GLOBAL 2/ – ICE to form a wholly-owned European clearing house
GLOBAL 2/ – ICE to form a wholly-owned European clearing house
ATLANTA – IntercontinentalExchange, the leading electronic energy marketplace
and soft commodity exchange, announced on Monday its plans to build on its
existing U.S. clearing operations with the formation of a wholly-owned European
clearing house. The clearing house will be based in London and is part of ICE’s
strategic plan to offer clearing services through wholly-owned clearing
businesses in the U.S. and the U.K. These clearing houses will complement ICE’s
diverse futures and OTC execution business while uniquely meeting the risk
management and regulatory requirements of a global marketplace.
The European
clearing house, to be known as ICE Clear Europesm, will partner with ICE’s U.S
clearing house to serve ICE’s global customer base across the commodities and
financial products marketplace, including futures and over-the-counter (OTC)
markets. ICE Clear Europe is preparing an application to the U.K.’s Financial
Services Authority (FSA) to become a Recognised Clearing House. The final
application is expected to be submitted by July 2007. Assuming that the
information provided is satisfactory and the timeline is met, regulatory
approval is anticipated in early 2008. In conjunction with its January 2007
acquisition of the New York Board of Trade (NYBOT), ICE acquired the New York
Clearing Corp. (NYCC). NYCC will be renamed “ICE Clear USsm” effective June 1,
2007 and will continue to operate as a registered Derivatives Clearing
Organization under the oversight of the U.S. Commodity Futures Trading
Commission (CFTC).
ICE expects to transition its energy futures and OTC
derivatives business to its own clearing operations at the end of the second
quarter of 2008, through the transfer of positions to ICE Clear Europe.
Currently, ICE’s energy futures and OTC derivatives businesses are cleared
through LCH.Clearnet Ltd.
The ICE Clear group will leverage a common
technology and development team from the outset. The Extensible Clearing System
(ECS), a highly flexible platform originally based on the OnExchange system,
will serve as the cornerstone of the expanded clearing technology platform. For
the benefit of European firms presently clearing ICE energy markets and to
minimize their technological and operational changes, ECS will be linked to the
Trade Registration System (TRS) for ICE Clear Europe. This is the posttrade
technology platform currently used for ICE’s cleared energy markets and is
provided by AEMS (Atos Euronext Market Solutions). In April, ICE announced an
investment in TRS technology capacity.
Beginning in January 2007, ICE and
NYBOT engineers began a second phase of development around all NYCC clearing
systems to significantly expand functionality, processing capacity and
electronic trading interfaces. Prior to NYBOT offering electronic trading in
early February, ICE and NYCC quickly and successfully integrated their
respective trading and clearing platforms, with the initial development efforts
resulting in a ten-fold expansion of clearing capacity. Currently, ICE’s
technology and clearing team is developing a new state-of-the-art clearing
platform employing new technologies such as Java J2EE, Oracle and IBM AIX.
Design and development on the enterprise solution is ongoing, with the next
phase of clearing enhancements supporting a new Post Trade Management System
(PTMS) slated for completion in June 2007.