In two releases issued this week, the Commodity Futures Trading Commission has provided notice of its intent to determine whether 24 contracts listed on the IntercontinentalExchange, Inc. (ICE) perform a “significant price discovery function.” All of the contracts to be reviewed by the CFTC are over-the-counter energy contracts, including 13 natural gas basis swap contracts and 11 electrical power swap contracts.

As an exempt commercial market (ECM) under CFTC rules, ICE and contracts traded on ICE generally are subject to minimal regulation by the CFTC. However, ECM-listed contracts that the CFTC determines perform a significant price discovery function (significant price discovery contracts, or SPDCs) subject the listing ECM to many of the obligations that apply to designated contract markets, such as large trader reporting, publication of daily trading information, and the establishment of position limits or position accountability levels for SPDCs.

The comment period with respect to the affected electrical power swap contracts closes on October 21; the comment period with respect to the affected natural gas basis swap contracts closes on October 26.

The CFTC press releases regarding these determinations, including full lists of the contracts affected, are available here and here.