platform provides rapid trade execution and is one of the worlds most flexible, efficient and secure commodity trading systems. Participants access the platform via direct connections, telecom hubs, the INternet or through a number of front-end providers. ICE offers a 3-millisecond transaction time in its futures markets – the fastest in the industry – and its platform is scalable and flexible, allowing new products and functionalaties to be added without market disruption.

ICE’s three business lines – Futures, OTC and Market Data –support trading across the futures and OTC markets with a range of products. The exchange lists hundreds of physical and derivative products, including contracts based on crude oil and refined oil products such as heating oil and jet fuel, and other products like natural gas and electric power, as well as a suite of soft commodities contracts that include cocca, coffee, cotton, frozen concentrated orange juice and sugar.

ICE also offers a range of futures and options products based on the Russell Indexes and currency pairs and the benchmark US Dollar Index. In September 2008, ICE will become the exclusive trading venue for Russell index futures contracts, including the Russell 2000 and 1000 index futures and options on futures.

Other ICE services include: • ICE Data, which compiles and repackages trading data derived from trade activity into information products that are sold to a customer base extending beyond its main trading community

• ICE Clear, which provides risk management, capital efficiency and maximum financial safeguards to participants. A state-of-the-art clearing platform supports all aspects of trade registration and contract settlement, while guaranteeing traded contracts registered for clearing.

• ICE Risk, which provides a way to access real-time markets and trade execution, trade processing and risk management in one integrated application.

• ICE eConfirm, which provides a fast, accurate and legally binding alternative to manual, paper confirmations that confirms trades within seconds or minutes.

In an effort to provide accurate and factual information on the exchange, ICE has developed a website that offers detailed information on its regulated energy markets, as well as independent commentary on the role that fundamentals, such as the increasing imbalance between supply and demand growth, play in the global oil markets.

Link to the website at www.oilfuturesmarketfacts.com or you can access it from the ICE homepage. With the sustained rise in global crude oil prices, it is important to understand how the crude oil futures markets operate. As a global marketplace, it is our role to reflect the price signals received from a diverse range of market participants. While there is no easy solution to rising energy prices, we believe that open, transparent and regulated exchanges are vital for the transfer of risk. As such, consumers, investors, legislators and the media should have access to the facts about what is – and what is not – driving oil price rises. While it is tempting to blame the messenger, responsibility for such fundamental changes cannot lie with a single exchange, regulator or group of market participants.


Annual Volume and Financials For the first quarter of 2008, ICE reported record revenues and net income. Consolidated net income increased 66% to $92.3 million. Average daily volume exceeded 1 million contracts and average daily ocmmissions for the ICE’s global OTC segment rose 70% to a record $1,280,223. ICE reported record annual volume in all of its business segments in 2007, including record OTC commissions. ICE Futures Europe achieved record annual volume for the tenth consecutive year, with an increase of 49% in 2007 over annual volume in 2006. In 2007, volume at ICE Futures U.S. exceeded 2006 volume totals by 22%. Also for the year ended Dec. 31, 2007, average daily commissions in the OTC segment increased by 39% to $819,739, representing the fourth consecutive year of record commissions.[2]

For the year ended Dec. 31, 2007, ICE achieved record revenues for the fourth consecutive year, with an 83% rise in consolidated revenues to nearly $575 million compared with $314 million in the prior year. Consolidated net income increased 68% to a record $240+ million in 2007 from just over $143 million in 2006. The 2007 results include expenses related to ICE's proposed merger with the Chicago Board of Trade of $11.1 million, or $7.2 million after tax. Record consolidated cash flow from operations grew 91% to $287.8 million in 2007.

ICE's European and North American futures exchanges achieved record annual volume in 2007, with increases of 49% and 22%, respectively, totaling 192.0 million contracts combined. In 2007, average daily volume (ADV) for ICE Futures Europe(TM) was 539,044; ADV for ICE Futures U.S.(TM) and ICE Futures Canada(TM) was 232,566 contracts. Average daily commissions for ICE's OTC segment during 2007 increased to a record $845,572, a 44% increase over 2006.

Corporate Governance The following individuals are members of ICE's board of directors: Jeffrey C. Sprecher, Charles R. Crisp, Jean-Marc Forneri, Terrence F. Martell, Ph.D., Sir Robert Reid, Frederic V. Salerno, Richard L. Sandor, Ph.D.,Fred W, Schoenhut, Judith A. Sprieser, Vincent Tese and Fred W. Hatfield.


History In May 2000, IntercontinentalExchange was formed in 2000 by Chairman and Chief Executive Officer Jeffrey Sprecher, with the mission of transforming OTC trading by providing an open, accessible, multi-dealer, around-the-clock electronic energy exchange. In addition to Sprecher, ICE’s founding shareholders represented some of the world’s largest energy market participants. The exchange offered the trading community better price transparency, more efficiency, greater liquidity and lower costs through electronic trading than manual trading processes.ref>"ICE Futures U.S. Board Approves Transition to Fully Electronic Trading for Futures". Reuters.com. Retrieved on December 27, 2007.</ref>

In June 2001, ICE expanded its business into the regulated futures markets by acquiring the International Petroleum Exchange (IPE), now ICE Futures Europe, which is the leading energy futures exchange outside of the US.

Since 2003, ICE has partnered with the Chicago Climate Exchange (CCX) to host its electronic marketplace.

In April 2005, the entire ICE portfolio of energy futures became fully electronic with the closure of the IPE’s open outcry trading floor.

On November 16, 2005 ICE became a publicly traded company, listing on the NYSE.

In June 2006, ICE was added to the Russell 1000 Index.

In January 2007, ICE acquired the New York Board of Trade (NYBOT) now known as ICE Futures U.S. Today, ICE Futures U.S. electronic products trade on the ICE platform. The exchange’s options contracts continue to be traded on its traditional open outcry markets, as well as electronically.

On March 15, 2007, ICE launched a takeover bid of $191.49 a share, or $10.12 billion, for the Chicago Board of Trade (CBOT). The offer surprised executives at both the CBOT and Chicago Mercantile Exchange (CME), who had been working to close an $8 billion merger. An ICE and CBOT marriage would have eliminated antitrust concerns voiced by groups such as the Futures Industry Association (FIA). Such consumer groups noted that a CME/CBOT merger promised to concentrate about 85% of U.S. futures trading business at the Chicago exchanges, and the arrangement could raise the barriers to entry for new competitors. CME, however, raised its bid three times and closed on its acquisition of the CBOT on July 12, 2007.

In July 2007, ICE acquired and integrated ChemConnect's markets to its over the counter business. ChemConnect is the leading marketplace for natural gas liquids (NGL’s), propane and other chemicals markets.

On September 3, 2007, the New York board of Trade (NYBOT) was renamed ICE Futures U.S. ICE’s London-based futures exhange was renamed ICE Futures Europe.

On September 25, 2007, ICE was added to the S&P 500 Index.

Also in September 2007, ICE acquired the Winnipeg Commodity Exchange, now known as ICE Futures Canada, the leading agricultural futures exchange in Canada.

In October 2007, ICE acquired Chatham Energy, a leading OTC energy brokerage firm specializing in structuring and facilitating transactions in the energy options markets. The acquisition of Chatham supports ICE’s strategic plans to develop the electronic marketplace for OTC options.

January - 2008, ICE acquired YellowJacket. YellowJacket is a leading peer-to-peer trading tool for the OTC markets. http://www.yjenergy.com

In May 2008, ICE was granted approval to launch its wholly-owned, european-based clearing house, ICE Clear Europe. ICE Clear will provide secure and innovative clearing services for ICE’s futures and cleared over-the counter energy contracts enhanced risk management systems and technology enhancements. https://www.theice.com/clear_europe.jhtml

In June 2008 , ICE announced its acquisition of Creditex Group, Inc, a leader in the credit defaulf swaps processing arena. The transaction is expected to close in the third quarter of 2008. http://www.creditex.com


ICE subsidiary ICE Futures Europe has been regulated in London for decades and is now also supervised by regulators in Washington, D.C. ICE Futures Canada is overseen by regulators in Winnipeg, Manitoba. ICE Futures U.S., the subsidiary that was formerly called the New York Board of Trade has long been monitored by the Commodity Futures Trading Commission (CFTC).[1] On June 18, 2008, ICE announced that it had developed a Web site that offers detailed information on its regulated energy markets, as well as independent commentary on the role that fundamentals, such as the increasing imbalance between supply and demand growth, play in the global oil markets at www.oilfuturesmarketfacts.com.[1] Market participants can also link to the site from the ICE homepage at www.theice.com.[2]

Contents

ICE Stock Quote Information

ICE Stock Quote



  • On Dec. 11, ICE's Winnipeg Commodity Exchange (WCE) subsidiary successfully transitioned trading in all of its products to the ICE electronic platform as planned. On its first full day of trading on the ICE platform total volume was 16,742 contracts. Average daily volume for WCE futures was 13,427 contracts in November 2007. [2] The WCE had traded its canola, barley and feed wheat derivatives on the electronic platform owned by the Chicago Board of Trade since 2004. The switch involved a change in hours to 8 p.m. CST to 1:15 p.m. CST, without the early morning break seen in the allied Chicago Board of Trade soy complex.[3]
  • In late January of 2008, ICE's primary trade matching engine for all OTC and futures products migrated permanently from Atlanta to the company's Chicago data center location. The state-of-the-art hosting facility includes expanded co-location capabilities and provides the physical space, electric power, and bandwidth necessary to accommodate continued growth in ICE's messaging traffic, trading volume and customer base. The Atlanta-based data center will become the disaster recovery site for the ICE trade matching engine.[5]
  • On Jan. 31, 2008 ICE announced that it entered into an agreement to acquire financial technology firm YellowJacket Software, Inc, with the new business to be operated as a wholly owned subsidiary of ICE. ICE said it expected to complete its acquisition of YellowJacket in February of 2008. Terms of the transaction were not disclosed. ICE said the acquisition was not expected to be material to ICE's operating results during the first half of 2008.[6]
  • On Feb. 27, 2008 ICE and Natural Gas Exchange Inc. (NGX) energy exchange and clearinghouse said they would offer clearing and settlement services for physical OTC natural gas contracts beginning March 3, 2008. Physical clearing on select U.S. trading hubs would be available as part of a previously announced alliance between ICE and NGX.[8]
  • ICE and globalCOAL, the leading electronic marketplace for thermal coal on Apr. 2, 2008, announced a cooperation agreement to develop and launch two new coal futures contracts at ICE Futures Europe. The contracts consist of financially settled NEWC coal futures, to be launched mid-2008, and physically settled ARA coal futures, to be launched later in the year.[10]
  • On June 3, 2008, ICE announced it had entered into a definitive merger agreement to acquire Creditex Group Inc. (Creditex), a credit market innovator in the execution and processing of credit default swaps (CDS) with markets spanning the U.S., Europe and Asia. Creditex is a major player in the most liquid segments of the CDS market including CDS indexes, single-names and standardized tranches. The transaction consideration will total $625 million, comprising approximately $565 million in ICE common stock and $60 million in cash, as well as a working capital adjustment to be finalized at closing. Upon the closing of the transaction, expected during late third-quarter 2008, Creditex Group will be a wholly-owned subsidiary of ICE, operating under the Creditex name.[11]


Futures and Options Products

Agricultural

Agricultural contracts traded include ICE Western Barley, ICE Canola, ICE U.S. Coffee "C" Arabica, which is the world's largest coffee futures contract, ICE Cotton No. 2, ICE Cocoa, ICE Feed Wheat, ICE Frozen Concentrated Orange Juice, ICE Sugar No. 11, and ICE Sugar No. 14.

On Dec. 13, 2007, the exchange announced the temporary delisting of the July 2009 expiry and all subsequent months and instituted a temporary moratorium on listing new contract months while changes to the futures contract terms were being considered.

On Dec. 18, 2007, ICE Futures U.S. announced that effective with the start of trading on Wednesday, Dec. 19, the exchange would delist all contract months for its NFC Orange Juice and Ethanol futures and options contracts and for the ICE Mini Coffee “C” futures contract. The contracts had no outstanding open interest.

On March 14, 2008, ICE Futures U.S. said that it would implement changes in the OJ contract and would resume trading of the months that were temporarily delisted, in addition to resuming the regular listing of additional contract months.[12]


Fossil Fuels and Power

Nearly half of the world's global crude futures by volume of commodity traded is transacted on the ICE exchange.

In addition to ICE Brent Crude Oil futures and options, ICE energy contracts include ICE Rotterdam & Richards Bay Coal, ICE Emmissions, ICE Gas Oil, ICE Heating Oil Futures, ICE Middle East Sour Crude Oil, ICE Unleaded Gasoline, ICE UK Electricity Futures, ICE UK Natural Gas, and ICE West Texas Intermediate Light Sweet Crude Oil.

The ICE-ECX CFI futures contract is the result of a cooperative relationship between ICE Futures Europe and the Chicago Climate Exchange, Inc. and its subsidiary, the European Climate Exchange. ICE Futures Europe shares in the revenue derived from the ECX CFI Futures contract.

Financial

Financial contracts traded include the ICE Reuters Jefferies CRB Index (to begin Feb. 1, 2008)[13] ICE Russell 2000 Futures and the ICE U.S. Dollar Index Futures.

In October of 2007 ICE Futures U.S. announced that it would begin offering 11 electronically traded foreign exchange ICE Currency Pairs 22 hours per day, beginning on Nov. 9, 2007. Listing of the foreign exchange futures contracts will occur in phases.

OTC Markets

The ICE OTC markets include Financial Gas, Financial Power, Olefins and Aromatics, Oil and Refined Products, Natural Gas Liquids, Physical Gas and Physical Power.

Clearing Services

Clearing for ICE trades is handled by ICE Clear U.S. and ICE Clear Europe.

Annual Reports

News

  • ICE said that on Jan. 8, 2008 its ICE Futures subsidiary posted a new high in exchange-wide electronic trading volume for a single day. The exchange reported record electronic volume of 234,120 contracts on Tuesday. The new record surpassed the previous electronic volume record set on June 13, 2007.[14]
  • On Jan. 10, 2008 ICE Futures U.S. set a new daily electronic trading volume record. Electronic futures volume on Jan. 10, 2008 totaled 247,040 contracts. ICE Sugar No. 11 futures also reached a new daily electronic volume record of 177,271 contracts. Electronic trading at ICE Futures U.S. represented 89 percent of total futures volume. Also on Jan. 10, open interest in the Sugar No. 11 futures contract surpassed the one-million contract mark for the first time, with 1.021 million open contracts. Open interest in ICE Cotton futures also set a new all-time high at 261,151 contracts.[15]
  • On Jan. 17, 2008 ICE set new daily electronic and exchange-wide trading volume records. Electronic futures volume on Jan. 17 totaled 363,441 contracts, surpassing by 33 percent the previous record of 273,670 contracts set on Jan. 16, 2008.[16]ICE Sugar No. 11 futures established a new daily electronic volume record of 306,728 contracts.[17]
  • On Jan. 18, 2008 ICE said that due to market conditions impacting the price of ICE's common stock, Chairman and Chief Executive Officer Jeffrey Sprecher would cancel a previously announced, pre-arranged stock trading plan established in November 2007 and scheduled to commence in January 2008. The plan was adopted pursuant to guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and disclosed by ICE in a press release dated Dec. 24, 2007.[18]The exchange said Sprecher did not make any trades under the plan, which would have accounted for approximately 10 percent of his combined holdings of stock, restricted stock and stock options and was intended to diversify his personal investment portfolio, implement certain tax planning measures, and pay income taxes incurred in connection with the awards.[19]
  • On Jan. 21, 2007, ICE announced that it had been named the 2007 Derivatives Exchange of the Year by Risk Magazine.[20]Among the factors considered by the magazine were strengths in innovation, infrastructure, systems and organization, client service and risk management.
  • On Feb. 13, 2008 ICE set a new daily volume record in its ICE Gas Oil futures contract. Gas Oil futures volume reached 200,908, surpassing by 8 percent the previous record of 186,124 contracts established on Nov. 6, 2007.[21]
  • On March 24, 2008, ICE and Natural Gas Exchange Inc. (NGX), an energy exchange and clearinghouse, said they would offer clearing and settlement services for physical OTC natural gas contracts at the Henry Hub delivery point beginning Monday, Apr. 7, 2008, pursuant to a previously announced alliance. As with physical clearing services successfully introduced on March 3 at PG&E Citygate and GTN Malin, NGX's clearing organization would serve as the central counterparty for the physical delivery and financial performance.[23]
  • On Apr. 2, 2008, ICE reported announced that March average daily volume(ADV) in futures exceeded one million contracts for the first time in exchange history, and OTC commissions more than doubled. In the first quarter of 2008, ICE achieved record ADV and record average daily commissions.[24]
  • On May 29, 2008, ICE announced that in cooperation with the U.S. Commodity Futures Trading Commission (CFTC) and the U.K. Financial Services Authority (FSA), it has facilitated the development of a cross-border program to provide enhancements to its energy market data reporting, including the large trader reports already in place on its West Texas Intermediate (WTI) crude oil futures contract. The expanded information sharing agreement, initiated by ICE and detailed below, will be subject to the existing memorandum of understanding (MOU) between the FSA and the CFTC. As a result of these proactive enhancements, ICE Futures Europe hopes to provide greater transparency in its markets.[25]
  • On June 3, ICE reported that average daily volume for all ICE Futures contracts reached 872,555 in May 2008 compared to 724,991 in May 2007. In May 2008, ICE's average daily commissions were $1,193,325, an increase of 68 percent compared to $711,074 in May 2007. Average daily commissions reflect daily trading activity in ICE's global OTC energy markets.[26]
  • On June 17, 2008 and May 29, 2008, the CFTC announced further enhancements to the level of information that ICE has supplied since 2006 on its West Texas Intermediate (WTI) Crude Oil contract. The initiatives placed ICE Futures Europe under the same regulations as those applicable to U.S.-based exchanges.[27]

References

  1. ↑ ICE, A Much-Maligned Commodities Trader, Learns To Live With Regulation. International Herald Tribune. Retrieved on July 24, 2008.
  2. ↑ "IntercontinentalExchange Announces Successful Transition of WCE Products to ICE Trading Platform". CNNMoney.com. Retrieved on December 11, 2007.
  3. ↑ "Winnipeg exchange says switch to ICE goes smoothly". Reuters.com. Retrieved on December 11, 2007.
  4. ↑ Press Release. WCE. Retrieved on December 31, 2007.
  5. ↑ "ICE makes some moves to Chicago”. charlotte.bizjournals.com/. Retrieved on November 27, 2007.
  6. ↑ Press Release. ICE. Retrieved on January 31, 2007.
  7. ↑ Press Release. ICE. Retrieved on February 27, 2008.
  8. ↑ Press Release. ICE. Retrieved on February 27, 2008.
  9. ↑ Press Release. ICE. Retrieved on March 5, 2008.
  10. ↑ Press Release. IntercontinentalExchange. Retrieved on April 3, 2008.
  11. ↑ Press Release. ICE. Retrieved on June 3, 2008.
  12. ↑ Press Release. IntercontinentalExchange. Retrieved on March 14, 2008.
  13. ↑ "ICE Futures U.S. to List CRB Index on the Screen”. Reuters. Retrieved on January 28, 2008.
  14. ↑ Press Release. IntercontinentalExchange. Retrieved on January 9, 2008.
  15. ↑ Press Release. IntercontinentalExchange. Retrieved on January 11, 2008.
  16. ↑ Press Release. IntercontinentalExchange. Retrieved on January 18, 2008.
  17. ↑ Press Release. IntercontinentalExchange. Retrieved on January 18, 2008.
  18. ↑ Press Release. IntercontinentalExchange. Retrieved on January 18, 2008.
  19. ↑ Press Release. IntercontinentalExchange. Retrieved on January 18, 2008.
  20. ↑ Press Release. ICE. Retrieved on January 25, 2008.
  21. ↑ Press Release. IntercontinentalExchange. Retrieved on February 14, 2008.
  22. ↑ Press Release. IntercontinentalExchange. Retrieved on February 25, 2008.
  23. ↑ Press Release. IntercontinentalExchange. Retrieved on March 24, 2008.
  24. ↑ Press Release. ICE. Retrieved on April 3, 2008.
  25. ↑ Press Release. ICE. Retrieved on June 3, 2008.
  26. ↑ Press Release. ICE. Retrieved on June 3, 2008.
  27. ↑ 2nd UPDATE:CFTC:Seeks ICE Europe WTI Front Mo Contract Limits. Dow Jones Newswires and Morningstar. Retrieved on June 19, 2008.

Resources

ICE Web site: [3]

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