On July 30, the IntercontinentalExchange (ICE) announced that, subject to approval from the Commodity Futures Trading Commission and the U.K. Financial Services Authority, all cleared over-the-counter (OTC) products listed on ICE’s OTC energy market will be transitioned to futures products in January 2013. After the transition, these products will be subject to regulation as futures and will not be subject to the swap regulatory regime created by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
ICE plans to transition all of its cleared U.S. natural gas, electric power, and natural gas liquids swaps and options, as well as its cleared U.S. emissions forwards and options, to futures and options on futures that will be listed for trading by ICE Futures U.S. Cleared crude and refined oil, freight, and iron ore swaps and options will be transitioned to futures and options on futures that will be traded on ICE Futures Europe. Both ICE Futures U.S. and ICE Futures Europe plan to allow market participants to execute trades using an electronic order book, block trades, exchanges of futures for related positions, and cross trades. Uncleared (bilateral) swaps will continue to be listed on ICE’s OTC platform, which will register as a swap execution facility.
ICE does not expect the transition to change its execution, clearing, minimum commission or view-only fees or, subject to regulatory approval, its margining methodology and rates.